Import and export

The import is the activity of buying products or services produced by other countries.

The export is the term used when products or services are sold abroad.

The difference between import and export is the type and destination of the transaction. While importing is about buying merchandise, exporting is about selling it. On the other hand, while the import tries to cover the internal demand of a country with certain items of products, the export covers the demands of a foreign country.

Import and export are two activities related to international trade, and are carried out between countries or individuals.

What is import?

Importation is related to the entry of goods or services into national territory, coming from other countries.

The main reason for importing products is meet the demand for goods that cannot be produced in the domestic market. This can occur in the case of technology, when resources are obsolete or expensive, or when a certain product or service cannot be produced internally due to lack of skills or resources..

The level of import depends directly on the exchange rate of the local currency. If the local currency is strong (which means that your currency is priced well compared to other currencies), you can buy more foreign currencies and consequently more foreign goods, then the level of import increases. If your local currency is weak, the import level tends to decrease.

Import example

In Mexico, according to the Ministry of Economy of that country, the most imported products are:

• electrical machinery,
• petroleum oils,
• plastics,
• auto parts,
• iron,
• steel.

In Mexico this type of goods and raw materials are required, but the country does not produce them or its production is too low to satisfy internal demand, so the solution is to buy from other countries.

What is export?

Export occurs when national companies sell their products or services abroad.

There are several reasons why companies decide to export their products. First, they may want to enter new markets, and thus expand and internationalize. Some companies also decide to export to meet a demand that exists abroad, but does not exist internally.. Exporting is also a way of reducing the surplus of domestic supply and making production more efficient..

The level of export is also strictly related to the exchange rate of the local currency. If the exchange rate is weak, which means that a country with a strong currency can buy more of its currency and its goods, the level of exports increases..

Export example

According to the Secretariat of Agriculture, Livestock, Rural Development, Fisheries and Food of Mexico (Sagarpa), this country stands out for the export of items such as:

• avocados,
• beer,
• tomato,
• tequila,
• beef.

See also

• Difference between GDP and GNP
• Difference between economic growth and development.