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3 terms in international logistics that every exporting or importing business must know

May 15, 2024

Recently, our team had a webinar with BIFA (British International Freight Association) as a memeber of the association, about some important concepts in international trade. This is why today we want to delve deeper into the subject. 

Rules of Origin, Proof of Origin, and Diagonal Cumulation of Origin in Trade (DCT) – 3 terms in international logistics that every exporting or importing business must know. Let's break down these concepts to understand their importance.

 

Rules of Origin:

These are the criteria that decide if a product qualifies for special treatment under trade agreements. They look at things like where the product was made and how much of it comes from participating countries.

 

Proof of Origin:

To get benefits like lower tariffs, exporters must prove where their products come from. This usually means showing certificates or other documents confirming the product's origin.

 

Diagonal Cumulation:

This idea lets products from one country be treated as if they come from another country in the same trade deal. For example, if Country A has a deal with Country B and Country B has a similar deal with Country C, products from Country C can benefit from the deal between A and B. Diagonal cumulation fosters regional integration, stimulates trade flows, and enhances the competitiveness of participating countries in global markets.

 

Understanding the rules of origin and diagonal cumulation is key to success in global trade. But it can also be tricky, especially for smaller businesses that might struggle with paperwork and compliance. Our advice is to follow these rules and take advantage of diagonal cumulation because companies from import and export industries can access new opportunities and grow in the international market.

 

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