1. 11th National Accounts Advisory Expert Group Meeting
New York, 5-7 December 2017
9. SNA & BOP: CIF & FOB
Mark de Haan

2. Setting the scene: Netherlands is a very open economy!
As percentages of GDP:
(gross re-) exports ≈ 80%
gross property in/outflows ≈ 30%
IIP ≈ 70%
Globalisation is a prominent issue in the Netherlands
Trade balance
Property income
Financial accounts* * What do to with passing through?

3. Goods and services account
Compiled first in the SUT (submitted to the BoP);
Goods and services distinction increasingly murky (goods sent for processing, merchanting, FGP type contracting, IP, bundling, etc.)
Bridging conceptual difference is also complex
merchandise trade: cross border registration
trade in services: transfer of ownership recording
→ the required CIF/FOB recording of imports/exports increase measurement challenges

4. We tried hard but we don’t know how to do it!
CIF-FOB recording
Conceptual concerns (Walter, Harrison);
This paper is more practical:
We tried hard but we don’t know how to do it!

5. What are the problems?
In case of the Netherlands the quality of data items bridging the actual transaction price (based on the agreed terms of delivery) and the reported (import) CIF price is of low quality. This is shown in Table 1 of the paper.
In order to maintain consistency with the trade services (transport, insurance etc.) the required adjustments can only be made based on information on the nationality of the service provider (e.g. carrier). We do not have this information (as shown in the remaining tables)!

6. Our conclusions are:
CIF/FOB adjustments easily lead to additional mismatches between goods and services trade flows (concerns both import and export);
Recording trade in goods based on the actual transaction value overcomes these problems.
It may even avoid further bilateral asymmetries.
This recording may also be more be in line with general SNA recording principles (avoiding trade services imputations/adjustments).

7. Thank you!