## Task Force on The SNA Research Agenda – Subgroup on Globalization — Subgroup meeting (teleconference), November 22, 2019

## Source details

**Canonical URL:** [Task Force on The SNA Research Agenda – Subgroup on Globalization — Subgroup meeting (teleconference), November 22, 2019](https://www.imf.org/-/media/files/data/statistics/bpm6/gztt/gztt-meeting-minutes-november-22-2019.pdf)

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### Participants
- Co-chairs: Mr. Michael Connolly (Ireland Central Statistics Office) and Mr. Paul Roberts (Australian Bureau of Statistics).
- Country participants included representatives from Uruguay, Norway, Japan, Morocco, United Kingdom, United States, Malaysia, and Germany.
- International Agencies/Regional Organizations represented included OECD, ECB, COMESA, UNECE, UNSD, and Eurostat.
- Secretariat: Jennifer Ribarsky (IMF), Padma Sandhya Hurree Gobin (IMF), and Margarida Martins (IMF).

### Valuation of imports/exports (CIF-FOB) consultation — outcomes
- The Secretariat summarized a written consultation of subgroup members on the issues note on CIF-FOB valuation of imports and exports.
- Of the subgroup replies from countries, "11 in a total of 16 replies from countries" (including the UK view expressed during the meeting) selected option 4: "It can be considered to amend the BPM guidelines and adopt the valuation on a true transaction or actually observed prices basis."
- Option 4 was generally considered conceptually sound, but respondents expressed the need for further consultation regarding practical considerations.

### New evidence on whether the transaction (invoice) value can be implemented
- The Secretariat reviewed the October 2019 BOPCOM discussion of the joint IMF-OECD paper on Asymmetries Arising from the CIF/FOB Adjustments in Recording International Trade in BPM6 and 2008 SNA.
- The IMF/OECD Survey on the use in practice of trade invoice values received responses from "66 countries (30 OECD and 36 non-OECD)".
- Survey country positions on using invoice values:
  - "around 20 percent" were favorable to the proposal;
  - "around half of the respondents" were unfavorable to the proposal;
  - "around 30 percent" favored more investigations.
- These survey results contrasted with the subgroup consultation results favoring option 4.
- BOPCOM concluded that:
  - the proposal entails conceptual changes (e.g., on the very concept of freight services) and practical data collection challenges;
  - further research is needed before deciding to move away from FOB valuation;
  - gathering further information from additional countries about the feasibility of using invoice values requires an enlarged survey sample.

### Way forward (discussion points and views)
- The meeting agreed on additional investigation into the practical feasibility of using transaction value data; this view echoed written consultation responses from most who selected option 4.
- Member views expressed during the meeting:
  - Option 4 and use of transaction values are conceptually valid, but practical considerations are critical (Australia, ECB, Eurostat, Germany, Ireland, Malaysia, Uruguay, UNSD, UK, and US).
  - The concepts must be well defined, and CIF/FOB should be maintained as concepts (UK).
  - In some countries invoice value data are available and implementable; invoice value data are currently in use in some countries (Australia and Norway); implementable countries cited: Australia, Eurostat, Germany, Ireland, and Uruguay.
  - In many countries estimates of the CIF/FOB adjustment lack statistical soundness due to insufficient information, causing inconsistencies across countries because different methods are used (Japan, Ireland, UK and Uruguay).
  - Harmonization between the SNA and BPM is important, and harmonization with other statistical areas (e.g., environmental accounts) should be considered (Uruguay, UK, and US).
  - Harmonization within the SNA, considering impacts on core accounts and the SUT/IOT framework, should be considered (Malaysia, Norway, and UK).
  - Additional consultation with other agencies is needed in some cases (COMESA, Malaysia, and US).
  - Customs information coverage and resource constraints vary by region; customs data may be less comprehensive and harder to obtain in some countries (COMESA, Japan).
  - Contacting the World Customs Organization to obtain information on the availability of transaction value data was recommended (Germany).
  - Consideration of timing for any changes (e.g., at a benchmark revision of the national accounts) is relevant (COMESA).
  - The subgroup should discuss additional mismeasurement issues such as the treatment of online purchases (Australia).
  - Importance of sharing information among countries (UK).
  - For Supply and Use Tables (SUTs), focus is on obtaining consistent product balances; potential clashes arise between foreign trade statistics (cif and fob values) and enterprise-reported transaction values, leading to possible incorrect estimates in remaining categories of use when forcing supply and use to balance (UK).
  - The 2008 SNA introduction of the change of ownership principle partly alleviated but did not solve problems arising from cif and fob values not approximating change of ownership valuation (UK).

### Status of work on remaining issues
- Co-chairs and Secretariat are working on the remaining two issue notes; a merged note on "intra-MNEs flows" and "Treatment of MNEs and special purpose entities, and identifying economic presence and residency" will be circulated for consultation by "the end of December 2019".
- An initial third issue paper on "IPPs", drafted by Australia, is under review by Eurostat and will be circulated to the subgroup around "February 2020".
- Any additional topics will be addressed by email.

### Agreed actions
- CIF/FOB:
  - Subgroup members: further investigate the practical feasibility of implementing the use of invoice value, based on questions to be sent by the co-chairs and the Secretariat.
  - Secretariat: further investigate the use of the IMF/OECD survey to obtain information on country practices.
  - Secretariat: investigate the possibility of contacting the World Customs Organization.
- Other topics:
  - Co-chairs and Secretariat: send draft issue note and ask for feedback of members of the subgroup (by "end-December 2019").
  - Subgroup members: provide feedback on draft issue note to be sent by Co-chairs and Secretariat.
  - Co-chairs and Secretariat: circulate papers by Australia and Eurostat (around "February 2020").

### Remaining agenda and next meeting
- Due to time limits, remaining agenda items were not discussed.
- Next meeting (teleconference): date not agreed yet.

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_Source: https://www.imf.org/-/media/files/data/statistics/bpm6/gztt/gztt-meeting-minutes-november-22-2019.pdf_