| by Caitlin Fillmore

News Stories

analysis illustration
(Credit: Illustration created with assistance from OpenAI's DALL·E )

Why would a country without a navy import significant amounts of submarine materials?

This is exactly the kind of puzzle that federal agencies are looking to solve as they monitor global trade. But that requires crunching quite a bit of data.

That’s where Middlebury Institute students come in, leveraging the power of mirror gap analysis.

“It’s a cutting-edge research option,” said public administration and international trade student Felix Naim MPA/MAITED ’25. “It’s a great start to get practical experience in international trade and not just history or theory.”

A mirror gap analysis (MGA) compares one country’s reported cumulative exports and its trading partners’ reported cumulative imports for the same item. These numbers should balance, but as Institute students have found, they often do not—for a variety of reasons.

Gaps can appear innocently, from simple math errors or an accidental misclassification of a product. However, intentional misclassifications may indicate financial crimes, like money laundering, tariff avoidance, or smuggling. 

Combating Global Crime

“The MGA is a powerful investigative tool used by government agencies in combating domestic and international trade-based financial crimes,”  said Warren Small, a practicing attorney who integrates the project into two of his courses on international law at the Institute. “This self-diagnostic tool is used by foreign customs officials to assess the adequacy and effectiveness of their respective customs compliance infrastructure.” 

 

Small, Warren
Attorney Warren Small teaches courses on international law at the Institute.

Analyses developed by Institute students have been delivered to the Department of Homeland Security, the Department of Commerce’s Bureau of Industry and Security, and the Canada Border Services Agency in support of their ongoing investigations. Students have also presented findings and recommendations on customs infrastructure to customs and consular officials from five countries and counting.

“Everyone has a slightly different set of numbers. Things get lost in translation and countries have different priorities for information they put out,” said Emery Armentrout MPA/MAITED ’24. “There’s no magic book with all the actual numbers.”

“In terms of global trade, there are industries more prone to misreporting. We ask questions as to why,” Naim said. 

Driving Positive Trade Growth and Development

Professor Small described an MGA as having both a crimestopper side and a development side. 

Students research the dynamics of each nation they study to understand the barriers behind accurate trade reporting. Sometimes fixing trade data is as simple as helping people fill out paperwork accurately. That in turn can then help the nation attract foreign investment, Small said.

“It’s interesting to look at an MGA and see if this country is doing everything it can to meet its goals, if there are nefarious elements involved or confusion about best practices,” said Armentrout.

His analysis of Vietnam found a trade gap in the mechanical engineering sector. The discrepancy was flat-panel display modules—which can be anything from a cell phone’s screen to the clock display on a microwave.

In this case, it wasn’t fraud or smuggling. It turned out that Vietnam was indeed manufacturing the displays, but their reporting wasn’t accurate.

Small hopes to keep expanding the program and include more of the development aspect. Students are also working with the Anti-Corruption and Governance Center of the Center for International Private Enterprise (CIPE) to develop formal instructions so others can conduct mirror gap analyses.

“We just started working on making MGAs a bigger thing. I’m excited to see how something that was just a format a few years ago could be something much greater,” Armentrout said.

Federal agencies and international businesses are not the only ones to benefit from the initiative—students have, too.

“Everyone who has worked on the MGA has gotten a job with the International Trade Administration. Knowing how to do this project is essentially a guarantee,” said Naim, whose goal is to work in Silicon Valley trade compliance. “Having this technical project is so valuable.”