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BEA Trade Statistics Revisions Coming
On June 4th the Bureau of Economic Analysis will release its revisions in the way trade statistics are collated. This may mark the end (or beginning of the end) of meaningful trade statistics in goods that actually reflect the value of goods imported and exported by the United States' territory. From the BEA release (http://www.bea.gov/international/revision-2014.htm):
With this year’s annual revision, BEA will also introduce a new presentation of the ITAs, including a new presentation of services, as part of a comprehensive restructuring of BEA’s international economic accounts. This change in presentation, combined with the changes in definitions and classifications, will bring the statistics into closer alignment with international guidelines. Table templates of the new presentation are available on BEA’s Web site. Additional information on BEA’s comprehensive restructuring of the international accounts was presented in the March 2014 Survey of Current Business. Changes that will impact the “U.S. International Trade in Goods and Services” release are discussed below.
Goods on a BOP Basis
Net exports of goods under merchanting, which are currently included in trade in services under other private services, will be reclassified to goods through a new BOP adjustment. These net exports reflect the net value of goods that are purchased and subsequently sold abroad without entering the United States. Because these goods do not cross the U.S. customs frontier, their value is not recorded in the data for goods on a Census basis. BOP adjustments—adjustments that BEA applies to goods on a Census basis to convert them to a BOP basis—are combined and presented as net adjustments in this release.
The claim that these changes bring US statistics into closer conformity with international norms simply is not true at all. The IMF manual on balance of payments discusses merchanting in several places (see https://www.imf.org/external/pubs/ft/bopman/bopman.pdf). I copy several paragraphs from this report below. The money quote is on page 63.
"When goods are acquired from one
On page 47:
166. Other business services provided by residents to
On page 61:
199. Excluded from the category of goods for
On page 63:
207. In contrast, a change, between a resident and a
Journal of Economic Literature:
Atlantic Economic Journal: