The recommendations
of the revised Manual
on Statistics of
International Trade in
Services, (MSITS 2010).
Bettina.Wistrom@OECD.org
OECD Statistics Directorate
Measuring Global Trade – Do we have the right numbers?
2-4 February 2011, Geneva, Switzerland.
The recommendations of
MSITS 2010: Outline
• General overview and structure of the Manual.
• The phased implementation of MSITS 2010.
• Summary of core and other recommendations
regarding “ Services Transactions between residents
and non residents.” (Chapter 3)
• Summary of core and other recommendations
regarding “Foreign Affiliates Statistics and the
international supply of services”. (Chapter 4)
• Summary of recommendations regarding “statistics
on the international supply of services by modes”.
(Chapter 5)
• Compilation Guidance
The Task Force on Statistics of
International Trade in Services (TFSITS).
• European Commission
• International Monetary Fund
• Organisation for Economic Co-operation and
Development
• United Nations
• United Nations Conference on Trade and
Development
• World Tourism Organization
• World Trade Organization
General overview of MSITS 2010
• Manual on Statistics of International
Trade in Services (MSITS) first published
in 2002.
• Aim : provide clearer, more detailed and
comprehensive guidance for the
measurement of international supply of
service in a broad sense (needs of GATS).
• MSITS 2010 adopted by UNSC in
February 2010 –Edition being finalised at
UNSD.
Outline of the Manual 1/2
Chapter I
– General introduction and
foundations
Chapter II – Conceptual framework
Chapter III – Services transactions
between residents and nonresidents
Chapter IV – Foreign affiliates statistics
Chapter V – Modes of supply
NEW
Outline of the Manual 2/2
• Annex I: 2010 Extended Balance of Payments
Services Classification (EBOPS 2010).
• Annex II: ISIC Rev. 4 Categories for Foreign
Affiliates in services (ICFA Rev.1)
• Annex III: Extract from the General Agreement
on Trade in Services
• Annex IV: Services Sectoral Classification List –
MTN.GNS/W/120
• Annex V: Clarifying the Relationship Between
MSITS 2010 And Tourism Statistics
International Recommendations
Online annexes (not finalised)
1. EBOPS-CPC Ver.2; EBOPS 2010-W/120
correspondence tables.
2. ICFA-EBOPS correspondance tables
3. EBOPS-BPM6 correspondence table
4. Relation between system of health
accounts and MSITS 2010.
Conceptual frameworks 1/2
• Constructed, with some elaboration on
two basic frameworks:
1. for trade between resident and nonresidents:
• IMF BPM6 Chapter 10 on services which was
elaborated in close cooperation with the
TFSITS.
• In MSITS 2010, same information as in BPM6
chapter 10, but more detailed.
Conceptual framework 2/2
2. For foreign affiliates statistics: Concepts
and definitions are consistent with
 SNA 2008,
 Handbook on Economic Globalisation Indicators
(HEGI),
 The OECD Benchmark Definition of Foreign Direct
Investment 4th edition (BD4)
 Regulation (EC) No 716/2007 of the European
Parliament and of the Council on community
statistics on the structure and activity of foreign
affiliates.
A phased implementation 1/2.
• MSITS 2010 recognises many countries
will view the full implementation of
recommendations to be long term goal.
• Active cooperation among data compiling
institutions at the national level is
necessary
to integrate the various
elements of trade in services from BoP,
foreign direct investment and foreign
affiliates in one framework.
A phased implementation 2/2
• A phased implementation is therefore
recommended.
– To be tackled first : the core elements to be
given particular priority,
– Other elements should be implemented
incrementally thereafter.
Metadata on data coverage and
definitions are expected to be
compiled by countries.
The MSITS 2010
recommendations
MSITS Chapter 3
Services
transactions
between residents
and non residents.
The Balance of Payments
Where are the services transactions in the BOP?
BOP
Current
account
Capital & financial
account
Goods
Services
12 components
Primary Income
Secondary
Income
14
14
BPM6 Main Services Components
1. Manufacturing
services on physical
inputs owned by
others
7. Financial services
2. Maintenance and
repair services n.i.e.
9. Telecommunications,
computer and information
services
8. Charges for the use of
intellectual property n.i.e.
3. Transportation
10. Other business services
4. Travel
5. Construction
11. Personal, cultural and
recreational services
6. Insurance and
pension services
12. Government goods
and
15
services n.i.e.
Main conceptual changes
• In an attempt to better capture
globalisation and its statistical
implications, there is a stricter
application of the change of
ownership principle both in
revised SNA and BoP Manuals.
Major challenges
• New treatment of goods for
processing mean that statisticians have a
major communication challenge ahead as
this change has as a consequence
important changes in trade balances as in
the case of countries where processing is
an important activity.
• Also treatment of FISIM and Insurance
services are difficult issues which have to
be dealt with practical country cases in the
future MSITS 2010 (online) Compilation
Summary of core
recommendations
1. BPM6 recommendations on the principles of
recording (residence valuation, time of
recording, currency of recording and
conversion) should be followed.
2. EBOPS 2010: first part : compiling BoP info
following
EBOPS
2010
starting
with
subcomponents of major economic importance
for compiling country.
3. By partner country in priority for 12 main
components
Other recommendations
4. EBOPS 2010 second part – completion: to
the extent relevant to the compiling
economy, including the supplementary
items.
5. Total services transactions compiled
separately for transaction with related and
unrelated parties.
6. Each EBOPS components should be
allocated either to one dominant mode, or
whether there is no single dominant mode,
the most significant mode of supply.
MSITS Chapter 4
Foreign Affiliates
Statistics and the
international
supply of services
1. Target population
• Inward and outward FATS compiled for
foreign-controlled subset of foreign
affiliates.
• Control defined in Framework for Direct
Investment Relationships (FDIR) and
BPM6: Control deemed to exist if there is
majority ownership (i.e. control of more
than 50%) of the voting power at each
stage of ownership chain.
Core recommendations for
FATS.
• Collect complete statistics on Foreign
Direct Investment (FDI) :
• Flows, income and stocks; Broken down
by industry.
• Partner detail should be reported in the
aggregate and for major industries following
ISIC rev.4.
For those countries that must delay the
implementation of FATS, FDI statistics provide
useful and complementary information on
commercial presence
Core recommendations on
basic variables.
FATS (inward and outward) variables to include at
least the following basic measures of foreign affiliate
activity:
•
Sales (or turnover) and/or output
•
Employment
•
Value added
•
Exports and imports of goods and services
•
Number of enterprises
Inward information is usually easier information to
collect.
Variables: further details
Additional measures are suggested for countries
wishing to expand data collection of FATS beyond
the core set.
• Assets
• Compensation of employees
• Net worth
• Net operating surplus
• Gross fixed capital formation
• Taxes on income
• Research and development expenditures
• Purchase of goods and services.
FATS to be compiled on an activity
basis… but also by products
• The core recommendation is to compile FATS
statistics on an activity basis following the
Industry Categories for Affiliates in Services
(ICFA rev.1) as provided by annex II.
• As long term goal, compilation of data on a
product basis is recommended for those
variables that lend themselves to this basis of
attribution ( sales (turnover) and/or output,
exports and imports).
2. FATS variables collected for
all foreign affiliates
• FATS variables should be compiled for
all foreign affiliates, not only those
affiliates in services.
• However, the activity classification to
be used for reporting to international
organizations provides more detail for
services than for goods.
Geographical attribution
For inward FATS statistics, the first priority
for geographical attribution should be the
country of the ultimate controlling
institutional unit. However, to facilitate
linkages with FDI data, countries are also
encouraged to provide some data in which
attribution is based on the country of the first
foreign parent.
Outward FATS should be attributed based on
the country of location of the affiliate whose
operations
are
being
described.
Collecting FATS information
A variety of sources and methods may be
used to collect and compile FATS.
Separate surveys may be conducted or
links may be established with domestic
enterprise statistics that have already
been collected.
In either case, there are likely to be links
with existing FDI data.
Statistics on the
international supply of
services by mode
A statistical synthetic view of modes
of supply
Member economy B
Member economy A
Mode 1: Cross-border supply
Service supply
Consumer
in A
Service
supplier
Mode 2: Consumption abroad
Consumer
from A
The consumer or his or her property is abroad
Consumer or
property from A
Service
supply
Service
supplier
Mode 3: Commercial presence
Consumer
in A
Service
supply
Commercial
presence
Establishes a commercial presence in member A
Juridical
person
Directly recruited by foreign
established company
Mode 4: Presence of natural persons
Natural
person
Employee sent by firm from B
Consumer
in A
Service
supply
Natural
person
Self-employed goes to member A
Juridical
person
Information Needs
1) Value of the international supply
of services
2) Additional indicators
(e.g. FDI, number (stocks and
flows) of mode 4 persons)
MSITS Recommendations
•Allocate the transactions between residents
and non residents over the GATS modes of
supply.
•As a starting point, each balance-of-payments
services component (broken down according
to EBOPS 2010) should be allocated either to
one dominant mode or, where there is no
single dominant mode, to the most significant
mode(s) of supply.
•As a general rule, FATS sales (turnover)
and/or output provide(s) information on
Mode 3.
Simplified allocation of FATS and balance-of-payments data to modes of supplya
V.2. Simplified allocation of FATS and balance-ofpayments
Manufacturing
services to modes of supply (extract)
can be allocated to the
predominant mode 2 as
property of consumer is
moving for the service to
be supplied
FATS
(sales or
output)
Mode 3
As a general rule, FATS
sales (turnover) and/or
Balance-of-payments trade in services
output provide(s)
Mode(s)
information
on Mode 3.
1
2
Manufacturing services on
physical inputs owned by
others
Maintenance and repair
services n.i.e.
X
X
X
X
Transport
X
X
X
X
•
Passenger
1 and 2 and 3 and
4
4
4
4
Other recommendations
While trade in distribution services (that is,
wholesaling and retailing) is included within the
value of goods traded, separate estimation of
trade margins would improve the estimation of
the supply of services through Mode 1.
For services sectors that are important for
compiling economies, the practice of
separately identifying information on the modes
of supply within specific balance-of-payments
services items could be developed.
Presence of natural persons
(mode 4).
Given that the number of persons
crossing borders and staying abroad
is a particularly important indicator
within the context of Mode 4, MSITS
2010 recommends such information
be collected following the
recommendations of IRTS 2008,
Tourism Satellite Account-RMF
2008 and RSIM, Rev.1.
Compilation Guidance
Compilation Guidance will be an online living
document developed by the TFSITS following a
modular approach.
It will take into account existing material (IMF
CG) which will be extended with country practical
experience and country questionnaire examples.
Next TF meeting in Luxembourg (28 to 30 March
2011) will discuss the draft outline for the MSITS
compilation guide.
Thanks for your attention!!!
Bettina.wistrom@oecd.org