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An import is the receiving country in an
export
An export in international trade is a good produced in one country that is sold into another country or a service provided in one country for a national or resident of another country. The seller of such goods or the service provider is an ...
from the sending country. Importation and exportation are the defining
financial transaction
A financial transaction is an agreement, or communication, between a buyer and seller to exchange goods, services, or assets for payment. Any transaction involves a change in the status of the finances of two or more businesses or individuals. A ...
s of
international trade
International trade is the exchange of capital, goods, and services across international borders or territories because there is a need or want of goods or services. (see: World economy)
In most countries, such trade represents a significant ...
.
In international trade, the importation and exportation of goods are limited by
import quota
An import quota is a type of trade restriction that sets a physical limit on the quantity of a good that can be imported into a country in a given period of time.
Quotas, like other trade restrictions, are typically used to benefit the producers o ...
s and mandates from the
customs
Customs is an authority or agency in a country responsible for collecting tariffs and for controlling the flow of goods, including animals, transports, personal effects, and hazardous items, into and out of a country. Traditionally, customs ...
authority. The importing and exporting jurisdictions may impose a
tariff
A tariff is a tax imposed by the government of a country or by a supranational union on imports or exports of goods. Besides being a source of revenue for the government, import duties can also be a form of regulation of foreign trade and poli ...
(tax) on the goods. In addition, the importation and exportation of goods are subject to
trade agreement
A trade agreement (also known as trade pact) is a wide-ranging taxes, tariff and trade treaty that often includes investment guarantees. It exists when two or more countries agree on terms that help them trade with each other. The most common tr ...
s between the importing and exporting jurisdictions.
History
Definition
Imports consist of transactions in goods and services to a resident of a jurisdiction (such as a nation) from non-residents. The exact definition of imports in
national accounts
National accounts or national account systems (NAS) are the implementation of complete and consistent accounting techniques for measuring the economic activity of a nation. These include detailed underlying measures that rely on double-entry ...
includes and excludes specific "borderline" cases. Importation is the action of buying or acquiring products or services from another country or another market other than own. Imports are important for the economy because they allow a country to supply nonexistent, scarce, high cost, or low-quality certain products or services, to its market with products from other countries.
A general delimitation of imports in national accounts is given below:
* An import of a good occurs when there is a change of ownership from a non-resident to a resident; this does not necessarily imply that the good in question physically crosses the frontier. However, in specific cases, national accounts impute changes of ownership even though in legal terms no change of ownership takes place (e.g. cross border financial leasing, cross border deliveries between affiliates of the same enterprise, goods crossing the border for significant processing to order or repair). Also, smuggled goods must be included in the import measurement.
* Imports of services consist of all services rendered by non-residents to residents. In national accounts any direct purchases by residents outside the economic territory of a country are recorded as imports of services; therefore all expenditure by tourists in the economic territory of another country are considered part of the imports of services. Also, international flows of illegal services must be included.
Basic trade statistics often differ in terms of definition and coverage from the requirements in the national accounts:
* Data on international trade in goods are mostly obtained through declarations to custom services. If a country applies the general trade system, all goods entering the country are recorded as imports. If the special trade system (e.g. extra-EU trade statistics) is applied goods that are received into customs warehouses are not recorded in external trade statistics unless they subsequently go into free circulation of the importing country.
* A special case is the intra-EU trade statistics. Since goods move freely between the member states of the EU without customs controls, statistics on trade in goods between the member states must be obtained through surveys. To reduce the statistical burden on the respondent's small-scale traders are excluded from the reporting obligation.
* Statistical recording of trade in services is based on declarations by banks to their central banks or by surveys of the main operators. In a globalized economy where services can be rendered via electronic means (e.g. internet) the related international flows of services are difficult to identify.
* Basic statistics on international trade normally do not record smuggled goods or international flows of illegal services. A small fraction of the smuggled goods and illegal services may nevertheless be included in official trade statistics through dummy shipments or dummy declarations that serve to conceal the illegal nature of the activities.
Balance of trade
A country has
demand
In economics, demand is the quantity of a good that consumers are willing and able to purchase at various prices during a given time. The relationship between price and quantity demand is also called the demand curve. Demand for a specific item ...
for an import when the
price
A price is the (usually not negative) quantity of payment or compensation given by one party to another in return for goods or services. In some situations, the price of production has a different name. If the product is a "good" in the c ...
of the good (or service) on the
world market is less than the price on the
domestic market
A domestic market, also referred to as an internal market or domestic trading, is the supply and demand of goods, services, and securities within a single country. In domestic trading, a firm faces only one set of competitive, economic, and market ...
.
The
balance of trade
The balance of trade, commercial balance, or net exports (sometimes symbolized as NX), is the difference between the monetary value of a nation's exports and imports over a certain time period. Sometimes a distinction is made between a balance ...
, usually denoted
, is the difference between the value of all the goods (and services) a country exports and the value of the goods the country imports. A
trade deficit
The balance of trade, commercial balance, or net exports (sometimes symbolized as NX), is the difference between the monetary value of a nation's exports and imports over a certain time period. Sometimes a distinction is made between a balance ...
occurs when imports are larger than exports. Imports are impacted principally by a country's
income
Income is the consumption and saving opportunity gained by an entity within a specified timeframe, which is generally expressed in monetary terms. Income is difficult to define conceptually and the definition may be different across fields. For ...
and its productive resources. For example, the
US imports
oil
An oil is any nonpolar chemical substance that is composed primarily of hydrocarbons and is hydrophobic (does not mix with water) & lipophilic (mixes with other oils). Oils are usually flammable and surface active. Most oils are unsaturated ...
from
Canada
Canada is a country in North America. Its ten provinces and three territories extend from the Atlantic Ocean to the Pacific Ocean and northward into the Arctic Ocean, covering over , making it the world's second-largest country by tot ...
even though the US has oil and Canada uses oil. However,
consumer
A consumer is a person or a group who intends to order, or uses purchased goods, products, or services primarily for personal, social, family, household and similar needs, who is not directly related to entrepreneurial or business activities. T ...
s in the US are
willing to pay more for the
marginal
Marginal may refer to:
* ''Marginal'' (album), the third album of the Belgian rock band Dead Man Ray, released in 2001
* ''Marginal'' (manga)
* '' El Marginal'', Argentine TV series
* Marginal seat or marginal constituency or marginal, in polit ...
barrel of oil than Canadian consumers are, because there is more oil demanded in the US than there is oil produced.
In
macroeconomic theory
Macroeconomics (from the Greek prefix ''makro-'' meaning "large" + ''economics'') is a branch of economics dealing with performance, structure, behavior, and decision-making of an economy as a whole.
For example, using interest rates, taxes, and ...
, the value of imports can be modeled as a function of domestic
absorption (spending on everything, regardless of source) and the
real exchange rate
In finance, an exchange rate is the rate at which one currency will be exchanged for another currency. Currencies are most commonly national currencies, but may be sub-national as in the case of Hong Kong or supra-national as in the case of t ...
. These are the two most important factors affecting imports and they both affect imports positively.
Types of import
There are two basic types of import:
* Industrial and consumer goods
* Intermediate goods and services
Companies import goods and services to supply to the domestic market at a cheaper price and better quality than competing goods manufactured in the domestic market. Companies import products that are not available in the local market.
There are three broad types of importers:
* Those looking for any product around the world to import and sell
* Those looking for foreign sourcing to get their products at the cheapest price
* Those who using foreign sourcing as part of their global
supply chain
In commerce, a supply chain is a network of facilities that procure raw materials, transform them into intermediate goods and then final products to customers through a distribution system. It refers to the network of organizations, people, acti ...
Direct-import refers to a type of business importation involving a major retailer (e.g.
Wal-Mart
Walmart Inc. (; formerly Wal-Mart Stores, Inc.) is an American multinational retail corporation that operates a chain of hypermarkets (also called supercenters), discount department stores, and grocery stores from the United States, headquarter ...
) and an overseas
manufacturer
Manufacturing is the creation or production of goods with the help of equipment, labor, machines, tools, and chemical or biological processing or formulation. It is the essence of secondary sector of the economy. The term may refer to a ran ...
. A retailer typically purchases products designed by local companies that can be manufactured overseas. In a direct-import program, the retailer bypasses the local supplier (colloquial: "middle-man") and buys the final product directly from the manufacturer, possibly saving in
added cost
In business, total value added is calculated by tabulating the unit value added (measured by summing unit profit sale price and production cost">Price.html" ;"title="he difference between Price">sale price and production cost], unit depreciatio ...
data on the value of imports and their quantities often broken down by detailed lists of products are available in
International trade#Data, statistical collections on international trade published by the statistical services of intergovernmental organisations (e.g.
UNSD
The United Nations Statistics Division (UNSD), formerly the United Nations Statistical Office, serves under the United Nations Department of Economic and Social Affairs (DESA) as the central mechanism within the Secretariat of the United Nations t ...
,
FAOSTAT
The Food and Agriculture Organization Corporate Statistical Database (FAOSTAT) website disseminates statistical data collected and maintained by the Food and Agriculture Organization (FAO). FAOSTAT data are provided as a time-series from 1961 in mo ...
,
OECD
The Organisation for Economic Co-operation and Development (OECD; french: Organisation de coopération et de développement économiques, ''OCDE'') is an intergovernmental organisation with 38 member countries, founded in 1961 to stimulate e ...
), supranational statistical institutes (e.g.
Eurostat
Eurostat ('European Statistical Office'; DG ESTAT) is a Directorate-General of the European Commission located in the Kirchberg, Luxembourg, Kirchberg quarter of Luxembourg City, Luxembourg. Eurostat's main responsibilities are to provide statis ...
) and national statistical institutes.
Import of goods
Importation and declaration and payment of customs duties is done by the importer of record, which may be the owner of the goods, the purchaser, or a licensed customs broker.
See also
*
Export function The Export function is an idea used in economic theories to measure exports. The total amount of exports, E, in a nation is mainly affected by two variables, see import, the total foreign absorption and the real exchange rate.Burda, Wyplosz (2005): ...
*
Importation right An importation right is the legal ability to import a product into a certain country.
Importation means "sending goods from one country to another". Right means "in accord with law...."Black's Law Dictionary, p. 483 (2001).
See also
* Import duty ...
*
List of countries by imports
This is a list of countries by total imports, based on the International Trade Centre except for the European Union.
See also
* List of countries by exports
* List of countries by leading trade partners
* List of U.S. states and territo ...
References
External links
General Procedure of Import TradeImport dataWorld imports by country in World Bank's
World Integrated Trade Solution {{unreferenced, date=February 2012
The World Integrated Trade Solution (WITS) is a trade software provided by the World Bank for users to query several international trade databases.
WITS allows the user to query trade statistics (export, import, ...
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