Sub-Regional Workshop on International Merchandise Trade Statistics Compilation and Export and Import Unit Value Indices 21 – 25 November 2016. Guam Reef & Olive Spa Resort, Tamuning, Guam STATISTICAL TERRITORY AND TRADE SYSTEM Presentation by Nilima Lal Economic Statisticians, Pacific Community Email: NilimaL@spc.int

Statistical territory Statistical territory is the territory with respect to which trade data are being compiled. Customs territory - is the territory in which the customs law of a State applies Elements of statistical territory – (a) Islands; (b) Territorial waters and Continental shelf; (c) Offshore and outer space installations and apparatus; (d) Commercial free zones and Industrial free zones; (e) Customs warehouses; (f) Premises for inward processing; (g) Territorial enclaves of the compiling country in other countries; and Territorial exclaves of other countries in the compiling country. The organization of data collection in respect to different territorial elements requires careful selection of the most appropriate data sources and depends on national circumstances and priorities. Additional data sources may be needed eg: Surveys of free zone operators and Enterprise surveys IMTS 2010: “…The definition of the statistical territory may or may not coincide with the economic territory or its customs territory…”

Trade system Depending on what parts of the economic territory are included in the statistical territory, the trade data-compilation system adopted by a country (its trade system) may be referred to as general or special. 1. The general trade system… …is when the statistical territory coincides with the economic territory and includes all applicable territorial elements. This system provides the most comprehensive record of the goods entering (import) the economic territory of a compiling country and thereby increasing the stock of its material resources, and goods leaving (export) its territory and thus decreasing that stock.

2. The special trade system… Trade System cont… 2. The special trade system… …is in use when the statistical territory comprises only a particular part of the economic territory. Two definitions: strict and relaxed – strict when the statistical territory comprises only the free circulation area relaxed when (a) goods that enter a country for, or leave it after, inward processing and (b) goods that enter or leave an industrial free zone

Limitations of special trade system The use of the special trade system narrows the coverage of the statistics because not all goods that are in the scope of international merchandise trade statistics are covered. its application is not uniform across countries and creates serious incomparability eg some countries may use strict special trade system, while others may adopt the different variants of the relaxed definition lack of territorial coverage and the lack of uniformity in the application of the special trade system has a negative impact on the usefulness of trade data for policy analysis purposes and for the compilation of national accounts and balance of payments statistics.

Recommendation for PICTs It is recommended that countries use the general trade system for the compilation of both their import and export statistics. Countries using special trade system are encouraged to develop plans to introduce the general trade system.