Foreign Trade

Foreign Trade, the exchange of goods and services between nations. Goods can be defined as finished products, as intermediate goods used in producing other goods, or as agricultural products and foodstuffs. International trade enables a nation to specialize in those goods it can produce most cheaply and efficiently.

Trade also enables a country to consume more than it would be able to produce if it depended only on its own resources. Finally, trade enlarges the potential market for the goods of a particular economy. Trade has always been the major force behind the economic relations among nations.

The largest trading community in the world began in Europe in 1948 with the founding of the customs union known as Benelux—Belgium, the Netherlands, and Luxembourg. In 1951 France, West Germany, and the Benelux countries formed the European Coal and Steel Community (ECSC).

These nations established the European Economic Community (EEC), often called the Common Market, in 1957. The ECSC, EEC, and other entities merged in 1967 to form the European Community (EC), which was succeeded in 1993 by the European Union.