Specialization

Imagine you’re living in Iceland. It’s a country with a harsch and cold climate and you can’t really grow much in the soils there. Now lets say you really want some exotic fruits, so you head down to the store to buy some. Are those fruits grown in Iceland you think?

With modern agricultural techniques and growing it in a greenhouse you could probably manage to grow the fruits in Iceland, but I’d be willing to bet it’s easier and cheaper to grow them in a country much closer to the equator. This is why foreign goods can be imporant for countries. Different nations have different assets for production which make them more suitable for said production of different goods. The reason why so many goods are mass-produced in China for example is because they have cheap labour (which itself stems from their economic situation and business-friendly worker laws) as well as the competence amongst its workforce to make it possible. A company could produce its’ products in a western country but then the cost of labour would be higher, and it could also place production in a country with even cheaper labour but then the competence and infrastructure is not there making it less efficient in the end.

You could sum up why foreign goods are important for a country with a simple sentence: you give and you take. You sell what you have favourable conditions for producing and you buy what other countries can produce cheaper.