Physical Balance of Trade
Monetary balance of trade is different from physical balance of trade (which is expressed in amount of raw materials, known also as Total Material Consumption). Developed countries usually import a lot of primary raw materials from developing countries at low prices. Often, these materials are then converted into finished products, and a significant amount of value is added. Although for instance the EU (as well as many other developed countries) has a balanced monetary balance of trade, its physical trade balance (especially with developing countries) is negative, meaning that a lot less material is exported than imported. For this reason, activists talk about the issue of ecological debt which implies a sort of predatory economic system. The nature of the trade balance statistics is such that it conceals distorted material flow.
Read more about this topic: Balance Of Trade
Famous quotes containing the words physical, balance and/or trade:
“I became the Incredible Shrinking Mother the year they started junior high. If our relationship today depended on physical clout, I would have about the same influence with them that the republic of Liechtenstein has on world politics.”
—Mary Kay Blakely (20th century)
“We must introduce a new balance in the relationship between the individual and the government—a balance that favors greater individual freedom and self-reliance.”
—Gerald R. Ford (b. 1913)
“You know that fiction, prose rather, is possibly the roughest trade of all in writing. You do not have the reference, the old important reference. You have the sheet of blank paper, the pencil, and the obligation to invent truer than things can be true. You have to take what is not palpable and make it completely palpable and also have it seem normal and so that it can become a part of experience of the person who reads it.”
—Ernest Hemingway (1899–1961)