1. Comments by Anne Harrison
Agenda item 9
Merchanting
Comments by Anne Harrison

2. Merchanting of goods Pass the parcel problem
What happens when only half the transaction complete when the accounting period ends?

3. Solution
Treat as negative exports on acquisition, positive exports on disposal
BOP same but moves from services to goods

4. Benefits Goods for all countries Inventories sorted and hgl
Financial accounts and balance sheets OK
Input output OK

6. ?

7. A B A includes delivery in price B collects from A
A pays C to move to B
B pays C to collect from A

8. A B A includes delivery in price B collects from A
A pays C to move to B
B pays C to collect from A

9. Merchanting of services
Has the move from services to goods closed an option for merchanting of services?

10. Example 5
Services, particularly business services, may be subcontracted, which is similar to their being purchased and resold. Thus, subcontracting is similar in some ways to merchanting of goods. For example, a specialist service arranger may be paid to provide back-office functions for a customer, which the service arranger subcontracts to another contractor. “Service merchanting” of this kind is a small but growing activity in some economies. The value of services exported and imported in the economy of the service arranger are recorded on a gross basis. (This treatment is applicable because the arranger buys and sells the services; if the arranger acted only on a commission basis, then only the commission would be recorded as the service provided by the arranger.) However, if the activity is significant for an economy, net data could be provided on a supplementary basis.

11. Example 6 Might this be originals and copies?
Might this be transfer pricing?