1
BPM5 BPM6 / Global production:
processing and merchanting
• Norway’s experience so far
• Per Øivind Grindalen
• Tore Halvorsen / Trude Nygård Evensen
• Nordic meeting for Trade in Goods and Services/BoP
Faroe Island sept 2014
2
Processing
• Balance of Payments Manual 5 (BPM5 - 1993)
– Goods for processing treated on a gross basis (physical crossborder flows)
– Goods for processing specified under merchandise
• Balance of Payments Manual 6 (BPM6 - 2009)
– Goods for processing treated on net basis (ownership principle)
– Manufacturing services on physical inputs owned by other
(processing) to specified under services
3
Merchanting
• Balance of Payments Manual 5 (BPM5 - 1993)
– Merchanting treated on net basis
– and specified under services (exports only)
• Balance of Payments Manual 6 (BPM6 - 2009)
– Merchanting treated on semi-gross basis
– Goods acquired under merchanting as negative exports
– Goods sold under merchanting as (positive) exports
4
Experiences so far - BPM5
• Norway have not been able to follow the BPM5
recommendations, because:
– Goods for processing are included in merchandise, but
not specified
– Merchanting is not specified.
5
Preparing for BPM6
• Statistics Norway internal working group on global
production (2011):
– Global production and the definition of the national economy
– Study of theoretical implication of both old and new treatments of
processing and merchanting
– Summary and assessment bases on available information on global
production
• Conclusions of the working group:
– The measurement of exports and imports of processing influence on
the measurement of total production and intermediate consumption
– To measure exports and imports of processing and merchanting
according to international recommendations, more and better
information is needed
6
Implications of the revised recommendations
•
External trade in goods figures have to be adjusted before
use in the national accounts
– Exports and imports of goods for processing according to the
External trade statistics must be deleted
– Costs related to inputs due to goods processed abroad must be
added to imports of goods
– Direct sale of processed goods abroad to non-residents must be
added to exports of goods
•
Exports and imports of processing services must be
identified and surveyed
•
Purchase and sale of goods under merchanting must be
identified and surveyed
7
Sources: What do we know?
•
Structural business statistics:
– Covers income and costs from production abroad, but no information on
exports and imports
•
ProdCom (production output in manufacturing by type of product):
– More than 10 per cent of production income of Norwegian enterprises are
income from physical production abroad
•
External trade in goods statistics:
– Cover goods for processing (procedure code), but high degree of
uncertainty in figures so no figures have been given
•
External trade in services:
– Exports and imports of processing fees included in Contract work and other
manufacturing services
•
Structural Business Statistics, of this: The copy of the standard financial
reports that the tax authorities collect from the enterprises (the Standard
Industry Form).
8
Challenges
•
•
•
•
How to identify processing and merchanting (criteria), and distiguish
between different models of global production (processing, merchanting
and factoryless goods producers (FGPs):
– Processing: ownership to material inputs in production abroad, otherwise
merchanting or output by factoryless goods producers
Information needed
–
–
–
–
–
Imports and exports of processing services
Exports and imports of input goods under processing
Exports and imports of finished goods after processing
Purchase of goods under merchanting
Sale of goods under merchanting
How to collect data? Which sources?
–
–
–
–
Trade in goods statistics?
Trade in services statistics?
Structural business statistics?
Prodcom and other surveys?
Future fusion of Trade statistics and Structural Business Statistics?
– Big enterprise group?
9
2014 main revision of national accounts and
balance of payments
• Introduction of the new principles
• Still no final solution on how to capture processing and
merchanting in BoP and NA according to the revised
principles in SNA and BPM
– Transactions according to inward processing are recorded according
to the new principles, but regarding outward processing and
merchanting the available data are not sufficient enough
• Establish a big enterprise group in Statistics Norway? (like
in many other countries)
– Towards a micro level method
• International co-operation and development
– EUROSTAT Task Force on processing
– UN/EC Task Force on global production
10
Thank you!!