International Trade. Key Vocabulary

Key Vocabulary

Every year countries throughout the world exchange goods and services. Some countries import goods (bring in goods from other countries) and some countries export goods (send goods to other countries). Whether a country exports or imports all depends on what the country produces and what the country needs.

What products does your country import?

What products does your country export?

The United Kingdom imports a lot of fruit and vegetables from Spain and it exports products like cars, iron and steel to hundreds of countries in the world.

So, why do countries trade?

Countries trade business because every nation wants the best for its inhabitants. If we take the United Kingdom as an example, we see that they import tomatoes, cucumbers, strawberries and many other groceries from Spain. They do this because as a nation they do not have the correct environment to produce these products all year round, whereas Spain does. The UK also imports these products because they buy them cheaper than if they were to cultivate them themselves.

Governments can control international trade in different ways. The most common means are tariffs and quotas. A tariff is a tax imposed on imported goods, whereas a quota is the maximum quantity of a product that may be admitted in a country during a certain period of time.

In 1957 The European Community was founded with the aim of creating a single European Market. This EC has effected trade between European countries. Tariffs and quotas are slowly being eliminated.