Importing is the activity of buying products or services produced by other countries, while exporting is the term used to sell products or services to foreign countries.
Both are the main activities of a country's international trade.
| Import | Export | |
|---|---|---|
| What is it | Importation refers to the entry of goods or services into the country from abroad. | Export comprises the departure of goods and services from a country, being sent abroad. |
| Reason | Meet the demand for products that cannot be produced in the country. | Enter new markets, find demand for a particular product and reduce surplus. |
| Product origin | Produced abroad. | Produced in national territory. |
| Significant factors | The import depends directly on the local currency exchange rate. | The local currency exchange rate also directly influences exports. |
What is import?
Importation is related to the entry of goods or services into national territory, from other countries.
The main reason for importing products is to 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 particular product or service cannot be produced internally due to lack of skills or resources.
The import level directly depends on the local currency exchange rate. If the local currency is strong, that is, if it has a good price compared to other currencies, you can buy more foreign currencies and, consequently, more foreign goods. Thus, the import level increases. If the local currency is weak, the import level tends to decrease.
Example: Brazil hires labor from India, or buys natural gas from Bolivia.
What is export?
Export happens 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 that does not exist internally. Exporting is also a great way to decrease supply surplus and make production more efficient.
The export level is also strictly related to the local currency exchange rate. If the exchange rate is weak, which means that a country with a strong currency can buy more of its currency and goods, the level of exports increases.
Example: Brazil sells soybeans to China.
Products that Brazil imports and exports
Among the products most exported by Brazil are soybeans, iron ore, crude petroleum oils, sugar and chicken meat.
The most imported products are human and veterinary medicines, automobiles, parts and pieces for vehicles and insecticides. Data from 2016, according to the ADVFN portal.
See also the differences between:
- Wholesale and retail
- Microeconomics and Macroeconomics
- Stages of the Industrial Revolution
