Tradeflow Study - UNDP Black Sea Trade and Investment Promotion ...

It is interesting to note that a number of countries in the region tend to import products for
which a different country in the region is an exporter, indicating some trade complementarity
between countries in BSEC. A number of indicators exist to test the complementarity between
countries, as well as to test how intensively the countries trade amongst each other and test
the overall opportunities for not only exchange different goods but also goods within a similar
industry (called intra-industry trade). The chapter therefore proceeds to provide an overview
of key indicators for identifying trade complementarity and opportunities across the region.
II.1.1 Trade complementarity between BSEC Member States
The trade complementarity index (TC) between the BSEC countries highlights how well the
structures of one country’s imports and matches another country’s exports. The TC between
countries k and j is defined as follows:
TC
ij
1
m
ik
x
2
ij
Where m ik is the share of good i in all imports of country k from BSEC and x ij is the share of
good i in global exports of country j to BSEC. The index is zero percent when no goods are
exported by one country or imported by the other and 100 percent when the export and import
shares of each country exactly match 6 .
Table 6 displays the TC index between all countries of the BSEC region. It can be read
horizontally or vertically. Horizontally (reading from each row), the value for the TC is the
share of imports of a country relative to the exports of another country. Vertically (reading
from each column), the value of the TC is given for the share of exports of a country that
matches with imports of another country.
The TC index reveals that Ukraine’s imports match very closely the exports of Russia (85%).
Similarly, the imports of Russia match relatively well the exports from the Ukraine (75%).
Greece’s exports are a close match with Bulgaria’s imports (70%). However, only Bulgaria
exports of goods do not correlate closely with the import demand from Greece (44%).
6 It should be remembered that the indicator is static and only represent current trade
complementarity as opposed to possible future complementarity
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