Buying foreign goods can be a way of importing foreign labour
Workers move across borders far less freely than products do. So countries often trade the goods that contain those inputs instead. When the United States buys labour-intensive products made in China, it is in effect importing Chinese labour without any workers relocating. Economists see trade in goods as a stand-in for trade in people and capital.
At heart, trading across a border is no different from trading down the street: buyers and sellers want the same things. What changes is the cost. International deals face tariffs plus a thicket of less visible barriers, including delays at borders, differences of language and culture, unfamiliar legal systems and differing product safety rules. Currencies, government policies and laws all shape the exchange, which is why bodies such as the World Trade Organization exist to smooth it. Trade is ancient, as the Silk Road and the Amber Road show, but its weight in the world economy has grown sharply in recent centuries.
People can boost it. One 2010 report found that hosting a network of immigrants raised a country's trade, although the effect faded as those immigrants assimilated.
The environmental arithmetic is less obvious than it looks. Food miles turn out to be a relatively minor source of carbon emissions, and seasonal differences can make importing from far away cleaner than growing locally in heated greenhouses or storing crops for months. A 2020 study concluded that, under current patterns of production and consumption, locally grown crops within 100 kilometres could not feed between 72 and 89 percent of the world's population. On the other hand, another 2020 analysis of 189 countries found that global supply chains leave most nations exposed to over-exploited water, energy and land far away.
Trade figures can also expose what they miss. Mali, Africa's third-largest gold exporter, taxed only the first 50 kilograms of gold exports each month, and in 2014 it reported producing 45.8 tonnes while the United Arab Emirates recorded importing 59.9 tonnes, a gap investigators linked to smuggling. On a lighter note, American presidents have proclaimed a World Trade Week each May since 1935.
Source: International trade
