What is a net exporter?
A net exporting country is a country or region where the value of an exported product is higher than the value of an imported product over a period of time.
- A net exporter is a country that sells more goods abroad through trade than it does from abroad.
- Net exporters have a current account surplus, and depreciation of currencies tends to make exports attractive in the global market.
- Countries rich in natural resources such as oil tend to be net exporters.
Understand net exporters
Each country trades to buy and sell goods all over the world. Imported products are brought in from overseas, and exported products are sold domestically. A trade balance is said to be positive if the total amount of exports in a country is higher than the total amount of imports.
A country produces goods based on the resources available in its area. Whenever a country cannot produce a particular good, but still wants it, that country can buy it from another country that produces and sells that good.
When a country buys goods from another country, brings them to their own country and distributes them to the public, it is an import. When a country produces a good domestically and sells it to another country, it is an export. If one country sells more goods to another than it buys, it is a net exporter.
A net exporter is the opposite of a net importer in a country or region where the value of goods or services imported over a period of time is higher than the value of goods or services exported.
Net exporters, by definition, run a total current account surplus. However, depending on the type of goods and services traded, the competitiveness of these goods and services, the exchange rate, the level of government spending, trade barriers, etc., individual countries and regions may be in the red or in the black.
In the United States, the Department of Commerce collects monthly imports and exports on a number of table displays.
Saudi Arabia and Canada are examples of net exporters because they sell to other countries that are rich in oil and unable to meet their energy needs.
It is important to note that a country may be a net exporter in certain regions and a net importer in other regions. For example, Japan is a net exporter of electronic equipment, but oil must be imported from other countries to meet its needs. On the other hand, the United States is a net importer, and as a result, it has a current account deficit.
Net exports are the country’s total exports minus the country’s total imports. This is a measure used to aggregate national spending or gross domestic product in an open economy.
If a country’s currency is weak, that country’s exports are generally more competitive in the international market, which promotes positive net exports. Conversely, in countries with strong currencies, their exports are more expensive and domestic consumers can buy foreign exports at lower prices, which can lead to negative net exports.