Potential export value of product k supplied by country i to market j, in dollars, is calculated as supply × demand (corrected for market access) × bilateral ease of trade. Supply and demand are projected into the future based on GDP and population forecasts, demand elasticities and forward-looking tariffs. The estimated dollar value serves as a benchmark for comparison with actual exports and should not be interpreted as a ceiling value. In reality, the actual trade value may be below or above the potential value.The supply side in the export potential indicator is based on the projected market share. As a result, the share of country i’s exports of product k in total exports of product k, multiplied by the exporter’s expected GDP growth rate (relative to expected GDP growth of other exporters of the same product) capture the relative increase in overall supply performance. This indicator is corrected for global tariff advantages of country i in product k: it is meant to capture projected market share, and thus supply performance, in the absence of tariffs (the impact of tariffs on exports to a particular market will be taken into account in the demand component). A filter to remove re-exported products is applied in certain manufacturing sectors.The demand component is based on projected imports, thus market j’s imports of product k, augmented by expected growth of GDP per capita (subject to estimated revenue elasticities of import demand per capita at sector and development level). The indicator also considers the future tariff advantage in the target market and the bilateral distance as compared to the average distance over which the target market usually imports the product.Ease of trade is based on the ratio of actual trade between exporter i and market j for products with potential relative to their hypothetical trade if exporter i had the same share in market j as it has in world markets. The numerator captures the actual trade between the exporter i and market j and the denominator captures trade complementarities between the exporter i and market j. If Ease > 1, country i finds it easier to trade with market j than with world markets on average, augmenting the potential to trade any product with market j. This can reflect in a high numerator, resulting for instance from the two countries being located in proximity, sharing the same language or culture or having established commercial links in the past. It can also reflect in a low denominator due to a limited complementarity of the countries’ export and import baskets. By contrast, if Ease < 1, country i finds it relatively more difficult to trade with market j, lowering its potential to trade with that market across all products.

The value of actual exports is calculated as an arithmetic average of direct and mirror data of reliable reporters over the past five years. See here, for data details or refer to Decreux and Spies (2016). Actual exports to a region, including to the world as a whole, only include exports to markets where the country has export potential. At an aggregate level, actual exports can therefore be equivalent to or lower than export values recorded in other trade databases.This value captures the extent to which the export potential has already been utilized for this product, market or supplier. At the most disaggregated level, by country, product and market, the realized potential corresponds to the potential to actual exports gap (in % terms) whenever potential > actual exports and to 100% whenever potential < actual exports. At the aggregate level (e.g. export potential in a regional market or by sector), the realized potential may be below 100% even though aggregated actual exports exceed potential exports. This occurs when individual exporter-product-market combinations still hold underutilized potential that should not be masked by the fact that others have exceeded their potential.This is the extent to which potential exports deviate from actual exports. Actual exports may be higher or lower than the expected potential value. When actual exports exceed potential exports, this can be driven by an exporter’s exceptional export performance in some markets while neglecting others. Conversely, the untapped potential value signals room for export growth if frictions, for example in the form of regulations or buyer-seller mismatches, can be overcome.