## BPM7 Annex 5. Selected Issues on Cross-Border Trade: Annotated Outline

## Source details

**Canonical URL:** [BPM7 Annex 5. Selected Issues on Cross-Border Trade: Annotated Outline](https://www.imf.org/-/media/files/data/statistics/bmp7/chapters/ao-bpm-ann-5.pdf)

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- [Markdown version](/-/media/files/data/statistics/bmp7/chapters/ao-bpm-ann-5.pdf.md)
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### I. Introduction
- The annex will cover cross-cutting issues related to trade in goods and services outside the core balance of payments accounts but relevant for compilers and users of the balance of payments.
- Topics to be covered: classification (Section II), partner economy attribution (Section III), price and volume measures (Section IV), digital trade (Section V), and trade classified by currency (Section VI).
- The Schematic Overview provides details.

### II. Classification
- Describe the different classification systems used for goods and services and “products” more generally (e.g., by commodity or type of service, by industry, by broad economic category, by mode of transport, services by mode of supply).
- Provide appropriate references to relevant manuals/standards, such as:
  - International Merchandise Trade Statistics: Concepts and Definitions
  - Manual on Statistics of International Trade in Services
  - International Standard Industrial Classification of All Economic Activities (ISIC)
- Summarize information in a table to show how BPM presentation of goods and services fits into the broader classification landscape.
- Note: Compilers face competing priorities when presenting cross-border trade statistics by various characteristics; presentations should be considered based on resources and policy needs.

### III. Partner Economy Attribution
- Recognize partner economy attribution is treated mostly as a compilation issue in current standards and covered in the BPM6 Compilation Guide (primarily Appendix 5).
- The annex will introduce a section describing partner economy attribution for trade in goods and services, drawing from and expanding on the Compilation Guide and the UNECE Guide to Measuring Global Production.
- Address challenging issues, including:
  - Merchanting and goods for processing (GN C.4 and G.7)
  - Adjustments required to bring source data that exhibits physical cross border flow of goods to a change of economic ownership basis, including adjustments to partner economy attribution
  - Services-related partner attribution issues: intellectual property (GN G.5), attribution when the intellectual property product is owned by a Special Purpose Entity (GN G.4), transport, and other service categories

### IV. Price and Volume Measures
- Move the single paragraph on price and volume measures from BPM6 Chapter 10 into this annex, since it relates to both goods and services.
- Add references to SNA Chapter 15 (paragraphs. 15.160–166).
- Present price and volume measures as useful for analysis and data validation.

### V. Digital Trade
- Address the need to better reflect the importance of digital trade in the BPM.
- Note BPM6: paragraph 10.10 defines “e-commerce” as “a method or ordering or delivering products at least partly by electronic means...” and explains that “charges for electronically delivered products are usually included in services, whereas products supplied across the border are usually classified as goods.”
- Expand discussion to introduce the conceptual framework for digital trade from the Handbook on Measuring Digital Trade (currently being updated with an expected publication by the end of 2022).
- Include a reference to Digital Supply Use and Tables (to be described in the updated SNA), which use a consistent underlying framework centered around whether goods and services are digitally ordered and/or digitally delivered (GN DZ.5).
- Indicate that emerging issues for BPM goods and services—digital intermediation platforms, cloud computing, and intellectual property products, including computer software and artificial intelligence—will be discussed in Chapter 16, Digitalization.

### VI. International Trade Classified by Currency
- Introduce a supplemental presentation of international trade classified by currency, following GN C.3.
- Explain analytical uses: external sector vulnerabilities, sustainability analysis, regional integration, exchange rate pass-through, foreign exchange market development, and reserves adequacy.
- Present the supplemental table: disaggregation of gross totals of imports and exports for both goods and services by the currency of denomination.
- Require totals in the trade by currency composition table to equal totals in the goods and services accounts for consistency.
- Currency breakdown:
  - First: domestic and foreign currencies
  - Further breakdown of foreign currencies according to the SDR basket, and then other currencies (depending on importance of non-SDR basket currencies to the international trade of each economy)
  - Allow an unallocated item to address currency allocation difficulties

### Schematic Overview (structure)
- I Introduction
- II Classification
  - Table: Classifications for Trade Statistics
- III Partner economy attribution
- IV Price and volume measures
- V Digital trade
  - Figure: Conceptual Framework for Digital Trade (from Handbook on Measuring Digital Trade, Figure 2.1)
- VI International trade classified by currency
  - Table: Supplemental Presentation of International Trade by Currency
- References (see list below)
- Key Stakeholders Consulted (see list below)

### References (selected manuals and guidance notes cited)
- GNs G.1, G.7, C.1–C.7, DZ.5, and DZ.7–DZ.9 (guidance notes)
- International Merchandise Trade Statistics: Concepts and Definitions (IMTS 2010)
- Manual on Statistics of International Trade in Services 2010 (MSITS 2010)
- Handbook on Measuring Digital Trade
- Export and Import Price Index Manual: Theory and Practice
- UNECE Guide to Measuring Global Production

### Key Stakeholders Consulted
- System of National Account and Balance of Payments Manual editors
- CATT Secretariat

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_Source: https://www.imf.org/-/media/files/data/statistics/bmp7/chapters/ao-bpm-ann-5.pdf_