Trade is the exchange of goods and services between countries.

Goods, e.g. raw materials, food and manufactured products are called visible trade.

Services, e.g. money spent by tourists, or foreign aid, are called invisible trade.

Many LEDC’s export primary products.

These include things like oil, cotton, iron, bananas, coffee and cocoa. MEDC’s export a greater number and range of secondary products.

These are often manufactured goods which are made from primary products from LEDC’s.

Over 50% of trade takes place between MEDC countries, for example, the trading of cars to provide everybody with a greater choice.

Less trading happens between LEDC’s as most of the LEDC’s produce the same products.

Rich countries in North America, especially the USA, and countries in free trade areas, such as the EU, dominate world trade.