What is International Trade.
International trade is when countries exchange goods and services with one another. Usually each country will use money to pay for the goods or services from the other country. Goods can be things like clothes, food, machine parts, or even things like furniture. Services are tasks or jobs that one country does for another. For example, putting the small pieces of a doll together to make one whole doll is a service. Countries that have lots of people without higher education need to trade these kinds of service because it gives their people jobs. When goods are moved from one country to another they have two special names. Goods coming into a country are called imports. Goods going out of a country are called exports. Sometimes a country imports more goods from another country than it exports to that country. This is called having a trade deficit. Other times a country exports more goods to a country than it imports from that same country. This is called having a trade surplus. Today the United States has a trade deficit with Japan because we receive more goods from them than we send to them. Countries trade with each other because today no one country can produce everything that it needs by itself. For example, a country with lots of farmland might have plenty of food, but it might not have any factories to make cars. Another country might have many factories to make cars but very little farmland to grow food. One country will grow lots of food and sell some of it to the other country. The other country will make lots of cars and sell some of them to the other country. Then each country takes the money that they made and buys other things that it needs. International trade and finance link world economics. Through trade, changes in economic conditions in on place on the globe can quickly affect other places. Japan is the third top exporter by dollar value.
