An export is the sale of a UK-made good or service overseas. A nation trades because it lacks the raw materials, climate, specialist labour, capital or technology needed to manufacture a particular good. Trade allows a greater variety of goods and services. The principle of comparative advantage states that countries will benefit by concentrating on the production of those goods in which they have a relative advantage. For instance, France has the climate and the expertise to produce better wine than Brazil.
Brazil is better able to produce coffee than France.
France then creates a surplus of wine which it can trade for surplus Brazilian coffee. Unfair competition . Foreign firms may receive subsidies or other government benefits. Balance of payments . Reducing imports improves the balance of trade.