Balance of Trade Surplus Law and Legal Definition

Balance of Trade Surplus is an imbalance in a nation's balance of trade in which the payments for merchandise exports received by the country exceed payments for merchandise imports paid by the country. This is also termed a favorable balance of trade. It is considered favorable because more goods are exported out of the country than are imported in, meaning that foreign production is replaced with domestic production, which then increases domestic employment and income. A balance of trade surplus is often the source of a balance of payments surplus.