Trade Complementarity Research Articles

An Analysis of Bilateral Trade Relation between Turkey and Russia: Challenges and Opportunities of Russia-Ukraine War

Purpose: This study examines Turkey's bilateral trade intercourse with Russia in order to identify potentialities and problems for Turkey caused by the Russia-Ukraine War. Method/Design/Methodology/Approach: In the course of the study, with the help of descriptive statistics and calculations of trade indices such as trade intensity and trade complementarity indices, the current state of Russian-Turkish trade was examined. Afterwards, commodity sectors in which supply is expected to fall due to international companies’ suspension of businesses were identified. Next, the revealed comparative advantage index and its dynamic form were calculated to assess Turkey's potentialities to export commodities of the identified sectors to Russia and to highlight commodities groups where export policy should be improved. Thus, the study considers Russia and Turkey not as competitors, but as partners. Findings: It has been concluded that the countries have tight-connections and, to a certain extent, are dependent on one another. Both Russia and Turkey can benefit from further intensifying bilateral trade and improving partnership in other spheres as well. Originality: There is substantial literature comparing Russia and Turkey with other countries, trade blocks or with each other, mainly these two countries are counterposed from a competition perspective. This article, on the contrary, evaluates how cooperation and bilateral trade can improve the economic situation of both Russia and Turkey.

Research on the Competitiveness and Complementarity of Agricultural Trade between China and the Association of Southeast Asian Nations

Research on the Competitiveness and Complementarity of Agricultural Trade between China and the Association of Southeast Asian Nations

Trade Complementarity and Substitutivity between China and Nigeria in Exports: Evidence from the Data in 1996-2022

This study examined the China and Nigeria’s export relations with a view to determining the mutuality of the trade benefits to both countries. Using data for the period 1996 to 2022 from World Integrated Trade Solution (WITS) database, the paper estimated four distinct measures of trade relations (the revealed comparative advantage index, the trade integration index, the complementarity index and the export similarity index) and then analyzed the effect of trade complementarity and substitutivity on exports of Nigeria and China respectively. Based on the findings, China’s top export destination in sub-Saharan Africa is Nigeria, and one of Nigeria’s top export destinations globally is China. Furthermore, the comparative advantage index showed that China has a comparative advantage in manufactured goods, capital goods, consumer goods, intermediate goods, and mechanical and electrical goods, whereas Nigeria has a comparative advantage in fuels and basic materials. Meanwhile, Nigeria’s trade integration index showed that Nigeria’s trade connections to China are weak, while China’s trade integration index showed that its ties to Nigeria are strong. This implies that China depends less on Nigeria’s exports and that Nigeria is more dependent on China’s exports. In addition, Nigeria’s and China’s export structures differed significantly, but it was determined that these trade links are advantageous to both parties and increased their respective export trade. However, the two countries’ trade rivalry will jeopardize their mutual benefits from trade in addition to sharply lowering the volume of their respective exports.

Asymmetric relations and systemic misperceptions: Why and how Australia and China talk past each other

Caught by conflicts, both Australia and China exhibited confused attitudes towards each other’s motives. For China, despite the common interests of strong economic and trade complementarities, Australia acts as a vassal state of the USA, campaigning against China for no reason. For Canberra, it has been frustrated by China’s ignorance of Australia’s independent position and concerns. This article explores the fundamental cause behind this misperception, arguing that asymmetric relationships lead two countries to put their attention on different levels, generating misinterpretations from both sides. As a great power, China concentrates on worldwide competition with the USA and prioritizes its global strategy while underplaying concerns of Australia. However, in Australia’s agenda, regional security and China’s expansion deepened its anxiety, so its over-attention spotlighted Beijing’s moves in a sensitive scenario. The asymmetry exacerbates each other’s threats. The article provides a systematic explanation of the China–Australia tension and clarifies the mechanism behind asymmetric relations.

Regional trade expansion opportunities in Central and South Asia: exploring trade complementarity, diversification and similarity

Regional trade expansion opportunities in Central and South Asia: exploring trade complementarity, diversification and similarity

A political economy analysis of changes and continuities in Iran–Africa trade relations: a case of South–South dependency?

This paper provides a political economy analysis of the bilateral trade relations and patterns of exchange that existed between Iran and Sub-Saharan Africa (SSA) from 1962 to 2021. The paper contributes to the growing literature on Iran–Africa relations by empirically delineating not just the changes, but also the continuities between Iran and its African trading partners before and after the Iranian Revolution. It also adds nuance to the broader scholarship on South–South cooperation by showing the disparity between the rhetoric of South–South solidarity and reciprocity between Iran and SSA, on one side, and their low and fluctuating trade volumes, on the other. These volumes resulted from historical inertia or path dependency and structural factors, including trade complementarities and geopolitical conditions, more than demographic, cultural, or religious realities. They were also shaped by the agency and decision-making of Iranian and African leaders and officials regarding the extent to economically engage with each other.

Analysis of the competitiveness and complementarity of China-Vietnam bilateral agricultural commodity trade.

Vietnam's agricultural exports to China have remained strong, with the country maintaining its position as the top destination for Agri-products. This article primarily utilizes the Revealed Comparative Advantage (RCA) Index, and Trade Complementarity (TC) index to examine the trade comparative advantage, and the complementary of twenty major agricultural products between China and Vietnam from 2012 to 2021. The study results showed that Vietnam and China frequently exchange agricultural products. Vietnam has more stronger competitiveness than China in terms of agricultural products. China's exports to Vietnam were highly complementary to Vietnam's imports in category 0 whiles Vietnam's exports to China showed strong complementarity with China's imports in category 2. This paper analyzes the complementarity and comparative advantages of agricultural trade between China and Vietnam, and proposes informed suggestions for policy-making to promote agricultural trade between the countries. The proposed suggestions aim to expand agricultural trade between the two countries, reduce the trade imbalance, and achieve mutual benefit and win-win results.

Unlocking Trade Potential: A Stochastic Frontier Gravity Model Analysis of India-Africa Information and Communication Technology (ICT) Goods Trade

This study examines the relatively unexplored domain of Information and Communication Technology (ICT) trade between India and the African Union (AU), applying the Stochastic Frontier Gravity Model (SFGM) to measure the untapped potential and discern factors that impede trade. It points out India’s burgeoning role in global ICT trade, with the AU being an increasingly valuable market due to its digital growth and young population. The research identifies India’s significant comparative advantage in exporting telecommunication equipment, with a Revealed Comparative Advantage of 3.54, strategically enhancing its position in the global marketplace. The research notes the high trade complementarity index of 0.984 in 2021, indicating a strong synergy between India’s export capabilities and the AU’s demand, suggesting a beneficial trade relationship. It acknowledges the shift in Africa’s ICT import partners, highlighting China’s rising influence and the need for India to solidify its market share in Africa strategically. The SFGM’s application to evaluate trade efficiency, considering factors such as GDP, exchange rate, distance, tariff rate, and language, provides insightful conclusions. Positive impacts of GDP, exchange rate, and shared language on bilateral ICT trade are found to be significant. The findings emphasise the importance of strengthening trade ties for economic development and digital transformation in Africa.

Daya Saing Dan Komplementaritas Perdagangan Kayu Indonesia: Kasus Kawasan Asia-Pasifik

Indonesia trades ten groups of wood in the Asia-Pacific region. Many forest industry problems occur during trade. Competition and interdependence in trade are research objectives. The research secondary data source is taken from UN Comtrade 2011-2021 and analyzed using the Export Similarity Index (ESI), Revealed Comparative Advantage (RCA), Trade Complementarity Index (TCI), and Intra-Industry Trade (IIT) methods. The research results show that the wood export trade between Indonesia and competing countries competes weakly with each other in the six partner countries. Indonesia is competitive in the products SITC 245 (fuel wood (excluding wood waste) and wood charcoal), SITC 248 (wood, simply worked, and railway sleepers of wood), SITC 251 (pulp and waste paper), SITC 634 (veneers, plywood, particle board, and other wood, worked, n.e.s.), SITC 635 (wood manufactures, n.e.s.), and SITC 641 (paper and paperboard). On the other hand, Indonesia and partner countries almost complement each other as trading partners in terms of exports and imports of wood. However, the integration of Indonesian wood trade with partner countries is considered weak. Products SITC 248 (wood, simply worked, and railway sleepers of wood), SITC 251 (pulp and waste paper), SITC 641 (paper and paperboard), and SITC 642 (paper and paperboard, cut to size or shape, and articles of paper or paperboard) are several product industries that have led to intra-industry trade. Policy recommendations are to utilize resources optimally, develop the wood processing industry to produce finished wood products, and improve the quality and standards of wood products in accordance with policies in trade cooperation.

Analysis of Malaysia's Export Potential of Palm Oil and Its Products to RCEP Member Countries

This study explores the export potential of the Malaysian palm oil industry to RCEP (Regional Comprehensive Economic Partnership) member countries based on the regional economic framework. The panel data from 2018 to 2022 were analyzed using the Trade Gravity Model, RCA (Revealed Comparative Advantage), and TCI (Trade Complementarity Index) indices. The results categorize the fifteen RCEP member countries into three potential classes based on the type of potential. In addition, it was found that the trade complementarity of RCEP member countries showed a significant positive correlation with the export size of Malaysian palm oil and its products. The study provides insights into the trade pattern of palm oil in the region and provides a valuable reference for future trade policy formulation and industry development and provides a basis for research related to the sustainable development of the Malaysian palm oil industry.

Do Trade Agreements Enhance Bilateral Trade? Focus on India and Sri Lanka

This article examines bilateral trade relations between the two important countries of South Asia, India and Sri Lanka, in light of the South Asian Free Trade Area (SAFTA) and the India–Sri Lanka Free Trade Agreement (ISFTA). The analysis period spans the years 1995 to 2020. The primary analysis found that bilateral trade has been sluggish and that the SAFTA and ISFTA agreements have had no discernible effect on these two countries’ bilateral trade performance. The causes of lackluster trade performance were investigated using the “revealed comparative advantage” and the “trade complementarity” indices. Clear evidence was found demonstrating that the reason for the bilateral trade’s consistent lackluster performance is due to both countries’ lack of revealed comparative advantage in the majority of product groups, followed by export similarity in the product groups where they do have a comparative advantage. The findings also confirm the suspicion of many observers that they are competitors rather than natural trading partners. Although any substantial future increase in their bilateral trade is improbable and fanciful, the paper reflects on methods of strengthening bilateral trade.

Разработка методологии оценки экспортного потенциала и ее апробация на примере Республики Узбекистан

This paper proposes a universal methodology for assessing export potential of different countries. It takes into account both external and internal supply and demand factors. The methodology is based on the assessment of various trade indices, such as the Balassa index, trade complementarity index and export specialization index. In addition to analyzing the export capabilities of countries, the methodology also focuses on analyzing the countries’ presence in foreign markets (through the geographical structure of imports). The presented methodology is complemented by the estimation of output multipliers (based on Input — Output tables). The calculation of output multipliers takes into account additional induced effects resulting from the growth of household and government incomes, which are partly spent on additional consumption. Complementary analysis of trade indices and output multipliers (including induced effects) allows to identify sectors and products that will most stimulate economic growth by increasing exports. The proposed methodology has been tested on data for the Republic of Uzbekistan in terms of intensive margin of trade. The results of the analysis show that the methodology can be used as a basis for preparing export development programs for individual countries. The methodology could be improved by a deeper analysis of foreign trade barriers, domestic supply factors and extensive trade margins. However, up-to-date information on these improvement factors is not always publicly available.

Trade Competition and Complementarity Between USA and One of Its Major Trading Partners in Africa (Nigeria): An Empirical Analysis Using Prominent International Trade Measures

This study investigated the trade complementarity and competitiveness between USA and Nigeria using data from World Integrated Trade Solutions (WITS) database. The study examined the volume and structure of trade between USA and Nigeria, and further adopted prominent international trade measures (Revealed Comparative Advantage index, Trade Integration Index, Complementarity Index and Export Similarity Index) and a modified gravity model. The results revealed that Nigeria is one of USA’s largest export destination in sub-Saharan Africa while USA is one of Nigeria’s largest export destination in the world. In addition, the revealed comparative advantage index revealed that Nigeria has comparative advantage in fuels and raw materials while USA has comparative advantage in manufactured products. Meanwhile, the complementarity index, USA’s trade integration index and Nigeria’s trade integration index, revealed that USA and Nigeria will both gain from trade if they cooperate rather than compete. 
 
 Received: 10 September 2023 / Accepted: 28 October 2023 / Published: 5 November 2023

Analysis of Trade Competitiveness and Complementarity Between China and RCEP Members

This paper makes an in-depth analysis of the development of international trade between China and RCEP members and calculates indexes of different dimensions to discuss the competitiveness and complementarity of trade. The results show that the trade structure between China and RCEP members is gradually changing, and the structure of export trade is constantly optimizing. The export structure of China is comparable to that of other RCEP members, among which capital-intensive and technology-intensive products have the most significant similarity, and trade competition is fierce. China's interdependence with other members is deep and growing. China's trade with the other 14 countries is, on the whole, a competitive and complementary relationship. The signing of the RCEP has brought many opportunities for China as well as many challenges. The research in this paper expands and enriches the research on the potential effect of China's participation in RCEP and provides a reference for the future development direction of China's commodity trade in the context of economic globalization.

Study on the Trade Complementarity among China and CEE Countries

Under the "the Belt and Road" and the "17+1" framework, trade cooperations among China and the Central and Eastern European (CEE)countries have attracted great attention, and which has become the focus of attention to achieve coordinated trade development among China and the CEE countries. The article introduces the current trade situation among China and CEE countries, and reveals that the overall trade situation between the both sides is great. From the perspective of trade complementarity, through the trade integration index and trade complementarity index, it is concluded that there is great potential for the development of trade relations among China and the CEE countries, and there is a certain degree of complementarity in trade exchanges, and suggests some proposals.

International Trade Cooperation between Russia and China under the Belt and Road Initiative in the New Global Order

In the context of the major changes in the international order with the trade friction between China and the United States and the Russian special military operation, the global economic landscape is being reorganized, and the moves of China and Russia, as major countries along the Belt and Road, are going to affct the whole region and the world. The article analyzes the sanctions imposed on China and Russia, using ESI and RCA indices to analyze the complementarity and competitiveness of Sino-Russian trade, and concludes that the two countries have different comparative advantages and complementary economic and trade structures. At the same time, it discusses the cooperation between China and Russia in the Belt and Road Initiative, and employs the arima model to forecast the economic and trade volume between China and Russia, which predicts that the volume of Sino-Russian trade will continue to grow. Finally it deals with the changes in the global order which inflence China and Russia, the Belt and Road cooperation, as well as emergence of new global thinking.

PRIORITIES AND MECHANISMS FOR BALANCING THE FOREIGN TRADE IN AGRICULTURAL PRODUCTS BASED ON COMPLEMENTARITY

The research paper aims at carrying out a systematic analysis of the complementarity of foreign trade in agricultural products and to substantiate on this basis the priorities for the expansion and balancing of Ukrainian agricultural exports at the micro, macro, and mezzo-levels. The concept of complementarity of foreign trade is defined as the level at which the economic systems of different countries are balanced on the basis of mutual complementarity of the commodity structure of export and import and effective participation in the international division of labour. The methodological approaches to the study of complementarity of foreign trade are systematized. The article uses a complex approach to the analysis of foreign trade relations in the agrarian sphere and the extent to which it is balanced. The main trends and features of the development of Ukrainian foreign trade in agricultural products are determined. It was found that the imbalance of the foreign economic sphere in the agricultural sector is manifested in the dominance of export activities of large agricultural holdings, the monocultural nature of agricultural production and export, and ineffective institutional support of small farmers and agrarians. An empirical assessment of the complementarity of Ukrainian foreign trade in agricultural products has been carried out using complementarity indices, indices of revealed comparative advantage, and applying the method of cluster analysis. The conducted calculations proved that the Ukrainian agricultural sector has a significant unused potential for the development of exports on the basis of complementarity. A set of priorities of balancing foreign trade in agricultural products based on complementarity are substantiated, in particular, the following: forming a system for monitoring the complementarity of Ukrainian foreign trade in agricultural products; concluding and comprehensively supporting the implementation of interstate agreements on the development of mutually beneficial trade in complementary products, including on a barter basis; providing support for export development of small and medium-sized enterprises, and for small-scale production; enhancing diversification of the assortment of agricultural exports of Ukraine, especially in the niches of craft and organic products; supporting complementary foreign trade relations at the level of individual regions of Ukraine; providing a strong and efficient consulting support for exporters, giving assistance in the process of finding foreign partners and entering foreign markets.

Assessing the Competitiveness and Complementarity of the Agricultural Products Trade between Korea and CPTPP Countries

Purpose – This paper aims to investigate the competitiveness and complementarity of the agricultural products trade between Korea and Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) countries. The study evaluates the opportunities and challenges that Korea's agricultural sector faces after joining the CPTPP, and suggests strategies to deepen cooperation and expand Korea's agricultural products trade. Design/methodology – To achieve these objectives, we analyze the trade competition and cooperation relationship between Korea and CPTPP countries in the agricultural products trade. This study uses data from Chapters HS1-24 in UN Comtrade from 2012 to 2022, and applies the indices of revealed comparative advantage, export similarity, and trade complementarity to examine the trade dynamics. Furthermore, we use an Autoregressive Integrated Moving Average (ARIMA) model to predict the agricultural products trade complementarity index between Korea and CPTPP countries from 2022 to 2031. Findings – The findings of our analysis reveal that Korea's agricultural products trade competitiveness is weak compared to that of CPTPP countries, and Korea's agricultural products are at a competitive disadvantage. On the whole, the similarity index of agricultural products trade exports between Korea and CPTPP countries is low, the structure of agricultural products export is quite different, and trade competition is relatively moderate. The trade complementarity index between Korea and CPTPP countries is generally high, with strong complementarity and a large space for cooperation and development. The ARIMA model shows that in the next ten years, although the agricultural products trade complementarity index fluctuates, but is generally high, there will still be a complementarity advantage in the future. Originality/value – This study is the first attempt to investigate the competitiveness and complementarity of the agricultural products trade between Korea and CPTPP countries. We also introduce an ARIMA model to forecast and analyze the future agricultural products trade complementarity index. Our study provides new perspectives and solutions for the future development of Korea's agricultural products trade after joining the CPTPP.

Assessing the potential and challenges for trilateral trade integration among Egypt, Sudan, and Ethiopia

ABSTRACT Egypt, Sudan and Ethiopia possess diverse natural resources and a substantial labor force that permit forming a successful trade integration. However, the recent dispute over the Grand Ethiopian Renaissance Dam (GERD) project between Ethiopia and downstream countries, Egypt and Sudan, has weakened the bilateral relations and disrupted trade flows among the three countries. This paper investigates the pattern of trilateral trade between Egypt, Sudan and Ethiopia during the period between 1995 and 2018. The study also examines the prospects and challenges for establishing a trilateral trade integration between the three countries. The study adopted the gravity model approach, along with the export diversification and trade complementarity indices, in order to scrutinize the pattern and structure of trade between the countries under study. The analysis indicated that Egypt is the most diversified economy with many crucial comparative advantages, which may grant it a leader position in the integration. Moreover, the paper revealed many challenges that may hinder the implementation of trilateral trade integration including, export concentration, poor infrastructure and disputes over water resources. Finally, the paper recommends that facilitating bilateral trade among the riparian countries of Eastern Nile Basin would mitigate the complex clashes over water rights.

Digital Services Trade between China and V4 Countries – A Study of Trade Complementarity and Regulatory Restrictiveness

Digital Services Trade between China and V4 Countries – A Study of Trade Complementarity and Regulatory Restrictiveness