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Understanding Merchant Trade & High Sea Sales
Merchant trade and high sea sales are two distinct trade practices commonly used in international commerce. Here are some insights on the differences between them:
Definition:
High Sea Sales: High sea sales involve the sale of goods by the original importer to a third party while the goods are still in transit, either on the high seas or after dispatch from the port of loading but before arrival at the port of discharge.
Merchant Trade: Merchant trade, on the other hand, refers to the buying and selling of goods across international borders, often without the goods entering the domestic tariff area of the importing country.
Nature of Transaction:
High Sea Sales: In high sea sales, the original importer sells the goods to another buyer while the goods are in transit. The sale occurs before the goods are officially imported into the destination country.
Merchant Trade: Merchant trade involves the buying and selling of goods, commodities or products, typically without the goods entering the domestic tariff area of the importing country. It can include various types of trade transactions, such as direct exports and imports, triangular trade, and more.
Timing and Location:
High Sea Sales: High sea sales take place while the goods are in transit, often on the high seas or shortly after departure from the port of loading.
Merchant Trade: Merchant trade transactions can occur at any stage of the supply chain, including before, during, or after transportation. The location of the transaction may vary depending on the specific terms of the trade agreement.
Import Requirement:
High Sea Sales: High sea sales transactions typically involve an ultimate importation of the goods into the destination country by the final buyer.
Merchant Trade: Merchant trade transactions may or may not involve the importation of goods into the destination country’s domestic tariff area. Goods acquired in merchant trade transactions may be resold to buyers in other countries without entering the importing country’s domestic market.
Conclusion
In summary, while both high sea sales and merchant trade involve international trade transactions, they differ in terms of timing, nature, and import requirements. High sea sales involve the sale of goods while they are in transit, with an ultimate importation into the destination country. Merchant trade, on the other hand, encompasses a broader range of trading activities and does not necessarily require the goods to enter the importing country’s domestic tariff area.