Imports - Exports

The buying and selling of goods between countries is called FOREING TRADE. The goods we buy from other countries are called imports, and the goods we sell to other countries are called exports.

Some countries provide the rest of the world with perishable goods: fruit, coffee, grain, meat, etc. Others provide minerals: zinc, copper, aluminium, etc. Others are good at producing raw materials such as cotton, rubber or oil. While some countries excel in manufacturing raw materials, others are also good at producing technical equipment.

Each country has to import the goods and commodities it does not produce, and it has to pay for them. It does this by exporting its own goods.

The money that a country receives for its exports enables it to pay for its imports. The BALANCE OF TRADE is the difference between the value of the goods a country IMPORTS and the value of the goods it EXPORTS. If the money a country pays out for imports is more than money it receives for its exports, the balance is UNFAVOURABLE.

The goods that are imported and exported are generally called VISIBLE items. There are also a number of services that countries provide for each other. These services are called INVISIBLE ITEMS. The BALANCE OF PAYMENTS contains all the figures for all the payments, visible or invisible, between countries.

As the importing and exporting of goods are subject to a number of formalities, such as examination by customs officers at ports of entry and exchange control approval, exporters generally prefer to transact business through an export merchant house.

Governments control international trade by applying tariffs (or duties) and imposing quotas. A TARIFF is a tax to be paid on imported goods, and a QUOTA is the maximum quantity of a product that can be imported during a period.