This table presents merchandise trade complementarity index which assesses the suitability of preferential trade agreement between two economies given the structure of one potential partners’ exports match the imports of the other potential partner. Changes over time may indicate whether the trade profiles are becoming more or less compatible.
Source: UNCTAD secretariat calculations, based on UNCTAD, UNCTADstat Merchandise Trade Matrix.
Notes: Formula: Sum of the absolute value of the difference between the import shares and the export shares (as 3-digit SITC, Rev.3) of the countries under study, divided by two.
Sejmk = the index of trade complementarity of exporter j with importer k i = goods in three digit SITC Rev.3 j = exporter (country or country group) k = importer (country or country group) Eij = the share of goods i in country j’s total exports to the world Mik = the share of goods i in country k’s total imports from the world
It has potential values between 0 and 1 with zero indicating that there is no correspondence between country j's export structure and country k's import structure and one indicating a perfect match in the export/import pattern.
The index is calculated for all potential combinations of exporters and importers (including country groups). Hence, it includes the combination of the same exporter and importer. This implies the intra-trade, if exporter and importer are both groups of countries.
High complementarity indices may be misleading if the size difference in the economies is large (i.e., a match in percentage terms does not imply a match in levels).