Question

Suppose a country has an overall balance of trade so that exports of goods and services equal imports of goods and services. Does that imply that the country has balanced trade with each of its trading partners?

Short answer

A country's total trade balance does not always suggest that it has a balanced trade with every one of its trade agreements.

Step-by-step solution

Concept of balance trade and international trade.

Balance of trade: The differential here between the number of a country's commodities and services in a particular year is known as the trade balance.

International trade: International trade is the cross-border trade of commodities and services.

Step 2:  Explanation of solution.

The discrepancy between the number of a country's imports and exports of goods and services in a particular year is known as the balance of trade. If a nation has extremely balanced trade, that could

be because it has a favorable trade balance (exports$>$imports) with some trade agreements, which is offset by an unfavorable trade balance (imports$>$exports) with others.

As a result, a country's total trade balance does not always suggest that it has equal commerce with every one of its trade agreements.