Asymmetries in bilateral trade statistics

This content delves into reasons for discrepancies in bilateral trade statistics, the importance of harmonization, and issues related to country of origin/destination in trade data. It also explores methods to obtain FOB imports and the use of different trade systems.

• Trade statistics
• Bilateral trade
• Harmonization
• Country of origin
• FOB imports

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1. Asymmetries in bilateral trade statistics Refer to Discussion Paper by Vladimir Markhonko Ronald Jansen Chief of the Trade Statistics Branch United Nations Statistics Division / DESA E-mail: Jansen1@un.org 1

2. Why harmonizing now? New measures for bilateral trade requested Deriving Trade in Value-Added, Jobs, Use of natural resources Harmonized input to global Supply-Use tables Acceptable input to SUTs National ownership 2

3. Reason for discrepancies o Country of Origin /Country of Destination Maybe Country of consignment o Valuation CIF /FOB Imports and Exports FOB o Trade System General Trade System for all o Manufacturing services Mystery of disappearing intermediate inputs 3

4. Country of Origin / Destination China (A) A records exports to B Re-exports to C Hong Kong (B) B records Imports of A Netherlands (C) Re-exports to D C records Imports of A Germany (D) D records Imports of A (country of origin) 4

5. Country of Consignment China (A) A records exports to B Re-exports to C Hong Kong (B) B records Imports of A Netherlands (C) Re-exports to D C records Imports of B Germany (D) D records Imports of C 5

6. Imports CIF / FOB Three Methods to obtain Imports FOB: 1. Recording of Cost, Insurance and Freight per transaction 2. Recording of Cost, Insurance and Freight per Shipment (and partition) 3. Sample Freight and Insurance by HS, Partner country and Mode of Transport and use to adjust CIF to FOB 6

7. Trade System A 2006 global survey showed that 50% of countries use General Trade system and 50% Special Trade system Difference in coverage (free zones, customs warehousing, processing zones) will lead to discrepancies in recording All countries encouraged to record all elements of General Trade system (even in addition to Special) 7

8. Manufacturing Services Growing discrepancy in flows of merchandise trade and BOP trade in goods due to Manufacturing services Question: Which trade in goods flows should be used for input to global SUTs? With implementation of 2008 SNA, will USA have to add inputs used in factories in China into its national SUTs? Hong Kong has started doing this 8

9. Harmonization Process (goods side) 1. Reconciliation exercises finding common ground 2. Reconciling large trade (Chatham House) 3. Use of imports (origin) as breakdown for partner exports 4. Estimation methods (USITC) 5. Customs interest in solving discrepancies 9

10. Harmonization Process (services side) 1. Reconciliation exercises finding common ground 2. Use of exports (limited number of players) as breakdown for partner imports 3. Other methods (?) 10

11. Manufacturing Services Capital investments China USA Intermediate goods Intermediate goods Domestic intermediate goods Domestic capital and labour Mexico Intermediate and final goods Domestic sales Exports of intermediate goods Costa Rica EU Exports of final goods 11

12. Importance of Outward Processing (OP) for Hong Kong in 2009 Cost of goods sold Offshore Cost of Goods Sold in Offshore Trade Sub-contract Processing Arrangement 19% Involving Sub-contract Processing Arrangement 19% Imports of Goods Exports of Goods Involving Goods for Processing 17% 17% Involving Goods for Processing Involving Goods for Processing Involving Goods for Processing 23% 23% 12 12

13. Manufacturing Services on Physical Inputs owned by Others Cover processing, assembly, labeling, packing, etc. undertaken by enterprises that do not own the goods and that are paid a fee by the owners Ownership of the goods does not change between the processor and the owner Only the fee charged by the processor is included Also covers the cost of materials purchased by the processor 13

14. Typical trade flows of outward processing trade of Hong Kong (US$) Raw materials/semi-manufactures delivered to the mainland of China through HK (57) The mainland of China Hong Kong Processed goods returned back into HK from the mainland of China (85) New situation 57 deduct exports of goods 85 deduct imports of goods 28: all counted as imports of services? 14

15. Typical trade flows of outward processing trade of Hong Kong (US$) Vietnam 2. Raw materials/semi-manufactures delivered to the mainland of China without passing through HK (8) 1. Raw materials/semi-manufactures delivered to the mainland of China through HK (57) The mainland of China Hong Kong 4. Processed goods returned back into HK from the mainland of China (85) 3. Raw materials/semi-manufactures procured by the processing unit in the mainland of China or overseas (2) New international standard 57 deducted from exports of goods 85 deducted from imports of goods 28 8 imports of intermediate goods 2 18 imports of services Processing fee 15