Trade by ship conducted exclusively from port to port of a single nation is usually regulated by the national law of the host nation and thus of import to maritime law.
The term appears to have been of Spanish origin and was designed to regulate those legal disputes that occur whilst a ship was engaged in cabotage (coastal trading, more particularly to insist on the jurisdiction of host-nation law or, in some cases, to require that ships engaged in cabotage defer to host-nation vessels or registration.
The term coastal trade or coastal trading is now preferred to the term cabotage.
Australia, for example, has several statutes that deal with cabotage such as the Coastal Waters (State Powers) Act (1980) which defines the coastal waters of Australia as follows:
"'coastal waters of the State' means, in relation to each State (a) the part or parts of the territorial sea of Australia that is or are within the adjacent area in respect of the State....
§198 of the Marine Transport Act 1994 of New Zealand is explicit:
"No ship shall carry coastal cargo, unless the ship is (a) a New Zealand ship; or (b) a foreign ship on demise charter to a New Zealandbased operator who employs or engages a crew to work on board the ship under an employment agreement or contract for services governed by New Zealand law...."
Similarly, this extract from the Canadian Coasting Trade Act:
"... no foreign ship or non-duty paid ship shall, except under and in accordance with a licence, engage in the coasting trade."
There are exceptions to these cabotage statutes such as where dpomestically-registered ships are not up to the job at hand and must then obtain a cabotage or coast trade license.
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