Enhancing U.S. Statistics on Trade in Services

1. Enhancing U.S. Statistics on Trade in Services Maria Borga U.S. Bureau of Economic Analysis September 14, 2010

2. Collection Issues for Trade in Services • Developing data on trade in services can be challenging due to the lack of the kind of central collection point that exists for trade in goods • It is usually necessary to employ multiple methods of collection / estimation

3. United States System • Largely survey-based • Mandatory surveys authorized by International Investment and Trade in Services Survey Act • Governed by Paperwork Reduction Act • Several surveys or survey groups • Financial services • Transportation (several surveys) • Insurance • Miscellaneous services and intangible assets

4. United States System (continued) • Some use of outside sources • Travel • Education • Transportation (certain components) • Mirror (partner-country) data • A data source • Travel with Mexico and Canada • Imports of computer services from Canada • A cross-check on our own survey results

5. Recent Improvements • Realignment of classifications • Manual on Statistics of International Trade in Services • Revised edition will be available at http://unstats.un.org/unsd/tradeserv/TFSITS/default.htm • Improved measurement methodologies • Integration of affiliated and unaffiliated transactions • Miscellaneous services and intangible assets in 2006 • Financial services in 2007 • Statistics on total trade available for more types of services • Improved reporting

6. Recent Improvements (continued) • Sample frame improvements • Added a screening question to identify importers to the Census Bureau’s Company Organization Survey in 2006 • Funded a significant expansion of the sample • 458 firms were added to BEA’s mailing list for the quarterly survey of selected services for the third quarter of 2008 • These new respondents reported $173 million in exports and $123 million in imports, or about 0.5 percent of the total exports and imports reported in that quarter

7. Planned Improvements • Data sources for travel • In first quarter of 2009, instituted a survey that collects data on travel expenditures made using credit, debit, and charge cards • In addition, BEA conducted a survey of travelers that collected information on the proportion of their expenditures abroad made using various means • BEA is analyzing the initial results will use the data from these surveys to improve the statistics on travel • Improved measures of services trade in industry accounts • The 2010 comprehensive revision of the Industry Accounts will incorporate the new type-of-service detail available as of 2006

8. Potential Improvements • Sample frame improvements • Link between trade in services surveys and 2002 Economic Census indicates that further data sharing could improve BEA’s statistics by identifying firms that export services but do not currently report on BEA’s surveys • Requires passage of the administration’s proposal on data sharing and synchronization

9. Potential Improvements (continued) • New international standards • Balance of Payments Manual 6th edition and revised Manual on Statistics of International Trade in Services • Improved measures of insurance, computer software, and financial services • Expands coverage of trade in services to include manufacturing services provided by an entity, the processor, that does not take ownership of the physical inputs and that receives a fee from the owner of the inputs • Considerable challenge for international data collection

10. Potential Improvements (continued) • Changes to the surveys • Coverage of additional types of services • Hampered by limited detail in company record-keeping systems • Maybe possible to collect more detail for exports of services • But more detail on imports would require a concerted effort to expand detail collected from U.S. businesses on all purchases of services • Lower reporting thresholds • Operating data • Collecting items such as employment • Could yield important information on the characteristics of firms that export services

11. Conclusions • U.S. system to compile statistics on trade in services largely a survey-based system • Mandatory and confidential surveys • Paperwork Reduction Act • Recent improvements • Additional detail on affiliated trade in services • Sample frame improvements

12. Conclusions • Planned improvements • New data sources for travel • Incorporation of new detail in BEA’s Industry Accounts • Potential improvements • Additional sample frame improvements focused on exporters • Meeting new international standards • Changes to the surveys • Improvements could help support the President’s National Export Initiative