Why Do Countries Export Goods and Services?

Exports are the products and services that are manufactured and obtained in one country by citizens of another country. How it is sent doesn’t matter. It can be delivered, emailed, or transported on an airplane in your personal baggage. If it is manufactured and marketed in a foreign country internationally, it is an export.

Exports are an international trading component. Imports are the other part. They are the goods and services obtained in a foreign country by citizens. They make up the trade balance of a country in tandem. It has a trade surplus if the nation export more than it imports. It has a trade deficit because it imports more than it exports.

While developing countries’ economies are generally not as productive as industrial countries ‘ economies, developing countries still produce certain resources and services in sums they can’t afford or use at home. This is referred to as a surplus of demand. For example, between January and August 2018, the United States imported $1.68 trillion of goods. It exported 1.12 trillion dollars to goods in the same period. That created a $565.6 billion deficit. ⠀

India’s population is its comparative advantage. Their employees speak English and are given an edge as affordable call center workers. Because of its low cost of living, China has a similar benefit in manufacturing.5 It can live on low salaries than citizens in developing countries.

Some developed countries, for example, produce large amounts of agriculture, including cocoa and Latin American coffee, that are insufficiently high to eat in their own populations. Other developing countries produce quantities of minerals that are of industrial value, such as oil or iron ore, which are too small or still not industrialized enough to use in their own economies

Exports also help to gain foreign currency from which many developing countries are able to purchase vital goods — goods foreign to which they can’t make, manufacture, or expand at home. In other words, developed countries market, in part, goods in order to buy them. Goods and services exports will also promote the domestic economies of developed countries more. 

However, foreign trade interconnectivity may be troublesome. Japan had a thriving export sector with the US, for example, until 2008. Japanese companies lost many of their consumer bases when US consumers were unable to buy Japanese products. Export sales help the US and many other industrial countries maintain high employment levels. 

In 2012, the US had nearly 4.926 million workers engaged in the manufacturing of products or services sold to another nation directly or indirectly (Johnson & Rasmussen 2013). Exports have been important for economic growth and development in the United States and other highly profitable and diverse economies. 

Many countries tightened their (economic) belts when the economic crisis began in 2007. There has been a decline in export sales and a significant loss of employment in producing countries. In 2012 the goods and services deficit decreased by $8.2 billion, with exports up to $6 billion, or 3.2 percent (US Census, 2013). Records of exports in 2012, a decline in the cost of imported crude oil, and a decline in demand for imported products are the reasons for this shortfall.

As major economies, such as China, rely on these as an investment source. Despite the shift into domestic energy production in the U.S., fuels and mining goods remain a significant export, which may result in this number decreasing. Finally, agriculture represents the least amount of commodities that are exported and for the remainder of its products, many developing countries depend on domestic crop production. The U.S. recently signed agricultural export trade deals that will improve the volume of trade in the world market in agriculture (USTR, 2013).


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