What is a Net Importer?

John Lister

A net importer is a country that imports goods to a greater total value than it exports goods. Calling a country a net importer usually refers to a specific type of good but could be used to refer all goods. To avoid confusion, the term balance of trade is more commonly used when referring to all goods.

A country is a net importer in some goods but a net exporter in others in most cases.
A country is a net importer in some goods but a net exporter in others in most cases.

It is very common for a country to be a net importer with some goods and a net exporter with other goods. For example, many Asian nations are net exporters of technological goods. This is because they have established industries that produce technological products at a lower price than some other regions. Most of these nations are net importers of oil, though. This is because there are often fewer sources of oil supplies in these countries.

A nation's overall pattern of imports and exports of all goods is known as a balance of trade. If it exports more than it imports, the balance of trade is positive; if it imports more than it exports, it is negative. Whether a negative balance of trade is problematic is a hotly disputed topic among economists. Those who believe it a problem argue that it will lead to both domestic production and employment declining. Those who do not see it as problem argue that it will be taken care of by the market and if a country maintains a negative balance of trade, the country as a whole will eventually be unable to afford further imports.

It's important to note that whether or not a country is a net importer or exporter, and the position of its balance of trade, is based on monetary values rather than physical units. Countries with highly sophisticated and extensive manufacturing may export goods to a total higher value than they import. This may be despite importing more physical units. This will usually be because raw materials are imported from developing nations in large numbers, then used to produce a smaller quantity of high-value goods.

A country may be a net importer or exporter of services as well as goods. One example would be a country that houses a lot of call centers for foreign-based businesses. Most balance of trade statistics include the value of services as well as goods.

Curiously the addition of import and export figures for all countries does not produce the expected net effect of a complete balance. Instead, exports often exceed imports by a small proportion. This is partly due to inaccuracies and partly due to goods being imported but not officially recorded, usually through attempts to smuggle and evade taxes.

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