How can we understand the complexity of trade data?

September 8, 2016

These days, the amount of data available about anything, anywhere, is growing much faster than our ability to process and really understand it. This is true in many fields, but especially in matters of international trade. Statistics on trade flows are available in over 5,000 product categories for all countries, and even more detail for many. Tariff rates, non-tariff barriers to trade, preferences, rules of origin, and other aspects of trade policy are also defined at this level of detail, and can change over time. Trade agreements have proliferated over the past 25 years, taking away obstacles and creating opportunities, but also generating additional complexity.

 

How can we try to understand all of this information to get a sense of the patterns and trends, design effective, efficient policies, and identify business opportunities to improve the lives of citizens in IDB member countries? The Inter-American Development’s Integration and Trade Sector has developed a collection of interactive data visualization tools in their INTrade information system that let you explore the INTrade databases, graph the data series, and answer questions about trade and integration in the region.

 

The first tool is the Country Profile. Available for each of the Bank’s 26 borrowing member countries in Latin America and the Caribbean (LAC), this tool collects a long list of indicators for each one and displays them together to provide a broad overview of its trade structure, performance, and policies. The country profile identifies top export and import partner countries, top export products, average and peak tariff rates, sectoral trends over time, and also provides a map of trade agreement partners and the importance and degree of liberalization with each of them. Many of the graphs in the profile are interactive, and can be opened separately to further explore the data and indicators behind them.

 

Next (and newest!) is a tool for exploring the latest developments in international trade flows. The Trade Trend Estimates, based on a biannual publication, gives the most up-to-date view of export growth for countries of the region, and drills down to the bilateral trade flows that explain the growth (or contraction) of regional exports. The tool provides both visual maps and a download of the underlying raw data for those who want to study it further.

 

A third visualization tool gives access to the deep database of trade flows of countries in LAC. The Bilateral Trade tool gives a map of exports, imports, and trade balances for each country in the region over the past 20 years. The tool has controls that let you analyze trade patterns and trends for over 5,000 product categories (down to the 6-digit subheading level of the Harmonized System), identifying the key export destinations and sources of imports.

 

Another tool gives a view of Annual Export Growth for each of the past 20 years, with an option to animate the graphs. You can watch as trade grows unevenly in the late 1990s, falters around the Asian crisis in 1998–1999, recovers only to stumble in South America around the Argentine crisis of 2001–2002, and then expands strongly up to the global financial crisis of 2008–2009, after which exports recover only to stagnate and fall back as commodity prices start to collapse in 2012.

 

The Direction of Trade tool maps the principal trading partners of each LAC country and enables an animation of these relationships over time. For example, the rapid growth of exports to China from several countries in South America—and as a source of imports for nearly all countries—stands out in the 2000s. The Trade Balance tool shows the evolution of exports and imports, simultaneously, by sector over the past 23 years. Select a sector by clicking on it to see its contribution to the country's trade balance over time. The Composition by Partner/Sector tool presents a tree-map that combines the analysis of top products and export destinations, or top destinations and what products they buy. You can drill down by clicking on a segment to get more detail on what products or partners drive trade.

 

The last two tools give access to the databases on trade policy. The Trade and Integration Agreements tool maps the different types of agreements, and like several of the previous tools, can be animated to show their proliferation over time. The circles over the countries reflect the number of agreements to which they are signatories, and if you click on one a list of agreements appears. Likewise, clicking on one of the agreements in the list will take you to profile page for that agreement. The tool for Tariff Reduction Schedules takes one aspect of these agreements and summarizes the time frame for the preferential elimination of tariffs, measured by the percentage of products with tariffs fully eliminated each year on bilateral trade, broken down by HS Section. The tool allows you to compare the tariff elimination for different sections within an agreement, or a given sector across agreements for a particular country. Additionally, you can look at tariff preferences granted or received by the selected country.

 

These tools can use the data in INTrade to tell countless stories about the development of regional trade and integration architecture over the past couple of decades. These tools are particularly useful to small and medium size enterprises (SMEs) and less developed countries that do not have the resources or capacity to collect and interpret complex trade data. The INTrade system provides a framework that enables all users to harness the power of trade data; whether that is an SME trying to expand into a new market, a national trade promotion agency trying to exploit the preferences in a new RTA or an analyst trying to assess the trade dynamics of LAC. We invite anybody who is interested to visit and explore this data!

 

Note: An earlier version of this piece was originally posted on Beyond Borders: Integration and Trade, on July 5, 2016

 

***

Jeremy Harris has worked at the IDB for 20 years, serving as an Economist and Integration and Trade Specialist since 2009. At the IDB, he has participated in supporting several trade negotiation processes within Latin America, including the FTAA and the DR-CAFTA, with an emphasis on rules of origin and market access. He also has helped design and develop several databases and information systems focused on market access, and has written on preferential trade agreements and their systemic effects on regional and global trade. Outside the Bank, he has worked as a consultant for the UN-ECLAC, the CARICOM Secretariat, the U.K.’s Department for International Development (DFID), and the German Agency for Technical Cooperation (GTZ). He holds a PhD in Economics from the University of Maryland.

Topics: CAPACITY BUILDING TRADE DATA

Regions: LATIN AMERICA AND THE CARIBBEAN (LAC)

Authors: JEREMY HARRIS

RTA

In Other Blogs

The politics of NAFTA Renegotiations

December 11, 2017

The biggest benefit of trade agreements for most countries may be their ability to ‘lock in’ policy reforms.   Major reforms to significant economic sectors, such as agricultu... READ MORE

RTAs and the Economics of Disintegration

December 7, 2017

The growing appeal of populist messages and doubts about the benefits of globalization materialized into two major developments in 2016: the referendum that led to decision of the United Kingdom to... READ MORE