VISIBLE TRADE AND INVISIBLE TRADE

International trade

Visible trade                                                   Visible trade

(Trade in goods only)                                  (Trade in services only)

Visible                        Visible            Invisible                     Invisible

Exports                       imports           Exports                       imports 

1. Foreign trade involves the export and import of both goods (called visible trade) and services (called invisible trade).

2.    Visible trade involves trading in goods, such as wheat, and it can be divided into:

(a)  Visible exports which involves the sending of goods (raw materials, semi manufactured goods, machinery or other manufactured goods) from the home country for sale abroad by the exporter.

(b)  Visible imports which involves the buying of goods (raw materials, semi manufactured goods, machinery or other manufactured goods) from abroad into the home country.

3.    Invisible trade involves trading in services, something which cannot be seen such as tourism, education services, insurance services, transport services and the like. It can be divided into:

(a)  Invisible exports which occurs when nationals of other countries use the services offered by companies or individuals of the home country. Singapore exports shipping services when foreigners sends goods in ships owned by Singapore nationals.

(b)  Invisible imports which occurs when nationals of the home country use the services provided by foreign individuals or companies owned by foreigners.

Singapore imports education services when Singapore students goes overseas to the UK to study at the British universities.

4. The money which a country earns from her exports, both visible and invisible, will be used to pay for her imports both visible and invisible.