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What is a Net Export?

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  • Written By: James Doehring
  • Edited By: Lauren Fritsky
  • Last Modified Date: 06 September 2016
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A net export is the remaining monetary value after total imports have been subtracted from total exports. It is usually used in reference to the balance of trade between nations. The statistics of legal trade between nations may not reflect certain activities that many consider important, such as the transfer of raw materials and illegal goods. Economists have debated the advantages and disadvantages of maintaining a net export in trade for centuries. The long-term consequences for imbalances in trade are not well-understood.

The system of mercantilism that thrived during the 1600s and 1700s sought to achieve a net export. Governments believed that amassing gold was required to achieve wealth and prosperity—in other words, possessing money is identical to possessing wealth. Furthermore, the mercantilists assumed the global supply of wealth was fixed. It made sense, then, to ensure exports always exceeded imports. This net export would result in a steady accumulation of gold, and it was thought, a position of global leadership.

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Industrialized countries typically import much more raw material than they export. This is possible because they tend to have the industrial capacity to manufacture complicated products efficiently. Manufacturing companies often push domestic natural resources to depletion, and governments seek to preserve what is left by restricting access to those resources. Therefore, developed countries can maintain a positive net export in monetary terms while sustaining a net import of materials. This sort of economic exchange is the subject of criticism from human rights activists seeking to protect less-developed countries from exploitation.

An effect that is not captured by the official statistics of a net export is that of the black market. The black market is a term for all exchanges of goods or services that, for whatever reason, are traded illegally. Governments often ban the manufacture, transport and sale of certain items, citing health, safety or environmental concerns. Drugs, weapons and even exotic animals are examples of goods that are smuggled regularly between nations that outlaw such transactions. Some estimate that the value of the global black market exceeds $1 trillion US Dollars (USD) every year.

The United States has run a trade deficit—a negative net export—since the mid 1970s. This deficit increased even more during the early 2000s. China, on the other hand, is currently running a large net export. Many economists think that such imbalances in trade are unsustainable, but it is not clear what kind of consequences the global economy will face or when they will occur.

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