How important is foreign trade to the United States?.

Why do nations control trade and how? .

WHAT IS TRADE?

Trade is an exchange of goods for some-
thing else of value. Goods may be traded for
money, for other goods, or for services.
"Foreign trade," as we will be discussing it
in this pamphlet, refers to trade which the
businessmen of different countries engage in
across the borders of other nations. When
we speak of "nations" trading with one an-
other, we mean the thousands of individuals
within a particular country who engage in in-
ternational trade.

WHY IS THERE TRADE AMONG NATIONS?

People trade in order to obtain the things
they are unable to produce themselves or that

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they can obtain elsewhere at lower cost. They
have found that goods are produced better
and cheaper if some persons specialize in
making cars, some in weaving cloth, some in
processing foods, and so forth. Instead of
each of us trying to be self-sufficient, we thus
trade what we do best for the goods and

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services which others can provide at less cost.
Furthermore, even if we tried to be self-
sufficient, it would be difficult if not impos-
sible. Unlike the American Plains Indian
who could obtain his food, clothes, and tepee
skins from the buffalo, most of today's Ameri-
cans could hardly raise their own food, weave
their own cloth, or make the materials needed
to build a house.

Similarly, a nation can obtain many
goods from other countries more cheaply than
if they were produced at home. For in-
stance, some hand-tooled precision instru-
ments from Europe cost less than similar
instruments made in this country. On the
other hand, many countries depend on mass-
produced American goods which are cheaper

than like products of foreign countries.
Moreover, a country never produces all the
things it needs-the United States, for in-
stance, does not have natural rubber trees or
tin and has relatively little of a number of
products including nickel and chrome. These
are some of the many items we must buy
from other countries if we want to produce
the goods we need.

In order to help pay for imports-those
goods we want or need from overseas-we
must sell abroad our goods, called exports.
Conversely, in order that other countries may
get the dollars to buy our products, we must
buy their goods. This buying and selling is
world trade, an activity which is essential to
the continued progress of a nation.