Reconciling merchandise trade statistics and Balance of Payments

Reconciling merchandise trade statistics and Balance of Payments: the recommendations of the Task Force Bo. P/FTS Item 13 of the Agenda Document STD/SES/WPTGS(2008)23 Daniela Comini, Eurostat/Bo. P

To reflect on possible ways to increase consistency between FTS and Bo. P Eurostat has activated a small Task Force n TF Bo. P/FTS provided a set of recommendations useful for keeping the transition from FTS to Bo. P under control n TF Bo. P/FTS is a very informal forum for discussing new issues affecting FTS and Bo. P (is e. g. currently analysing the data on goods for processing produced by EU FTS to see how far they could be used for compiling “Manufacturing services on physical inputs owned by others”) 2

Steps followed to increase consistency between FTS and Bo. P n 1) Clarifying the treatment of borderline transactions n 2) Monitoring the transition from FTS to Bo. P via the regular compilation of Reconciliation Tables n 3) Defining a set of fundamental adjustments n 4) Providing guidelines for making fundamental adjustments 3

1) Clarifying the treatment of borderline transactions n Identifying transactions which could create doubts in the transition from FTS to Bo. P; n Clarifying the coverage of these transactions according to EU FTS Regulation and Bo. P Manuals; n See Annex 1 to STD/SES/WPTGS(2008)23 for “The List” of all the transactions where an adjustment can be expected in the transition from FTS to Bo. P; n R 1: Bo. P compilers should carefully check “The List” before making adjustments to FTS data 4

2) Monitoring the transition from FTS to Bo. P: regular compilation of Reconciliation Tables Results collected with the Reconciliation Tables revealed that: 2 a) in many cases the differences between EU FTS and EU Bo. P were due to Bo. P compilers using different FTS data than those reported to Eurostat/FTS, mainly because Bo. P compilers were not using FTS data compiled according to the Community concept; R 2: Bo. P data reported to Eurostat have to be compiled according to the Community concept: quasi-transit trade has to be included and partner country has to be country of consignment for Intra and origin for Extra 5

2) Monitoring the transition from FTS to Bo. P: regular compilation of Reconciliation Tables n Results collected with the Reconciliation Tables revealed that: n 2 b) Bo. P compilers were making adjustments to FTS data which should not be required if their data sources, FTS data, would be compiled according to Intrastat and Extrastat requirements; n R 3: Shortages of FTS data should be addressed by FTS compilers (e. g. estimations for transactions under thresholds or late reporting) 6

3) Defining a set of fundamental adjustments A) Goods for processing not returning to the reporting country; B) Repairs of goods; C) Goods procured in ports by carriers; D) Returned goods; E) Goods entering/leaving custom warehouses; D) Stocks of goods located abroad; F) Only for Imports: CIF/FOB adjustment. R 4: Bo. P compilers should dedicate particular attention to these adjustments 7

4) Providing guidelines for making the fundamental adjustments Sources and methods which could be used: For some adjustments FTS data can provide all or part of the information necessary for making the corrections: Repairs, Returned goods, Goods in custom warehouses; For other adjustments supplementary information must be collected: Goods for processing not returning to the reporting country, Stocks of goods located abroad; Goods procured in ports by carriers; CIF/FOB adjustment See Document STD/SES/WPTGS(2008)23 page 6 -7, and moreover documents BP/07/37 and BP/08/36 8