Trade Complementarity Index

The trade complementarity (TC) index can provide useful information on prospects for intraregional trade in that it shows how well the structures of a country’s imports and exports match. It also has the attraction that its values for countries considering the formation of a regional trade agreement can be compared with others that have formed or tried to form similar arrangements. The TC between countries k and j is defined as:

TC_ij = 100 – sum(|m_ik – x_ij| / 2)

Where x_ij is the share of good i in global exports of country j and m_ik is the share of good i in all imports of country k. The index is zero when no goods are exported by one country or imported by the other and 100 when the export and import shares exactly match.

source : World Bank

Example : Complementarity Indices for East Asian Trade

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