What is a Net Exporter?
A net exporter is a country that sells more to other countries than it buys from other countries. Countries are often net exporters in some industries (natural gas, for example) but net importers in others.
How Does a Net Exporter Work?
Net exports are measured by comparing the value of the goods imported over a specific time period to the value of similar goods exported during that period. The formula for net exports is:
Net Exports = Value of Exports - Value of Imports
For example, let's suppose Canada purchased $3 billion of gasoline from other countries last year, but it also sold $7 billion of gasoline to other countries last year. Using the formula above, Canada's net gasoline exports are:
Net Exports = $7 billion - $3 billion = $4 billion
Why Does a Net Exporter Matter?
When the value of goods exported is higher than the value of goods imported, the country is said to have a positive balance of trade for the period. When taken as a whole, this can be an indicator of a country's savings rate, future exchange rates, and to some degree its self-sufficiency (though economists constantly debate the idea).
Personalized Financial Plans for an Uncertain Market
In today’s uncertain market, investors are looking for answers to help them grow and protect their savings. So we partnered with Vanguard Advisers -- one of the most trusted names in finance -- to offer you a financial plan built to withstand a variety of market and economic conditions. A Vanguard advisor will craft your customized plan and then manage your savings, giving you more confidence to help you meet your goals. Click here to get started.
