TRADE STATISTICS GOODS Harmonized Tariff Schedule (HTS) provides applicable tariff rates and statistical categories for all traded merchandise. SERVICES Services trade statistics are based on surveys conducted by the Bureau of Economic Analysis (BEA).

WHY? Changing trade patterns and technological advances have occurred since the last HS amendment in 2007 The changes are as follows: 54 – Number of chapters affected 95 – Number of subheadings removed 421 – Number of subheadings added 34 – Number of subheadings changed Sector breakdown of the changes: Special People, Special Company 98 relate to the agricultural sector 27 relate to the chemical sector 9 to the paper sector 14 to the textile sector 5 to the base metal sector 30 to the machinery and hi-tech sector An additional 37 that apply to a variety of other sectors 2012 HTS Changes - Examples Film cameras no longer have their own breakout. The Wii, PS3, and Xbox 360 now have their own subheading in Ch Big change to Ch. 64 (footwear) related to breakouts for “textile flocking” on soles Biodiesel – now specifically provided for in Hybrid-vehicle Battery Technology now has new subheadings available in chapter 85: – nickel-metal hydride batteries – lithium-ion batteries Foodstuffs –more detail is required. For example: cranberries, currently considered “other,” will get their own breakouts in fruits, nuts, and edible mixtures, as well as juices. Dairy cows are broken out to include purebred and other dairy cows. Source: Mainfreight AMENDMENTS TO THE US HTS

Potential Impacts: Different duties and rates applicable These are based on HTS and country of origin (may also need to review origin requirements as a result of changes) Detained shipments by customs agencies as a result of mistakes Changes may require: Updating of enterprise-wide computer systems Updating classification databases and changing the current company products database Informing services providers of changes AMENDMENTS TO THE US HTS

Check for changes to your products: USITC Publication 4166 includes a 2012 HTS Correlation Table w/2007 Tariffs in the appendix: If unsure of classification, can request a binding ruling from Customs and Border Protection (CBP) (can take up to 90 days to obtain and samples are often requested). CBP may have already issued rulings on products similar to yours that you can use for guidance. Can research the results of previous ruling requests by using the Customs Rulings Online Search System. CROSS also addresses other issues such as value, country of origin marking, and applicability of trade preference programs. HTS Reform Compliance Plan of Action: AMENDMENTS TO THE US HTS

SERVICES TRADE ESTIMATES The BEA publishes statistics on US cross-border trade in private services and on services supplied by majority-owned US and foreign affiliates of MNCs. Cross-border services transactions are classified into five broad “standard components”: travel; passenger fares; other transportation, such as freight and port services; royalties and license fees; other private services, such as financial services, insurance services, and business, professional, and technical services. The statistics are based on mandatory surveys of US international services and intangible assets transactions: Quarterly surveys for each “standard component” are used to prepare quarterly and annual statistics Benchmark surveys conducted every 5 years

SERVICES TRADE ESTIMATES The BE-125 covers transactions (purchases and sales or, for some services, only purchases or only sales) with affiliated and unaffiliated foreign persons in the following types of services: Accounting, auditing and bookkeeping services Advertising services Auxiliary insurance services (except by U.S. insurance companies) Computer and data processing services Construction services Data base and other information services Educational and training services Engineering, architectural, and surveying services Financial services, by non-financial firms (payments only) Industrial engineering services Industrial-type maintenance, installation, alteration, and training services Legal services Management, consulting, and public relations services (including allocated expenses) Merchanting services (receipts only) Mining services Operational leasing services Research, development, and testing services Telecommunications services Trade-related services, other than merchanting services Other selected services (The type of service must be specified.) The BE-125 collects data on the following types of intangible assets or proprietary rights: Industrial processes and products Books, compact disks, audio tapes, etc. Trademarks Performances and events pre-recorded on motion picture film and TV tape Broadcast and recording of live performances and events General use computer software Business format franchises Other intangible assets Frequency: must be filed within 45 days after the close of each fiscal quarter (or within 90 days after the close of the final quarter of the U.S. reporter’s fiscal year). Who must report/Exemption: A BE-125 report is required from when receipts from affiliated and unaffiliated foreign persons exceeded $6 million during the previous fiscal year, or can be expected to exceed $6 million in the current year; or payments exceeded $4 million during the pervious fiscal year, or can be expected to exceed $4 million in the current year. The BE-120 Benchmark Survey of Transactions in Selected Services and Intangible Assets with Foreign Persons is conducted every five years (the last was reported in 2007; the new BE-120 will be reported in 2012). A BE-120 report is required when receipts exceed $2,000,000 during the fiscal year or payments exceed $1,000,000 during the fiscal year. Most VALET services companies would fall under the BE-125, Quarterly Survey of Transactions in Selected Services and Intangible Assets with Foreign Persons

SERVICES TRADE ESTIMATES Benchmark (census) surveys Mailed to U.S. persons who have previously filed a report and all U.S. persons who have not previously filed but who are believed likely to have transactions in the covered services Reporting thresholds are intended to capture the entire universe of transactions in the covered services Respondents whose transactions fall below the thresholds are exempt from reporting data by type of service Quarterly sample surveys Have a higher reporting threshold than the benchmark surveys To ensure that published statistics cover the entire universe of transactions in non-benchmark years, BEA adds to the reported data estimates for transactions of services not covered by the annual surveys For companies required to report on the benchmark surveys but whose transactions fall below the reporting threshold for the annual surveys, transactions have tended to be small and fairly evenly divided between exports and imports, and no estimates have been included for them Estimating methodologies allow for the preparation of estimates of trade in services on a monthly basis rather than only on a quarterly or annual basis. INTERNATIONAL SERVICES DATA U.S. INTERNATIONAL TRANSACTIONS IN PRIVATE SERVICES – A Guide to the Surveys Conducted by the BEA U.S. INTERNATIONAL TRANSACTIONS – A Guide to Services Classifications Questions concerning these surveys may be addressed to BEA's Balance of Payments Division; telephone (202) between 8:00 a.m. and 4:30 p.m., eastern time; or via to

Changes were also made in June 2011 to definitions and classifications of some cross border services, affecting international transaction accounts. Services trade statistics are currently being updated to reflect these changes (October 2011). WHY? Changes result from a multiyear effort to modernize and enhance BEA's international economic accounts in order to more closely align the accounts with international guidelines. Changes include: Reclassification within services of cruise fares from passenger fares to travel Reclassification within services of the distribution rights for film and television recordings from “other” private services to royalties and license fees Reclassification of postal services from U.S. government miscellaneous services to “other” transportation Exclusion of expenditures of foreign nationals working at international organizations in the United States from “other” private services and inclusion of their earnings in compensation of employees. Foreign nationals living in the United States and employed by international organizations located in the United States were previously treated as foreign residents, therefore their purchases of goods and services were included in U.S. exports of services. Under international guidelines, these foreign nationals are treated as U.S. residents. As a result, their purchases are no longer treated as exports and their compensation is included because international organizations are considered nonresident entities regardless of their location. Change in the recording of U.S. government income on holdings of special drawing rights (SDRs) from a net basis to a gross basis. SERVICES TRADE ESTIMATES

SERVICES TRADE ESTIMATES U.S. International Services Cross-Border Trade in 2010 and Services Supplied Through Affiliates in 2009 published October

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