Balanced Trade

Balanced trade can be defined as an economical situation where the economy or the trade runs in balance. In a balanced trade scenario the economy neither runs in a trade deficit nor does it enjoy a trade surplus. Balanced trade is a kind of trade scenario that is maintained between different trading countries. Countries that are operating through as a balanced trade scenario agree upon the condition that each country has to buy the equal number of goods as it sells to and from the other country. A country if it is looking for the balanced trade economy may have to use a number of tactics such as it have to introduce tariffs or it has to apply some kind of barriers to make sure that the other country also buys its products as well.

A balanced trade scenario is somewhat different from free trade scenario as in this kind of trade the countries involved in the trade use their all resources, infrastructure and operations to sell as many goods to the other countries as they have bought from the same country. In other words this can be explained that the countries sell or buy as many goods from each other as the demand and supply of those particular goods allow them. Those countries enlisted in World Trade Organization feel difficult in obtaining the scenario of balanced trade as the World Trade Organization being an International Trade Organization limit the use of tariff and trade barriers while conducting trade.



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