What Is a Net Exporter?
A net exporter is a country or territory whose value of exported goods is higher than its value of imported goods over a given period of time.
Countries produce goods based on the resources available in their region. Whenever a country cannot produce a particular good but still wants it, that country can buy it from other countries who produce and sell that good.
When a country purchases a good from another country and brings it to its own country to distribute to its people, that is an import. When a country produces a good domestically and then sells it to other countries, that is an export. When a country sells more goods to other countries than it buys, that is a net exporter.
A net exporter is the opposite of a net importer, which is a country or territory whose value of imported goods and services is higher than its exported goods and services over a given period of time.
- A net exporter is a country, which in aggregate, sells more goods to foreign countries through trade than it brings in from abroad.
- Net exporters run current account surpluses, and a weaker currency tends to make exports attractive on a global market.
- Countries abundant in natural resources such as oil tend to be net exporters.
Understanding Net Exporters
Nations engage in trade to buy and sell goods across the globe. Imports are items brought in from foreign countries, while exports are made domestically and sold abroad. When a country's total value of exported goods is higher than its total value of imports, it is said to have a positive balance of trade.
A net exporter, by definition, runs a current account surplus in the aggregate; however, it may run deficits or surpluses with individual countries or territories depending on the types of goods and services traded, competitiveness of these goods and services, exchange rates, levels of government spending, trade barriers, etc.
In the U.S., the Commerce Department keeps monthly tallies on exports and imports in numerous table displays.
Examples of Net Exporters
Saudi Arabia and Canada are examples of net exporting countries because they have an abundance of oil which they then sell to other countries that are unable to meet the demand for energy.
It is important to note that a country can be a net exporter in a certain area, while being a net importer in other areas. For example, Japan is a net exporter of electronic devices, but it must import oil from other countries to meet its needs. On the other hand, the United States is a net importer and runs a current account deficit as a result.
If a country has a weak currency, its exports are generally more competitive in international markets, which encourages positive net exports. Conversely, if a country has a strong currency, its exports are more expensive and domestic consumers can buy foreign exports at a lower price, which can lead to negative net exports.