International Trade Glossary

Definitions for 37 terms used in international trade — HS classification, valuation rules (FOB / CIF), mirror reconciliation, common indices like RCA, and the institutions that publish trade data.

Data scope

What is and isn't in the dataset.

Merchandise trade: Trade in physical goods that cross customs borders. Excludes services, intellectual property licensing, and digital goods. CEPII BACI covers merchandise trade only.
Services trade: Cross-border trade in services such as travel, transport, financial services, IT, and royalties. Reported separately from goods, typically by the IMF and WTO. World Trade Flows does not currently include services.

Trade mechanics

How trade actually works in practice.

Bilateral trade(country-to-country trade): The trade in goods (and sometimes services) between exactly two countries.
Multilateral trade: Trade flows considered across more than two countries simultaneously, often within a regional bloc or under WTO rules.
Re-exports: Goods imported into a country and then exported in the same form, without significant transformation. Inflates trade volumes for hub economies like Hong Kong, Singapore, and the Netherlands.
Entrepôt trade: Trade through a hub port or warehouse where goods are stored and re-exported. Common in Singapore, Hong Kong, the Netherlands (Rotterdam), and the UAE.
Transit trade: Goods that pass through a country en route to a third country, without entering the local market.
Tariff: A tax on imported goods, usually expressed as a percentage of value (ad valorem) or a fixed amount per unit. Used to protect domestic producers or raise revenue.
Quota: A quantity limit on how much of a particular good can be imported or exported in a given period. Often combined with tariffs (tariff-rate quotas).
Free trade agreement (FTA)(FTA): A treaty between two or more countries that reduces or eliminates tariffs, quotas, and other trade barriers. Examples: USMCA, EU single market, RCEP, ASEAN.
Most-favoured-nation (MFN)(MFN, normal trade relations): A WTO principle requiring members to grant any trade concession given to one country to all other members equally, except within registered FTAs.
Rules of origin: Criteria determining the country of origin of a product, used to apply tariffs, FTAs, and trade remedies. A car assembled in Mexico from US-made parts may be classified differently depending on origin rules.
Global value chain (GVC)(GVC): Cross-border production network where stages of manufacture occur in different countries (e.g. design in the US, components in Korea, assembly in Vietnam, sale in Europe).

Product classification

How goods are coded for trade statistics.

HS code(Harmonized System code, HS6): Harmonized System code — a 6-digit international classification for traded goods, governed by the World Customs Organization. The first 2 digits = chapter, 4 digits = heading, 6 digits = subheading.
HS chapter (HS2)(HS chapter): The first two digits of the Harmonized System code, identifying a broad chapter (e.g. 27 = mineral fuels, 87 = vehicles).
HS6 subheading: The full 6-digit Harmonized System code identifying a specific product line (e.g. 870323 = passenger cars 1500–3000cc).
SITC: Standard International Trade Classification — a UN-maintained product classification used in some economic research alongside or instead of HS. Less common in modern customs data.

Measurement

Indices, ratios, and accounting concepts.

Mirror trade statistics: Comparing one country's reported exports to a partner against the partner's reported imports from the same country. CEPII BACI reconciles the two using a weighted estimator.
Trade balance: A country's exports minus its imports. Positive is a surplus; negative is a deficit.
Trade surplus: Exports exceed imports. The country sells more goods abroad than it buys.
Trade deficit: Imports exceed exports. The country buys more goods from abroad than it sells.
FOB(Free On Board): Free On Board — a valuation rule for exports. Includes the cost of goods up to the point of loading at the exporter's port; excludes international freight and insurance.
CIF(Cost, Insurance and Freight): Cost, Insurance and Freight — a valuation rule for imports that includes the cost of goods plus international shipping and insurance.
Current account: Balance of payments component covering goods, services, primary income (wages and investment income), and secondary income (transfers). Trade balance is one part of the current account.
Balance of payments: A country's accounting record of all economic transactions with the rest of the world, split into current account and capital/financial account.
Terms of trade: The ratio of a country's export prices to its import prices. Rising terms of trade mean exports are getting more valuable relative to imports.
Trade in value-added (TiVA): Decomposes gross trade flows into the value contributed by each country in a global value chain. An iPhone exported from China contains components from many countries; TiVA reveals that.
Revealed comparative advantage (RCA)(RCA, Balassa index): An index of how specialized a country is in exporting a particular product, relative to that product's share of world trade. RCA > 1 means above-average specialization.
Export concentration: How dependent a country is on a small number of products or markets for its export earnings. High concentration = vulnerable to shocks. Often measured with a Herfindahl-Hirschman Index.
Product space: A network of products where proximity reflects how often countries export them together. Used to predict which new products a country could plausibly start exporting.
Economic Complexity Index (ECI)(ECI): A ranking of countries by the diversity and sophistication of their export portfolios. Developed by Hidalgo and Hausmann at Harvard's Growth Lab.

Institutions & sources

Who publishes what.

BACI(CEPII BACI): CEPII's reconciled bilateral trade dataset, the primary source behind World Trade Flows. Covers ~226 countries from 1995 to the most recent year, at HS6 detail.
CEPII: Centre d'Études Prospectives et d'Informations Internationales, a French research institute on international economics. Publishes BACI and other trade datasets.
UN Comtrade(UN Comtrade, Comtrade Plus): United Nations Commodity Trade Statistics Database — the world's largest repository of customs declarations. Member states submit annual figures; CEPII BACI is built from these submissions.
WTO: World Trade Organization — the multilateral institution that administers global trade rules and dispute settlement. Successor to GATT (1995).
WCO: World Customs Organization — maintains the Harmonized System (HS) and standardizes customs procedures across 184 member countries.
IMF: International Monetary Fund — publishes balance-of-payments and trade-related statistics, particularly for services and current account analysis.