Invisible Trade
Categories: Trading
When you imagine international commerce, you probably picture what could be called "visible trade." Giant tankers filled with oil moving in and out of ports. Shipping containers filled with cell phones and studded leather collars made in China arriving in the U.S. for happy American consumers to buy.
However, not all commerce fits this paradigm.
Example:
You license the rights to a popular French novel to make a movie out of it in Hollywood. No physical object has changed hands. You've just purchased the rights to intellectual property. Basically, you traded money for the opportunity to use an idea.
That situation falls under the category of invisible trade. The term refers to commerce between countries involving non-physical goods. So...exports and imports that don't involve actual stuff. It involves intangible assets, like intellectual property or patents.
It also involves services. You call Verizon customer service because the cell service in Butte, Montana, keeps dropping out. You start talking to a customer service rep in India. That counts as invisible trade.
Income from foreign investments (the interest you're earning on those Peruvian bonds you purchased) also falls into the invisible trade category.