Geoeconomic Connectivity Index – user guide

What is the Geoeconomic Connectivity Index?

The Geoeconomic Connectivity Index measures the extent to which a country is economically linked and integrated into global markets through its trade activity and its structural embeddedness in global trade relationships.

Rather than relying on a single indicator, the index brings together four components that capture both policy-based and outcome-based dimensions of trade connectivity:

・Applied MFN Tariff
・Trade Openness
・Number of Active FTAs and PTAs
・Tariff Trend

Taken together, these indicators provide an overview of how structurally open, institutionally connected, and effectively accessible a country’s trade regime is.

Traditional measures such as trade dependency focus on the scale of trade flows—for example, the share of exports or imports in GDP—and primarily capture exposure to trade. By contrast, the Geoeconomic Connectivity Index captures how trade relationships are structured, incorporating tariffs, institutional agreements, and trade intensity to reflect how market access is organized and mediated.

How the index can help

The trade connectivity index is designed for those in the public or private sectors interested in changes in trade openness, institutional trade integration, and the broader structure of market access.

Trade connectivity is not only a question of volume. It also reflects how market access is structured, how open a trade regime is under multilateral rules, and how far access is mediated through institutional arrangements such as free trade agreements.

The Geoeconomic Connectivity Index is designed to help users compare countries consistently across these dimensions, offering a clearer picture of how countries are embedded in global trade networks, while also capturing recent directional changes in trade policy.

How to use the index

The index can be used in several ways.

・It allows users to compare countries across a common framework of trade connectivity.
・It helps distinguish between different components of connectivity, including baseline tariff openness, realized trade integration, and institutionalized market access through FTAs and PTAs.
・It incorporates tariff trends as a bounded adjustment, allowing recent shifts in trade policy direction to be reflected without overwhelming the structural features of the index.

The maps and sub-indices are intended to provide multiple entry points for interpretation. Users may begin with the overall index and then examine the individual components to better understand what is driving a country’s position.

Key Concept: Geoeconomic Indispensability

A central interpretive concept behind the index is geoeconomic indispensability. This refers to the extent to which access to a country’s market is structurally valuable and difficult to substitute, based on how costly, policy-mediated, and institutionally conditioned that access is.

From this perspective, countries that are highly connected are not simply open. In some cases, access to their markets may be increasingly mediated through agreements, institutions, or selective policy structures that make that access more valuable and harder to replace, or even becoming a critical node in global economic relations

The index therefore does not only provide a picture of trade connectivity. It also helps illuminate differences in long-run trade embeddedness and the conditions under which market access may become more strategically significant.

Key Concept: Strategic Selectivity

The index also includes complementary indicators of strategic selectivity.

While the Geoeconomic Connectivity Index captures the overall structural embeddedness of countries in global trade, it does not by itself reflect sectoral differentiation in market access. In practice, however, trade policy is often selective, especially in sectors considered economically or geopolitically strategic.

To capture this dimension, the analysis includes additional indicators based on tariff peaks and tariff deviations from national averages within predefined strategic sectors. These indicators help show the extent to which countries concentrate trade restrictiveness in specific sectors, even when their overall trade connectivity remains high.

Strategic selectivity should therefore be considered as a lens for interpretation rather than a core pillar of the Geoeconomic Connectivity Index itself.

Strategic sectors covered

The strategic selectivity section focuses on five broad sector groups:

・Advanced Digital Technologies
・Critical Raw Materials
・Energy and Climate Technologies
・Health and Biotechnology
・Advanced Industrial Manufacturing

These sectors are treated as strategic because they share features such as systemic importance in value chains, low short-term substitutability, high entry barriers, supply concentration, and strong technological spillovers.

Interpreting the results

Variation in the final index should be interpreted primarily as reflecting differences in long-run trade embeddedness. Recent tariff liberalization or tightening introduces directional variation, but only as a bounded adjustment.

For this reason, the overall index is best read together with its sub-indices. The component scores help clarify whether a country’s position is driven more by baseline trade openness, actual integration into global trade flows, institutionalized connectivity through agreements, or recent changes in tariff policy.

The strategic selectivity indicators provide an additional perspective by showing whether strategic sectors are protected at levels above or below the national average.

Methodology and further details

For users interested in the theoretical foundations and methodology of the index, additional materials are available via the PDF file below or on a separate page. These explain the construction of the sub-indices, the standardization of variables, the interpretation of each component, and the methodology used for the strategic selectivity indicators.