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 goods, exporting is about selling them. On the other hand, while importing attempts to meet a country’s domestic demand with certain product items, exporting meets the demands of a foreign country.
Importing and exporting are two activities related to international trade, and are carried out between countries or individuals.
| Import | Export | |
|---|---|---|
| Definition | Entry of goods or services into a country from abroad, as a result of international transactions or trade. | Outflow of goods or services from a country to a foreign country, as a result of international transactions or exchanges. |
| Objective | To meet the demand for products that cannot be produced in the country. | Enter new markets, find demand for a certain product and reduce surplus. |
| Origin of goods or services. | Produced abroad. | Produced in national territory. |
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 may 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 imports depends directly on the exchange rate of the local currency. If the local currency is strong (meaning that its currency has a good exchange rate compared to other currencies), it can buy more foreign currencies and therefore more foreign goods, then the level of import increases. If your local currency is weak, the import level tends to decrease.
Example of import
In Mexico, according to the Mexican Ministry of Economy, the most imported products are:
- electrical machinery,
- petroleum oils,
- plastics,
- automotive parts,
- iron,
- steel.
In Mexico these types of goods and raw materials are required, but the country does not produce them or its production is too low to satisfy domestic demand, so the solution is to buy from other countries.
What is export?
Exporting occurs when domestic 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 domestically. Exporting is also a way to decrease the domestic supply surplus and make 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 strong currency country can buy more of its currency and goods, the export level increases.
Example of export
According to Mexico’s Secretariat of Agriculture, Livestock, Rural Development, Fisheries and Food (SAGARPA), Mexico stands out for exporting items such as:
- avocados,
- beer,
- tomato,
- tequila,
- beef.
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