Complementarity
Topic: International Trade: Patterns, Ports and the WTO · NCERT: Class 12, Ch 8 "International Trade"
Meaning
Complementarity means one place has a surplus of something that another place wants. Their products then fit together like two halves, and trade between them follows naturally. It is a basic condition for trade, along with transferability (goods can be moved at a bearable cost and time) and comparative advantage. Trade stays weak where two regions make similar goods, as on the South Atlantic route between Brazil and South Africa.
Example
The Gulf countries have far more oil than they need. India needs much more oil than it produces. So oil flows from the Gulf to India, and Indian goods go back.
Don't confuse with
- Comparative advantage: this is about each country making the goods it gives up least to produce. Complementarity is simply about one place's surplus matching another place's need.