International Trade
International trade is the exchange of capital, goods, and services across international borders or territories.
Import – the purchase of good or service from another country. Export – the sale of goods or service to another country.
We normally think of goods being shipped between countries, but for services that is not necessarily true.
Goods( visible):manufacturing, mining, agricult.products. Services (invisible): banking, tourism, education, construction. Travel and tourism are large categories of service exports. For example, the money spent by US visitor to the Eiffel Tower is a service export of France.
Baku Crystal Hall is the service export on construction, because it was constructed and built on-site by German architectural company called GMP International. It is the company located in Hamburg, German. Our government spent over 100 mln. Euros on this project, and this sum of money is added to the Germany service exports.
The trade balance of a country is the difference between its exports and imports. Countries that export more than import are running trade surplus like China. Countries that import more than export are running trade deficit, like USA.
There are many reasons why nations trade goods, the most obvious reason is that they can get products from abroad that are cheaper or higher quality than those that can be produced at home. The fact that Germany was the largest exporter of goods in 2006 reflects its world class technologies for producing high quality goods like BMW or Mercedes Benz cars. China on other hand can produce goods more cheaply than most industrial countries. The US has both the technology for producing high quality goods and the ability to produce goods very cheaply (because of the abundance of resource as well as government subsidies)
Another example of world trade is Barbie doll manufacturing. The products shown here are supplied by various countries for manufacturing a Barbie doll which is sold the United States. China
Import – the purchase of good or service from another country. Export – the sale of goods or service to another country.
We normally think of goods being shipped between countries, but for services that is not necessarily true.
Goods( visible):manufacturing, mining, agricult.products. Services (invisible): banking, tourism, education, construction. Travel and tourism are large categories of service exports. For example, the money spent by US visitor to the Eiffel Tower is a service export of France.
Baku Crystal Hall is the service export on construction, because it was constructed and built on-site by German architectural company called GMP International. It is the company located in Hamburg, German. Our government spent over 100 mln. Euros on this project, and this sum of money is added to the Germany service exports.
The trade balance of a country is the difference between its exports and imports. Countries that export more than import are running trade surplus like China. Countries that import more than export are running trade deficit, like USA.
There are many reasons why nations trade goods, the most obvious reason is that they can get products from abroad that are cheaper or higher quality than those that can be produced at home. The fact that Germany was the largest exporter of goods in 2006 reflects its world class technologies for producing high quality goods like BMW or Mercedes Benz cars. China on other hand can produce goods more cheaply than most industrial countries. The US has both the technology for producing high quality goods and the ability to produce goods very cheaply (because of the abundance of resource as well as government subsidies)
Another example of world trade is Barbie doll manufacturing. The products shown here are supplied by various countries for manufacturing a Barbie doll which is sold the United States. China