Internal Trade could render an Export value of a nation valueless if not properly handled. A situation where a goods that was initially imported from Country 1 into a Country 2 has more value in Country 2 than its initial export value from Country 1, could lead to a situation where the purchasing power would be used to buy more goods in quantity from Country 2 who ordinarily would have had a Trade Surplus by virtue of exporting more in the value of the sum of the initially imported goods from Country 1 thereby making the latter to suffer more in export by adding more value to the Economy of Country 1 that exported ab-initio. The customhouse would say that the value of imports exceeded that of exports and was Trade Deficit against the ledger of Country 1. But in the real sense of it, Country 1 has benefited Trade-wise which is a profit to the Economy. In the light of this, a fundamental question arises, ‘would the concept of Profit now be smeared or undermined on the Alter of the concept of Trade Surplus or loss? This brings to Mind why Milton Friedman stated ‘that some of the concerns of Trade Deficit are unfair criticisms in an attempt to push macro- Economic policies favourable to exporting industries’. i.e. to give an undue favour or Advantage to the exporting nations to make it seem that it is more viable than the less exporting Country in the international Business books of accounts. This could be seen as a cosmetic disclosure as it does not actually state the proper position of things and this could be misleading in nature.
By reduction and absurdum, Bastiat argued that the national Trade Deficit was an indicator of a successful Economy, rather than a failing one. Bastiat predicted that a successful, growing Economy would result in greater Trade Deficits, and an unsuccessful, shrinking Economy would result in lower Trade Deficits. This was later, in the 20th century, affirmed by economist Milton Friedman.