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Read this section to learn about why businesses are going global and the difference between imports and exports.

Importing and Exporting

Nations export products for which they have a competitive advantage in order to import products for which they lack a competitive advantage.


LEARNING OBJECTIVES

Explain the difference between imports and exports


KEY TAKEAWAYS

Key Points
  • Exports refers to selling goods and services produced in the home country to other markets.
  • Imports are derived from the conceptual meaning, as to bringing in the goods and services into the port of a country.
  • An import in the receiving country is an export to the sending country.
Key Terms
  • capital goods: Produced goods that are chiefly used in production of further goods, in contrast to the consumer goods


In International Trade, "exports" refers to selling goods and services produced in the home country to other markets. Any good or commodity, transported from one country to another country in a legitimate fashion, typically for use in trade. Export goods or services are provided to foreign consumers by domestic producers. The buyer of such goods and services is referred to an "importer" who is based in the country of import, whereas the overseas-based seller is referred to as an "exporter". Thus, an import is any good (e.g., a commodity) or service brought in from one country to another country in a legitimate fashion, typically for use in trade. It is a good that is brought in from another country for sale. Import goods or services are provided to domestic consumers by foreign producers. An import in the receiving country is an export to the sending country.

When a country, South Africa for example, sells its products to other countries, we call it exporting, and when South Africa buys goods from other countries, we call it importing. South Africa exports mainly primary products, such as products from mining (gold, diamonds, platinum, manganese, chromium, coal, iron ore, and asbestos), and agricultural products, such as wool, sugar, hides, and fruit. South Africa purchases capital goods, such as machinery, computers, and electronic products, from other countries. The money that is earned through exports is used to pay for imported products and in this way, the numerous needs of South Africans are satisfied.

Container Ship in Kaoshiung Habor, ROC: Exporting raw materials accounts for the funds spent on importing finished goods.