Myriam Broin Insee – National Accounts Department Eurostat Task Force on goods sent abroad for processing France

Eurostat Task Force on goods sent abroad for processing French national accounts  Manufacturing production : a new survey  Exports and imports of goods for processing: sources and issues

Eurostat Task Force on goods sent abroad for processing Production: a new survey In 2009, INSEE introduced two statistical surveys, new but slimmer than the old Annual Enterprise Surveys (Enquêtes Annuelles d'Entreprise: EAEs) : the Annual Production Survey (Enquête Annuelle de Production: EAP) in manufacturing, the Annual Sectoral Survey (Enquête Sectorielle Annuelle: ESA) in the other sectors. In manufacturing, the EAP asks enterprises for a very detailed breakdown of their output by product.

Eurostat Task Force on goods sent abroad for processing EAP, a new output survey The annual output survey was conducted for the first time in The first results concerned  Aim: identify and analyse, in value and quantity, the goods and services sold over the year. It takes into account sales, installation, fitting and maintenance of manufactured products.  Sent to entreprises The EAP splits the sales according to five production models. The information collected in the survey led to reclassify many businesses in new industries (typically from manufacturing to trade)

Eurostat Task Force on goods sent abroad for processing EAP : example

Eurostat Task Force on goods sent abroad for processing Five production models (1) EAP splits sales of each product, according to 5 production models: # M1, M2: sales of products made outside of the enterprise M1 : product purchased for resale in the same condition as received or manufactured by a contractor with material inputs not supplied by the principal (who answers the survey)  change of economic ownership  classification: industry: trade product: trade services (sales of merchandise) M2 : sales of product entirely manufactured by a contractor with material inputs supplied by the principal (who answers the survey)  no change of economic ownership  classification - industry:manufacturing product: manufactured product

Eurostat Task Force on goods sent abroad for processing Five production models (2) # M3, M4, M5: sales of a product manufactured by the enterprise, on the national territory M3 : product made by the firm itself for its own account  usual industrial scheme  classification: industry:manufacturing product: manufactured product M4 and M5: the answerer is a contractor in these cases M4 : product manufactured on behalf of a principal, but with materials purchased by the contractor, not by the principal  classification: industry:manufacturing product: manufactured product M5 : product manufactured on behalf of a principal, with materials purchased and supplied by this principal  symmetrical case of M2 model  classification: industry: manufacturing product: industrial service (processing fee)

Eurostat Task Force on goods sent abroad for processing Use by the National Accounts (2005 Base) The models of the Annual Production Survey in manufacturing are useful to classify businesses by industry, and sales by activity branch > A major source of national accounts, through the global new information system « Esane », which compiles administrative data and surveys data on businesses May 2011 : first release of French National Accounts in 2005 base, applying NACE rév. 2 > Manufacturing production evaluated de facto according to the principle of economic ownership > Note : no specific levels have been distinguished for sub- contracted operations as part of manufactured products in supply and use tables

Eurostat Task Force on goods sent abroad for processing National Accounts: towards 2010 Base In 2005 base, importations and exportations of goods still evaluated at their full value, in coherence with customs statistics  new treatment to be set up to implement ESA 2010 for the 2010 base, to be released in 2014 : Net values for bilateral trade of inward/outward processing: only the processing fees must be recorded. Possible sources  Annual Production Survey (EAP) ? Through the models M2 and M5? but it would be difficult to do so : - The survey doesn’t give information about relationship of resident units with non resident units - Then it can’t be used directly to know the kind and value of  products sent abroad for processing and re-imported to be sold on the national territory  products manufactured on the national territory on behalf of a non- resident unit and re-exported for it.

Eurostat Task Force on goods sent abroad for processing Goods sent abroad for processing  Banque de France - Balance of Payments Available data : a global evaluation of margins representing importation and exportation of industrial services (processing fee) 2009* exportation: 2,7 billion euros importation: 2,9 billion euros (*evaluation made in 2010) But : - No breakdown by product or industry - Not limited to bilateral flows - To be confronted with Customs statistical service evaluations (discrepancies exist)

Eurostat Task Force on goods sent abroad for processing Goods sent abroad for processing  Customs data Results by nature of transaction and by area (EU, extraEU) Goods for processing: a small part of French trade : between 1% and 4% of trade with EU contries between 0.5% and 2% of trade with other countries In gross values, inward processing more important than outward processing Issue: global amounts of import/export of inward/outward processing deemed not always perfectly consistent.

Eurostat Task Force on goods sent abroad for processing Goods sent abroad for processing: to do - Reconcile different sources in the national accounts : businesses surveys data, balance of payments, customs data - Harmonize evaluation of production, intermediate consumption, and import / export flows, using the same concept of change of ownership - Break down global evaluations of gross and net values of goods sent (or received from) abroad for processing (total value of goods and processing fee) - under constraints :  no impact on the GDP  general schedule of French annual national accounts, 2010 Base:  First draft version of year 2009 B2010: september 2012  Years 2009 and 2010, Base2010 : june 2013  Release : spring 2014

Eurostat Task Force on goods sent abroad for processing Thank you for your attention