Cross border trade or international trade is the exchange of goods or services between two countries. In ancient times humans relied on barter trade which is exchange of one form of goods with another. However, now the trade between two countries involves foreign exchange. Foreign exchange reserves go low with imports and increase with exports. If a greater amount of goods is exported than the amount of goods imported then the foreign exchange reserves go in surplus and in the opposite case it results in a budget deficit which also affects the balance of trade payments. Trade with foreign countries is preferred when the goods being produced by a country are in surplus. In case of imports however, sometimes imports prove to be cheaper than producing the same goods within one's country.
