The Case Against Protection 5. The balance of trade is the difference between our exports and imports. If imports exceed exports there is a 'trade deficit' that must be financed by borrowing from abroad or selling off assets. If exports exceed imports there is a 'trade surplus' and the difference can be used to lend to other countries or buy assets. What we buy and sell includes goods and services.
Goods are fairly straight forward.
They essential include things produced by the primary and secondary sectors of the economy. The primary sector includes farming, fishing, forestry and mining industries. The secondary sector involves the manufacturing industries. Services are a little more complex. Some services are more intangible like banking and management services, engineering and design services as well as the flow of intellectual property royalties.