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# Annual Surplus of Gold in Portugal

## Definition

The excess gold produced in Portuguese Brazil that exceeds domestic demand for coin and plate, creating a situation where surplus gold must be exported to find more advantageous markets. This surplus forms the economic basis for the England-Portugal commercial relationship.

## Source Chapter

Book IV, Chapter 6

## Context

Smith uses Portugal's gold surplus as a case study to demonstrate how natural resource endowments shape international trade patterns. The surplus gold from Brazil creates a situation where Portugal must export gold regardless of trade restrictions, making the England-Portugal treaty's preferential terms less significant than mercantilist theory suggests.

## Economic Domain

Exchange

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