Foreign Trade

Countries buy and sell various goods as well as various services. Goods bought from abroad, such as food, cars, machines, medicines, books and many others, are called visible imports. Goods sold abroad are called visible exports.

Services, such as insurance, freight, tourism, technical expertise and others, are called invisible imports and invisible exports. The total amount of money a country makes including money from visible and invisible exports, for a certain period of time, usually for a year, is Gross National Product, or GNP.

The difference between a country’s total earnings or GNP, and its total expenditure is called its balance of payments. The difference between what a country receives for its visible exports and what it pays for its visible imports is its balance of trade. If a country sells more goods than it buys, it will have a surplus. If a country buys more than it sells, it will have a deficit.

In the 19^th century Britain dominated international trade, accounting for about one-third of world’s exports. Early in the 20^th century its position changed. The volume of world’s exports increased but the percentage of British exports in world trade declined significantly.

But still foreign trade is vital to Britain’s livelihood. With a large population, small land area, and few natural resources, the country must depend on foreign trade to supply the raw materials for English factories and to provide a market for the sale of the thousands of types of manufactured goods produced by English industries. The United Kingdom’s principal exports are vehicles, machinery, manufactured goods and textiles. Her main exports are foodstuff and most of the raw materials for industry. Britain imports half the food it needs.

There is usually an unfavorable balance of trade, that is, imports exceed exports, but this compensated for in part by the so-called invisible trade.

The earnings from invisible trade come in the way of shipping charges, interest payments from foreign investments, interest payments from British enterprises abroad, and tourist expenditure. The earnings from foreign tourist trade make this one of Britain’s important industries.

Britain has got very sound economic ties with various countries of the world, especially the Commonwealth countries. The Commonwealth, officially called the Commonwealth of Nations, has grown out of the old British Empire which came to an end with the Second World War. The Commonwealth countries are Canada, Australia, New Zealand and many other countries and territories. The United Kingdom has been a member of the European Free Trade Association since 1959, and a member of the European Economic Community since 1973.

Дата добавления: 2014-11-25