Economic complexity and upcycling potential in the international waste trade

This study examines the role of waste trade in export diversification and upcycling opportunities. Its objective is to identify waste-adjacent products within the export basket and analyze their attributes within the product space network. However, the literature suggests that the link between the circular economy and international trade, analyzed from an economic complexity perspective, remains largely unexplored; consequently, there is an empirical gap that calls for analyzing the circular economy from a global perspective in order to promote and scale it. The methodology is structured in three stages: first, the estimation of economic complexity metrics using international trade data; second, the mapping of the product space network to identify products linked to waste; and third, a qualitative and documentary assessment of the upcycling potential of waste products. The results reveal a paradox in the waste sector: it is accessible to countries across different income levels, yet it is generally characterized by relatively low levels of economic complexity and sophistication. At the same time, the sector spans a wide range of capabilities related to waste management. These findings suggest that the waste sector should not be evaluated solely in terms of economic complexity, as this could underestimate its strategic relevance; rather, it should also be evaluated based on its upcycling potential within the circular economy. This study integrates economic complexity metrics with a documentary analysis that makes it possible to view circular products not only as waste, but also as inputs capable of driving both export diversification and the transition toward circular economy models through upcycling.