Editing Border trade

{{Short description|Purchasing goods across country's borders}}
{{More citations needed|date=December 2009}}
[[File:Gaz bar maine.jpg|300px|thumbnail|A [[gas station]] in [[Estcourt Station, Maine|Estcourt Station]], [[Maine]], caters to border shoppers from across the [[Canada–United States border|border]] with [[Canada]], where gasoline is significantly more expensive.]]
'''Border trade''', in general, refers to the flow of goods and services across the border between different jurisdictions. In this sense, border trade is a part of the normal trade that flows through the ordinary export/import legal and logistical frameworks of nations and smaller jurisdictions. However border trade specifically refers to the ''increase'' in trade in areas where crossing borders is relatively easy and where products are significantly less expensive on one side of the border than the other{{snd}} often because of significant variations in taxation levels on goods. Common items involved in border trade include [[alcohol (drug)|alcohol]], [[tobacco]], [[medication]], [[recreational drug]]s, [[automobile]]s, automotive fuel, groceries, furniture and clothing.

As well as border trade across land or sea borders, air travel with a [[low-cost carrier]] can be worthwhile for an international trip for the same purpose, although baggage restrictions can limit the effective savings to those for small high-value goods.

Where border trade is done for [[Tax avoidance and tax evasion|tax evasion]], it forms part of the [[underground economy]] of both jurisdictions.

==By region==

===Europe===
Typical examples of this are the borders between [[Ukraine]] and [[Russia]], between [[Norway]] and [[Denmark]]/[[Sweden]]/[[Finland]]/[[Russia]]/[[Estonia]] and between [[Denmark]] and [[Germany]]//[[Switzerland]]. For instance, the excise tax on alcohol is lower in Estonia than in Finland and much lower than in Sweden, thus it is common to buy large volumes of alcohol when returning from Estonia: there are shops in Tallinn harbour that cater specifically to tourists.<ref>{{cite news|url=http://news.err.ee/v/economy/0759bc45-5728-41c2-9f0a-b229a4724b2a|title=Third of Estonia's Alcohol Sales Attributed to Finnish Tourists|date= 22 April 2014}}</ref> In Finland, the best-selling [[Alko]] shop in proportion to local population is on the border to Norway, since even if the alcohol tax is high in Finland, it is lower than the one in Norway (and was lowered in order to decrease border trade with Estonia).

Border trading exists between [[Lithuania]] and [[Poland]], as buying food is cheaper in Poland than in Lithuania.

Border trading exists between [[Northern Ireland]] and the [[Republic of Ireland]]; during the [[2008 financial crisis]], when the [[Euro]] rose against the [[British pound]], so many from the Republic visited [[Newry]]—with lines of traffic four miles long—that the phenomenon became known as the "Newry effect". One in four households in the Republic in counties as far as [[County Galway|Galway]], four hours away from the border, shopped for groceries in Northern Ireland.<ref name="quinn20081218">{{cite news | url=https://www.nytimes.com/2008/12/18/world/europe/18ireland.html | title=A Northern Ireland Town Is a Shoppers' Paradise | work=The New York Times | date=2008-12-18 | access-date=5 May 2015 | author=Quinn, Eamon | pages=A14}}</ref> Petrol is cheaper in the Republic, and groceries, furniture and clothing are cheaper in Northern Ireland.

Between the [[United Kingdom]] and [[France]]/[[Belgium]], the [[booze cruise]] is a trip made specifically, or at least largely, to purchase cheaper alcohol and tobacco, and also goods offering different rates of VAT: [[laundry detergent]], perhaps surprisingly, is a common purchase. Similarly, there is an important number of French purchasers buying tobacco and alcohol in Spanish border towns such as [[Le Perthus]]. In [[Spain]], these products are a third cheaper than in France. During summer, around 70,000 visitors cross the Spanish border daily to buy such products, occasioning severe traffic jams. Nearby [[Andorra]], with a low VAT (4%), is also extremely popular with French customers residing in the area.<ref>{{Cite web|url=https://www.theguardian.com/money/2015/jul/02/cross-border-buying-shopping-bargains-globalisation|title=Shop frontiers: the rise of cross-border buying around the world|work=The Guardian|date=2 July 2015}}</ref>

There is a significant amount of border trade in [[marijuana]] between the [[Netherlands]], [[Drug policy of the Netherlands|where cannabis is essentially legal]], and surrounding countries such as [[Belgium]], [[Germany]], and [[France]].<ref>{{cite news | url=https://www.forbes.com/sites/ceciliarodriguez/2013/09/24/weed-ghettos-for-tourists-anger-netherlands-neighbors/ | title=Marijuana For Tourists, Discord for the Netherlands | work=Forbes | date=2013-09-13 | access-date=28 December 2015 | author=Rodriguez, Cecilia}}</ref>

A more legal example of the Netherlands is the [[Limburg (Netherlands)|Limburg]] province, where citizens occasionally take trips to Germany and Belgium to buy commodities like: medicinal products, handcrafted furniture, fresh produce, alcoholic beverages or home appliances for lower prices due to the VAT. This is very easy as there are no border controls due to the [[Schengen Agreement]]. It is fully legal to buy products for their own need over the border in the EU, if [[European Union value added tax|VAT]] is paid when purchasing, except from some low-VAT areas.

Residents of Switzerland and Liechtenstein who are non-EU residents can purchase many items in nearby Germany from anything from two to seven times the price they would pay for the same products in their own countries. Austria is also somewhat cheaper than Switzerland. Residents of Switzerland usually qualify for a tax refund on purchases made in all of the surrounding [[EU]] countries making cross border shopping even more attractive, particularly in Germany where there is no minimum-purchase requirement for claiming the tax back.<ref>{{cite web |url=https://www.nzz.ch/wirtschaft/einkaufstourismus-ist-im-schweizer-detailhandel-eine-feste-groesse-ld.1345912 |url-status=dead |archive-url=https://web.archive.org/web/20180109200742/https://www.nzz.ch/wirtschaft/einkaufstourismus-ist-im-schweizer-detailhandel-eine-feste-groesse-ld.1345912 |archive-date=2018-01-09 |title=Einkaufstourismus ist im Schweizer Detailhandel eine feste Grösse {{!}} NZZ}}</ref><ref>{{cite web |url=https://www.nzz.ch/schweiz/einkaufstourismus-ld.1382332 |url-status=dead |archive-url=https://web.archive.org/web/20180502212242/https://www.nzz.ch/schweiz/einkaufstourismus-ld.1382332 |archive-date=2018-05-02 |title=Thurgau macht Druck gegen den Einkaufstourismus {{!}} NZZ}}</ref><ref>{{cite web |url=https://www.nzz.ch/schweiz/keine-mauer-wider-den-einkaufstourismus-ld.1317360 |url-status=dead |archive-url=https://web.archive.org/web/20170920065132/https://www.nzz.ch/schweiz/keine-mauer-wider-den-einkaufstourismus-ld.1317360 |archive-date=2017-09-20 |title=Keine Mauer wider den Einkaufstourismus {{!}} NZZ}}</ref><ref>{{Cite web|url=https://www.foodaktuell.ch/einkaufstourismus-keine-entwarnung/|title = Einkaufstourismus: Keine Entwarnung|date = 22 January 2018}}</ref><ref>{{Cite web|url=https://www.swissinfo.ch/ger/wirtschaft/grenzgemeinden-erhoehen-druck_aerger-mit-einkaufstouristen--ein-politischer-dauerbrenner/43732754|title = Ärger mit Einkaufstouristen: Ein politischer Dauerbrenner| date=6 December 2017 }}</ref><ref>{{Cite web|url=https://www.tagblatt.ch/ostschweiz/einkaufstourismus-einkaeufe-im-netz-und-ennet-der-grenze-setzen-ostschweizer-gewerbe-weiter-zu-ld.1011904|title = EINKAUFSTOURISMUS: Einkäufe im Netz und ennet der Grenze setzen Ostschweizer Gewerbe weiter zu| date=23 November 2017 }}</ref><ref>{{Cite web|url=https://www.unisg.ch/de#!/lightbox/https://www.unisg.ch/de/wissen/newsroom/aktuell/rssnews/forschung-lehre/2017/studie-einkaufstourismus-06dezember2017|title = HSG Startseite &#124; Universität St.Gallen}}</ref>

===North America===
Cross-border shopping between three countries in [[Canada]], [[Mexico]], and the [[United States]] has been robust. The [[North American Free Trade Agreement]] (NAFTA) has reduced barriers and tariffs, facilitating cross-border trade. Each day 2008, $2 billion of cross-border trade was conducted between Canada and the United States alone.<ref>{{cite web |url=http://www.cbsa-asfc.gc.ca/media/release-communique/2008/2008-07-02-eng.html |title=New Cross-Border Cooperation Will Strengthen Cargo Security |access-date=2010-03-12 |url-status=dead |archive-url=https://web.archive.org/web/20100317141123/http://www.cbsa-asfc.gc.ca/media/release-communique/2008/2008-07-02-eng.html |archive-date=2010-03-17 }}</ref><ref>{{Cite web |title=XPO Launches Significant Expansion of Cross-Border Mexico LTL Service |url=https://finance.yahoo.com/news/xpo-launches-significant-expansion-cross-100000915.html}}</ref> Consumers take part in cross-border trading to broaden their product selection, gain access to a larger market place, or take advantage of currency volatility. Online commerce has taken on a more prominent role in recent years and gives consumers a convenient platform for cross-border shopping. However, additional border costs such as [[duties]], [[brokerage]] and shipping are not always disclosed up front or even known to the retailer, leading to a situation where the final cost of an item can greatly exceed expectations. Dedicated cross-border shopping solutions such as Canada Post's Borderfree program existed to mitigate these problems with varied success.<ref>Canada Post sold "Borderfree" in 2012: https://www.borndigital.com/2012/03/02/canada-post-sells-off-cross-border-e-commerce-platform-borderfree-2012-03-02</ref> In the end, caution is necessary to determine the final cost of goods before purchase.

The [[consumer import of prescription drugs]] from Canada and Mexico into the United States can provide a large cost savings for the patient, and is sometimes even facilitated by insurance companies, and the quality of medicine in Canada is comparable to that in the United States

During the [[COVID-19 pandemic]] that began in 2020, the US–Canada and US–Mexico borders were closed to non-essential traffic, leaving merchants who normally catered to cross-border shoppers stranded with no access to their customers. Exclaves such as [[Point Roberts, Washington]], were particularly hard hit.<ref name=MexicoClosure/><ref>{{Cite web|url=https://www.king5.com/video/travel/point-roberts-fire-chief-warns-of-humanitarian-crisis-amid-border-closure/281-b85f62a8-a731-4e77-b554-a00e57531786|title = Point Roberts' fire chief warns of 'humanitarian crisis' amid border closure|date = 22 June 2021}}</ref><ref>{{cite web |url=https://www.opb.org/article/2021/06/23/food-crisis-feared-on-peninsula-isolated-by-border-as-only-grocery-teeters-on-closure/ |url-status=dead |archive-url=https://web.archive.org/web/20210624020849/https://www.opb.org/article/2021/06/23/food-crisis-feared-on-peninsula-isolated-by-border-as-only-grocery-teeters-on-closure/ |archive-date=2021-06-24 |title=Food crisis feared on Washington peninsula isolated by border as only grocery teeters on closure - OPB}}</ref> Specific business categories, such as parcel shops, tourism, fuel and dairy incurred severe losses in many border communities;<ref>{{Cite web|url=https://www.wwnytv.com/2020/03/18/what-border-closure-means-ogdensburg-business/|title = What border closure means for Ogdensburg business| date=19 March 2020 }}</ref><ref>{{cite web| url = https://www.cbc.ca/news/canada/ottawa/u-s-post-office-canada-mail-pandemic-1.5920502| title = You've got mail, overflowing U.S. post office near Canadian border tells Ontario customers |work= CBC News}}</ref> both US–Canada and US–Mexico trade incurred multi-billion dollar impacts.<ref name=MexicoClosure>{{cite web| url = https://mexiconewsdaily.com/news/border-closure-has-caused-big-losses-on-one-side/| title = US border closure has caused big losses on one side, gains on the other| date = 13 July 2021}}</ref>

====Between U.S. states and across city and county boundaries within states====
Although not crossing a national boundary, residents of one state may often travel across a state line in order to shop for a variety of goods. In some cases, a larger city or metro area in one state may draw a population in from another state or people may travel outside of city limits to surrounding areas with lower taxes. In other cases, residents may cross boundaries to take advantage of more friendly legislation regarding restricted products, such as alcohol, tobacco, fireworks, firearms, gambling, etc. For example, a New York City resident may engage in [[illicit cigarette trade]] by purchasing products in a nearby state with lower taxes and re-selling them illegally in New York. Furthermore, states which have legalized recreational marijuana may experience a high-amount of out-of-state customers.

=== South America ===
Historically, trade between the [[Colombia–Venezuela border|Colombian-Venezuelan border]] consisted primarily of Colombian residents traveling to Venezuelan border towns to purchase fuel derived from [[History of the Venezuelan oil industry|Venezuelan oil]] and other items that were cheaper to obtain there. However, due to the [[crisis in Venezuela]] that began in 2013 and worsened in 2017, thousands of Venezuelan residents began to travel to Colombian border towns to mostly purchase basic [[necessity good]]s.<ref>{{cite news|access-date=25 April 2023|date=10 July 2016|periodical=[[BBC News Mundo]]|title=Miles de venezolanos cruzan la frontera con Colombia para comprar productos básicos|url=https://www.bbc.com/mundo/noticias-america-latina-36757144}}<!-- auto-translated by Module:CS1 translator --></ref> This has also brought with it the appearance of a [[black market]] and [[smuggling]] throughout the entire Colombian-Venezuelan border space,<ref>{{cite news|access-date=25 April 2023|date=10 September 2015|periodical=[[El Colombiano]]|publisher=Elcolombiano.com|title=Así es el contrabando que desangra a Venezuela y Colombia|url=https://www.elcolombiano.com/colombia/asi-es-el-contrabando-que-desangra-a-venezuela-y-a-colombia-AH2696332}}<!-- auto-translated by Module:CS1 translator --></ref> in addition to some restrictions that have been imposed, such as the closure of the Venezuelan border with Colombia by [[Nicolás Maduro]] in August 2015.<ref>{{Cite web |last=Semana |date=2022-08-19 |title=Se cumplen siete años del cierre de frontera entre Colombia y Venezuela, así avanza la reapertura |url=https://www.semana.com/nacion/cucuta/articulo/se-cumplen-siete-anos-del-cierre-de-frontera-entre-colombia-y-venezuela-asi-avanza-la-reapertura/202253/ |access-date=2023-04-26 |website=Semana.com Últimas Noticias de Colombia y el Mundo |language=spanish}}</ref>

In the [[Chile]]an border towns, it is common for Chilean residents to go to make purchases in the stores of their neighboring countries, as well as to purchase medical exams and other health services at a lower cost. Notable cases are the commercial relationship between [[Arica]] and [[Tacna]], on the [[Chile–Peru border|Chilean-Peruvian border]].<ref>{{cite news|access-date=25 April 2023|date=19 July 2022|first=Ani|last=Lu Torres|periodical=[[Gestión]]|publisher=Gestion.pe|title=Tacna se encarece para los chilenos y el comercio en riesgo por depreciación del peso|url=https://gestion.pe/economia/tacna-se-encarece-para-los-chilenos-y-el-comercio-en-riesgo-por-depreciacion-del-peso-noticia/}}<!-- auto-translated by Module:CS1 translator --></ref> Likewise, despite the ruggedness of the relief when having to cross the Andes mountain range along the [[Argentina–Chile border|Argentinean-Chilean border]], there is a high flow of trans-Andean buyers, being a notable case that of Chileans near the city of [[Mendoza, Argentina|Mendoza]].<ref>{{cite news|access-date=25 April 2023|date=13 April 2023|first=Tomás|last=Molina J.|periodical=[[El Mercurio]]|publisher=[[Emol]]|title=Aluvión de chilenos en Mendoza: Repletan supermercados y hacen "explotar" el mercado del dólar blue|url=https://www.emol.com/noticias/Economia/2023/04/11/1091898/chilenos-en-mendoza.html}}<!-- auto-translated by Module:CS1 translator --></ref><ref>{{cite news|access-date=25 April 2023|date=7 April 2023|first=Mannino|last=Pablo|periodical=[[La Nación (Argentina)|La Nación]]|title=Sorprende en Mendoza la cantidad de turistas chilenos que llegaron para Semana Santa: qué productos y servicios buscan más|url=https://www.lanacion.com.ar/sociedad/sorprende-en-mendoza-la-cantidad-de-turistas-chilenos-que-llegaron-para-semana-santa-que-productos-y-nid07042023/}}<!-- auto-translated by Module:CS1 translator --></ref> More to south, a similar situation occurs between the cities of [[Punta Arenas]] and [[Río Gallegos, Santa Cruz|Río Gallegos]].<ref>{{cite web|access-date=2023-04-26|language=es-CL|title="Tour de compras": viajan de Punta Arenas a supermercados argentinos|url=https://www.24horas.cl/regiones/zona-sur/magallanes/tour-de-compras-viajan-de-punta-arenas-a-supermercados-argentinos|website=www.24horas.cl}}<!-- auto-translated by Module:CS1 translator --></ref>

===Asia===
Many [[Singapore]]ans also travel to [[Johor Bahru]] in [[Malaysia]] or [[Batam]] in [[Indonesia]], to take advantage of price differences and differing product availability. The Singaporean government has a law that requires a car leaving Singapore to have the fuel tank filled by at least 75 percent, to prevent it from being filled with fuel from outside Singapore.<ref>{{cite web |title=Three Quarter Tank Rule |url=https://www.customs.gov.sg/individuals/going-through-customs/departure/three-quarter-tank-rule |website=Singapore Customs |access-date=2 June 2021}}</ref>

[[Shenzhen]], on the border of [[mainland China]] with the special administrative region of [[Hong Kong]], also benefits from border trade.

==See also==
* [[Tax avoidance and tax evasion]]
* [[Border checkpoint]]
* [[Border control]]
* [[Arbitrage]]

==References==
<!--- See [[Wikipedia:Footnotes]] on how to create references using <ref></ref> tags which will then appear here automatically -->
{{Reflist}}

== External links ==
* [http://www.dutyfreeonarrival.com/en/land/ Duty Free on Arrival] - Global Border Shopping information search site

{{DEFAULTSORT:Border Trade}}
[[Category:Borders]]
[[Category:Trade]]