INTERNATIONAL TRADE INDICATORS

Definition:

The intra-regional import share of a country refers to the proportion of a country’s total imports that come from other countries within the same geographic or economic region. It is typically used to assess the extent of trade integration within a specific region, such as the European Union, ASEAN, or the African Union.

Significance:

• Trade Integration Measurement: Intra-regional import share helps to assess how well countries within a region trade with one another, indicating the level of economic integration.
• Regional Economic Dependency: A higher intra-regional import share suggests that a country relies more on regional partners for its imports, which can imply deeper economic ties and interdependence.
• Trade Policy Evaluation: It can be used to evaluate the effectiveness of regional trade agreements (RTAs), customs unions, and free trade areas (FTAs).
• Economic Development: Higher intra-regional trade can foster regional economic development through stronger supply chains, reducing transaction costs, and promoting economies of scale.

Formula:

The Intra-Regional Import Share is calculated by dividing the intra-regional imports of a country over its total imports multiplied by 100.

Where:

• Intra-Regional Imports refers to the total value of goods and services that Country A imports from countries within a specific region.
• Total Imports refers to the total value of goods and services that Country A imports from the world.

Interpretation:

• High Intra-Regional Import Share: This indicates that the country imports a significant portion of its goods from within the region. It reflects strong regional integration, possibly driven by regional trade agreements, shared cultural or geographical factors, or regional supply chains.
• Low Intra-Regional Import Share: This suggests that the country relies more on extra-regional imports, indicating weaker regional integration or stronger global trade ties. It may also reflect a lack of competitiveness among regional producers or barriers to intra-regional trade.

Range 

The range of intra-regional import shares, similar to intra-regional trade shares, is expressed as a percentage and can fall between:

• 0%: This indicates that a country imports none of its goods from within its region, meaning all imports come from countries outside the region.
• 100%: This indicates that all of the country’s imports come exclusively from countries within the same region.

Limitations:

• Regional Size and Diversity: Intra-regional import shares may be biased by the size of the region. Larger regions with more diverse economies tend to have higher intra-regional trade, while smaller regions may have fewer trading opportunities.
• Trade Policy Factors: Protectionist policies, tariffs, or non-tariff barriers can distort the level of intra-regional imports, making the share less reflective of actual trade potential.
• Industry Specialization: If a region lacks specialization in industries that a country imports from, the intra-regional import share may naturally be low, even if the country is integrated in other areas.
• Global Trade Dynamics: Changes in global trade conditions, such as shifts in supply chains or global trade agreements, can affect the level of intra-regional trade, making this measure volatile.
• Geopolitical Factors: Conflicts, political instability, or diplomatic relations between countries in a region can disrupt trade and influence intra-regional import shares.