Foreign trade glossary in plain words

This glossary explains the foreign trade terms used in our guides and on the site in plain words: product codes, delivery terms, duties, trade remedies, documents and the figures in trade reports. Each entry is one to three sentences, with a link to the guide that explains the topic in more detail.

Terms are listed in alphabetical order. Where two terms are often confused, such as partner country and country of origin, both have their own entry.

A–B

Agent

A company or person that finds customers for you in a market and earns a commission, but does not buy the goods. The contract is between you and the customer. See How to find a distributor abroad.

Anti-dumping duty

An extra import duty on goods from a particular country or producer that are sold for export below their normal price at home and harm local producers. It comes on top of the usual duty and can make a market unprofitable. See How to check import duties and trade restrictions.

Bill of lading

The document a carrier issues for goods sent by sea. It confirms that the goods were received for shipment and is needed to collect them at the destination. See Where to get foreign trade data for a country.

C

CIF (Cost, Insurance and Freight)

A delivery term under which the seller's price includes the goods, sea freight and insurance to the buyer's port. The risk passes to the buyer already in the port of loading. Most countries also value imports for duty on this basis. See How to calculate a competitive export price.

Conformity certificate and declaration of conformity

Two documents that confirm a product meets the technical rules of a market, for example the EAEU technical regulations. A certificate is issued by an accredited certification body after testing; a declaration is drawn up by the applicant itself and then entered in the unified register. The applicant must be registered in the union: the manufacturer, its authorised representative or the importer. Which document you need depends on the product. See How to enter the EAEU market.

Consignment

Goods sent together under one set of transport and customs documents. In shipment data a consignment with several different products is usually counted once for each product, so the number of shipments is higher than the number of trucks or containers. See How to read foreign trade figures.

Countervailing duty

An extra import duty on goods whose production or export was subsidised by the exporting country's government. It is one of the trade remedies. See How to check import duties and trade restrictions.

Country of origin

The country where the goods were made or substantially processed. It decides which duty rate and which restrictions apply, and it can differ from the country of the seller. See How to read foreign trade figures.

Customs value

The value on which import duty is calculated. In most countries it includes freight and insurance to the border (the CIF basis); the United States uses a value without international freight and insurance. See How to check import duties and trade restrictions.

D–E

Distributor

A company that buys your goods on its own account and resells them in its market, usually with stock, sales staff and service. Unlike an agent, it owns the goods and carries the risk of selling them. See How to find a distributor abroad.

Due diligence

The checks you make on a company before a deal: that it exists, is not on sanctions lists, really trades the product and has matching bank details. See How to check a foreign company before a deal.

Duty (import duty)

A tax charged when goods are imported. It is usually a percentage of the customs value, but it can also be a fixed amount per kilogram, litre or piece. See How to check import duties and trade restrictions.

EAC mark

The mark on products that have passed conformity assessment under the technical regulations of the Eurasian Economic Union. Products covered by these regulations must carry it before they are sold in the union. See How to enter the EAEU market.

EAEU (Eurasian Economic Union)

An economic union of Russia, Kazakhstan, Belarus, Armenia and Kyrgyzstan that is also a customs union, with one customs tariff and common technical rules. Goods move between member countries without customs control. See How to enter the EAEU market.

Exporter

A company that sends goods out of its country in its own name and sells them to a foreign buyer. In another country's import data, the same company appears as the foreign supplier. See How to find and check a foreign supplier.

F

FOB (Free on Board)

A delivery term under which the seller delivers the goods on board the ship in the port of loading. From there the buyer pays the freight and insurance and carries the risk. See How to calculate a competitive export price.

Free trade agreement

An agreement under which countries cut or remove duties on each other's goods. The lower rate applies only to goods that meet the agreement's rules of origin. See How to check import duties and trade restrictions.

Freight forwarder

A company that organises the transport of your goods: books the carrier, arranges documents and often insurance and customs formalities. It can also give you a freight rate for a price calculation. See How to calculate a competitive export price.

H–I

HHI (Herfindahl–Hirschman Index)

A measure of how concentrated a market is: the sum of the squared market shares of all companies. It runs from close to 0 (many small players) to 10,000 (one company holds the whole market). See How to read foreign trade figures.

HS code

The product code of the Harmonized System, the international classification of goods used in foreign trade. Its first 6 digits mean the same in almost every country. See How to find the HS code for a product.

Importer

A company that brings goods into its country in its own name and is responsible for them at customs. It may use the goods itself, sell them on or work for another owner. See How to find buyers abroad for your product.

Import VAT

Value added tax charged on imported goods at the border, usually on the customs value plus the duty. Businesses can often reclaim it later, but it ties up money until then. See How to check import duties and trade restrictions.

Incoterms

Standard delivery terms published by the International Chamber of Commerce, such as FOB or CIF. Each term says where the seller hands over the goods, who pays for which part of the transport and when the risk passes to the buyer. See How to calculate a competitive export price.

L–M

Letter of credit

A payment method in which the buyer's bank guarantees to pay the seller once the seller presents the agreed shipping documents. It protects both sides in a first deal. See How to check a foreign company before a deal.

MFN rate

The "most favoured nation" duty rate: the standard rate a WTO member applies to imports from other members, unless a trade agreement gives a lower one. See How to check import duties and trade restrictions.

Mirror data

Figures on a country's trade taken from its partners' reports: what other countries say they exported to it. They are used when a country publishes little, but they never match its own figures exactly. See Where to get foreign trade data for a country.

N–P

National code

The full product code of a particular country: the 6 international HS digits plus national digits, 8 to 12 in total. Duties and rules are set for national codes. See How to find the HS code for a product.

Net and gross weight

Net weight is the weight of the goods without packaging; gross weight includes packaging. Prices per kilogram in trade reports are calculated on net weight. See How to read foreign trade figures.

Partner country

In Orion Markets reports, the country where the company on the other side of the trade is registered. For imports, it is the seller's country, which is not always where the goods were made. See How to read foreign trade figures.

Preferential rate

A lower duty rate for goods from certain countries, under a free trade agreement or a preference scheme for developing countries. To get it, you usually need proof of origin. See How to check import duties and trade restrictions.

R–S

Re-export

Goods imported into a country and then sent on to another country without real processing. Re-exports inflate a country's imports without being its own consumption. See How to read foreign trade figures.

Rules of origin

Rules that decide in which country goods count as made, for example after enough processing there. They decide whether a product qualifies for a preferential rate. See How to check import duties and trade restrictions.

Safeguard measure

A temporary extra duty or quota on imports of a product from all countries when a sudden rise in imports harms local producers. It is one of the trade remedies. See How to check import duties and trade restrictions.

Sanctions screening

Checking a company, its owners and directors, its bank and the goods against sanctions lists such as those of the US, the EU, the UK and the UN. A possible match is a reason to check by hand, not a verdict. See How to check a foreign company before a deal.

Seasonality

Regular rises and falls in imports in the same months every year, caused by harvests, weather, holidays or the construction season. It is seen only over several full years. See How to see the seasonality of imports.

Shipment

In foreign trade data, one product crossing the border in one consignment. Reports add shipments up into totals: number of shipments, value, weight and shares. See How to read foreign trade figures.

T

Tariff-rate quota

A set quantity of a product that can be imported at a lower duty; imports above it pay the full rate. Quotas are often used for farm products. See How to check import duties and trade restrictions.

Trade remedy

A general name for anti-dumping duties, countervailing duties and safeguard measures: extra protection a country gives its producers against particular imports. See How to check import duties and trade restrictions.

Trading hub

A country through which large volumes of goods made elsewhere are traded or transshipped, such as Singapore, Hong Kong, the UAE or Panama. A large share of a hub in trade data usually tells you about routes, not about production. See How to read foreign trade figures.

To see these terms on real figures, open a free sample report in Ready-made research or build your own in Analyze markets by product.