Balance of trade or net exports, is defined as "the sum of the money gained by a given economy by selling imports, minus the costs of buying imports." Hence, when the exports exceed the imports, there is a positive balance of trade known as a trade surplus. On the contrary, when the imports exceed the exports, there is a negative balance of trade know as a trade deficit. Trade surplus or trade deficit is affected by the following components: "prices of goods manufactured; exchange rates; trade agreements or barriers; other tax, tariff and trade measures." (Wikepedia).

             The balance of trade comprises Balance of Payments, where it is defined as "a measure of the payments that flow into and out from a particular country and to other countries." Hence, when a money inflow exceeds money outflow, the country has a positive balance of payment. On the contrary, when the money outflow exceeds the money inflow, the country has a negative balance of payment. Exports and increase of foreigned-owned assets in the country are factors that determine money inflow while imports and increases of owned assets abroad are factors that determine money outflow. (Wikipedia).

             Furthermore, balance of payment can be divided into three catergories: "(1) current account coming from trade in goods and services and transfer payments made from abroad; capital account coming from purchases and sales of assets such as stocks, bonds, and land; (3) foreign reserves coming from reserve account such as gold, foreign and exchanges." (Wikipedia).

             Given the above facts, there sometimes are issues in the public that when a country is on surplus, it is on the winning end. And when a country is on deficit, it is on the losing end.

             In a testimony made by Griswold, he stated the some negative implications of trade surplus in certain countries. He said that: "In Mexico in 1995 and more recently in South Korea and other East Asian countries, trade balances flipped overnight from deficit to surplus because of plunging domestic demand and the flight of foreign capital.