Freedom to Trade Internationally calculates the ranking based on Tariffs, Regulatory Trade Barriers, Black-market Exchange Rates, and Controls of the Movement of Capital and People.
Tariffs is calculated based on Revenue from trade taxes (% of trade sector) and Mean tariff rate (unweighted mean of tariff rates) using data from International Monetary Fund, Government Finance Statistics Yearbook and World Tariff Profiles from World Trade Organization.
Regulatory Trade Barriers is calculated based on Non-tariff trade barriers using data from the Global Competitiveness Report and Compliance costs of importing and exporting using World Bank’s Doing Business data on the time (i.e., non-money) cost of procedures required to import a full 20-foot container of dry goods that contains no hazardous or military items. Countries where it takes longer to import and export are given lower ratings.
Black-market Exchange Rates is calculated based on the percentage difference between the official and the parallel (black) market exchange rates using data from MRI Bankers’ Guide to Foreign Currency.
Controls of the Movement of Capital and People is calculated based on Foreign ownership/investment restrictions using data from following two Global Competitiveness Report questions: “How prevalent is foreign ownership of companies in your country?”; and “How restrictive are regulations in your country relating to international capital flows?”, Capital controls using data from the International Monetary Fund reports on up to 13 types of international capital controls and Freedom of foreigners to visit which measures the percentage of countries for which this country requires a visa from foreign visitors.