Item 7: Imports and Exports ESTP course on National Accounts ESA 2010 Luxembourg, 30 May – 03 June 2016 Eurostat

Imports and exports Goods and services account Purpose: close the recording system Case of supply/use tables

Goods & Services account (SUT) SUPPLY OF GOODS & SERVICES: Output + Trade margin + Transport margin + (Taxes-Subsidies on products) + Imports USE OF GOODS & SERVICES: Intermediate consumption + Final consumption + GFCF + Changes in inventories + Exports

Definition Imports of goods and services consist of transactions in goods and services (purchases, barters, gifts or grants) from non-residents to residents (ESA 2010 § 3.159) Exports of goods and services consist of transactions in goods and services (sales, barters, gifts or grants) from residents to non-residents (ESA 2010 § 3.158) Transaction => change of economic ownership

Concept of residency The total economy is defined in terms of resident units A unit is a resident unit of a country when it has a centre of predominant economic interest on the economic territory of that country That is, when it engages for an extended period (one year or more) in economic activities on this territory (ESA 2010-§1.61)

Centre of predominant economic interest A location (e.g. land or building) within the economic territory From which economic activities are engaged producing, financing, insuring, redistributing consuming owning land or buildings Over a period of at least one year

Economic territory Geographic territory, administered by a government, within which persons, goods, services and capital can move freely Also included are for example: national air-space territorial enclaves (e.g. embassies, military bases, etc.) territorial waters part of the continental shelf (North Sea)

Economic territory

A relative (area-specific) concept Country (ESA, SNA) Regional economic areas (e.g. Euro area, European Union, ASEAN etc…) World Non additivity of imports/exports Additivity of balances (in theory)

Imports and exports exclude: Income flows (e.g. compensation of employees, interest and revenues from FDI) Sale or purchase of financial assets, non-produced assets (such as land)

Imports/Exports of goods; Definition (1) Imports and exports of goods occur when economic ownership of goods changes between residents and non-residents This applies irrespective of corresponding physical movements of goods across frontiers

Imports/Exports of goods; Definition (2) For deliveries between affiliated enterprises (branch or subsidiary, or foreign affiliate): a change of economic ownership is imputed whenever goods are delivered between affiliated enterprises This applies only when the establishment receiving the goods assumes responsibility for making the decisions about the levels of supply and prices at which their output is delivered for the market

Imports/Exports of goods include: Non-monetary gold (i.e. not used for the purposes of monetary policy) Paper money and coins not in circulation and un-issued securities Electricity, gas and water Smuggled goods, drugs

Exports of goods without the goods crossing the frontier Examples: goods produced by resident units operating in international waters are sold directly to non-residents in foreign countries transportation equipment or other movable equipment not tied to a fixed location goods after changing ownership, which are lost or destroyed before they have crossed the frontier of the exporting country merchanting, i.e. the purchase of a good by a resident from a non-resident and the subsequent resale of the good to another non-resident, without the good entering the merchant's economy

Imports and exports exclude The following goods which nevertheless may cross the national frontier: goods in transit through a country goods shipped to or from country's own embassies, military bases or other enclaves inside the national frontiers of another country transportation equipment and other movable kinds of equipment which leave a country temporarily, without any change of economic ownership equipment and other goods which are sent abroad for processing, maintenance, servicing or repair other goods which leave a country temporarily, being generally returned within a year in their original state and without change of economic ownership

Imports/Exports of goods: FOB valuation Value of the goods at basic prices + transport and distribution costs up to the border of the exporting country (May differ from the border of the importing country considered in CIF) + taxes less subsidies on the goods exported

Imports/Exports of goods: main source External trade statistics High level of detail for commodities (> 10 000 in the EU case) High level of detail for trading partners (> 200) International harmonisation (Harmonised System of the UN, WCO) Very reliable data sources (Customs data in general) CIF valuation for imports

Imports/Exports of goods The European case Two data collection systems: Extra-EU: Customs data Intra-EU: Intrastat survey

Imports/Exports of goods National versus Community concept National concept: no quasi-transit trade country of origin for imports Community concept: quasi-transit trade captured when Extra-EU flows involved country of consignment for Intra-EU imports

Imports/Exports of goods Example: quasi-transit trade Shoes are imported from China to Antwerp (BE) with a value of 10 million euros and re-exported to France with a value of 20 million euros Belgian accounts (national concept): Imports, 0 / Exports, 0 French accounts (national concept): Imports from China, 20 million € (source Intrastat) / Exports, 0 European accounts (community concept): Imports, 10 million € (source Customs)/Exports 0

CIF valuation of imports The CIF price is the price of a good delivered at the frontier of the importing country before the payment of any import duties or other taxes on imports or trade and transport margins within the country (ESA 2010 - §3.169) CIF values used in Supply and Use tables FOB values used in National Accounts (and BoP statistics) => CIF/FOB correction applied to total imports of goods

Imports/Exports of services Definition: imports of services consist of all services rendered by non-residents to residents Definition: exports of services consist of all services rendered by residents to non-residents

Imports/Exports of services include: transportation of exported goods after they have left the frontier of the exporting country when provided by a resident carrier transportation of imported goods by a resident carrier; transportation of goods by residents on behalf of non-residents which does not involve imports or exports of the goods processing and repair activities on behalf of non-residents; these activities are to be recorded net, i.e. as an export of services excluding the value of the goods processed or repaired installation of equipment abroad when a project is of limited duration by its nature

Imports/Exports of services Main data source: BoP statistics Survey of enterprises (airlines, hotel/restaurants) Survey of households (travel expenditure) International transactions reporting system (ITRS linked to exchange controls) Administrative data sources (by-product of administrative functions) Official data (e.g. government services) Information from partner countries & international organisations Modelling (e.g. FISIM)

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