This tool provides a set of indicators to measure a country’s trade openness as well as basic descriptive and performance indicators related specifically to manufacturing trade. This tool’s indicators shed light on a country’s trade basket, its main trading partners, as well as the goods the country has a comparative advantage in. Tools 3 and 4 partially build on the aspects discussed in this tool. Tool 2 evaluates a country’s performance and its industry in terms of global trade integration. Performance in this context encompasses a country’s level of global integration and the structure of its trade. The tool thereby determines the country’s global competitiveness as well as that of its various sub-sectors, based on the composition or structure of its exports. On the import side, the tool provides information about the structure and geographical sources of different types of imports. This information can be used to identify areas where the country and its sub-sectors lack productive capabilities, based on factors such as the composition of its import structure. The approach used to assess a country’s performance entails a comparison with relevant comparator countries, either through a pre-selection of comparator countries or through indicators such as revealed comparative advantage (RCA), which are constructed relative to a specific benchmark (usually world shares).
By focusing on diagnostics, the tool takes a first step towards identifying policy areas that require attention. For example, if a country with similar fundamental characteristics or endowments can export a greater share of its products to rich world markets, it may indicate untapped opportunities for laggard countries. Targeted policies may be necessary to capitalize on these opportunities.