Does Importation Drain The Wealth Of A Nation?

This has long been a fallacy used by mercantilists to advance protectionism which had been demolished by classical economics led by Adam Smith.

In short, the answer is NO.

First, accounting equations does NOT replace the essence of human actions.

Where GDP=private consumption + gross investment + government spending + (exports-imports), the impression derived from exports minus imports is that imports signify a drag to the economy.

This is plain nonsense. Exports and imports are activities of individuals who engage in voluntary exchange. And no one would willingly undertake trade if there are no perceived benefits from it.

And this also applies to people trading with one another from different countries. To quote Professor Don Boudreaux, “Consumers’ nationalities are economically irrelevant.”

Second, trade is NOT a zero sum game.

It is not what Michel de Montaigne (1533–1592) calls as “no profit can possibly be made but at the expense of another” from which Professor Ludwig von Mises calls as the Montaigne fallacy.

Trade is voluntary exchange via division of labour. We trade for the purpose of attaining things or services which we cannot provide to oneself, and in exchange, provide things or services that we have which the others want.

Trade isn’t mechanistic. It arises from individual choices and preferences.

Third, money should NEVER be confused with wealth.

As Adam Smith in the Wealth of Nations wrote, (bold emphasis mine)

Some of the best English writers upon commerce set out with observing that the wealth of a country consists, not in its gold and silver only, but in its lands, houses, and consumable goods of all different kinds. In the course of their reasonings, however, the lands, houses, and consumable goods seem to slip out of their memory, and the strain of their argument frequently supposes that all wealth consists in gold and silver, and that to multiply those metals is the great object of national industry and commerce.

Exactly. This especially for people who argue from the basis of their political religion.

And the principal aim of trade isn’t to accumulate money, but to benefit from the exchange of goods and services.

Again Adam Smith,

The importation of gold and silver is not the principal, much less the sole benefit which a nation derives from its foreign trade. Between whatever places foreign trade is carried on, they all of them derive two distinct benefits from it. It carries out that surplus part of the produce of their land and labour for which there is no demand among them, and brings back in return for it something else for which there is a demand. It gives a value to their superfluities, by exchanging them for something else, which may satisfy a part of their wants, and increase their enjoyments.

Fourth, money in a free market is self-regulating and that interventionism will NOT prevent outflows...

Again Adam Smith,

The quantity of every commodity which human industry can either purchase or produce naturally regulates itself in every country according to the effectual demand, or according to the demand of those who are willing to pay the whole rent, labour, and profits which must be paid in order to prepare and bring it to market. But no commodities regulate themselves more easily or more exactly according to this effectual demand than gold and silver; because, on account of the small bulk and great value of those metals, no commodities can be more easily transported from one place to another, from the places where they are cheap to those where they are dear, from the places where they exceed to those where they fall short of this effectual demand...

When the quantity of gold and silver imported into any country exceeds the effectual demand, no vigilance of government can prevent their exportation.

Finally those who preach mercantilism DO NOT argue for the benefit of the entire society but argue for the interest of a select few.

According to Jacob Viner in the Studies in the Theory of International Trade [1937]

The mercantilist literature, on the other hand, consisted in the main of writings by or on behalf of “merchants” or businessmen, who had the usual capacity for identifying their own with the national welfare. Disinterested exposition of trade doctrine was by no means totally absent from the mercantilist literature, and in the eighteenth century many of the tracts were written to serve party rather than self. But the great bulk of the mercantilist literature consisted of tracts which were partly or wholly, frankly or disguisedly, special pleas for special economic interests. Freedom for themselves, restrictions for others, such was the essence of the usual program of legislation of the mercantilist tracts of merchant authorship.

Restricting trade is a way to impoverishment.