Session IIb Asymmetries in Partner Country Data

1. STC/2008/057.1 Session IIb Asymmetries in Partner Country Data Discussant Steven Keuning CES Conference in Paris, 10-12 June 2008

2. 3 Complementary perspectives Trade in goods (Ukraine paper) Trade in services (UK/US paper) Foreign direct investment (Netherlands paper) Key issues How to improve data quality through more intensive international cooperation (asymmetries papers) How to track the economic impact of rapid globalisation (FDI Paper) Session II B: “Asymmetries in Partner Country Data”

3. Summary: Asymmetry between data on Ukraine’s imports from the EU-25 and the EU-25 exports to the Ukraine is steadily increasing (to almost 30%) Recently, asymmetries with neighbouring EU-countries increased faster Important cause could be: classification of imports by country of origin interpreted as the location of the “producer” country (which is not necessarily the origin of this transport) and classification of exports by country of destination interpreted as next, but not necessarily ultimate destination of the products Need to learn from best practices and (updated) international recommendations Statistics of foreign trade goods asymmetry of partner-country data: the experience of Ukraine (Note by the State Statistics of Ukraine)

4. Are the relative asymmetries between the Ukraine and the EU as a whole smaller than the unweighed average of the relative asymmetries between the Ukraine and each of the EU member states? Do you expect that the benefits of larger-scale investigations into detailed mirror statistics would exceed the costs? Is there a need for refined international guidelines on the recording of the origin and destination of “goods in transit ” and of “re-exported goods”? Questions to the authors

5. Summary: Intensive joint work on bilateral asymmetries in 11 categories of trade in services Aim: to produce and potentially publish a set of fully reconciled, supplementary estimates, using a number of pragmatic rules of thumb Intensive preparatory work, 3-day visit in November 2006, progress on reasons for asymmetries, work not yet concluded Issues: resource constraints, confidentiality of enterprise data, different types of surveys used by UK ONS and US BEA. Preliminary investigations into asymmetries in bilateral trade in services between the USA and the UK (Tom Orford and John Lowes, ONS, UK, ED Dozier, BEA,USA)

6. 58 94 60 83 57 74 57 68 33 22 US UK 27 36 Bilateral asymmetries in trade in services Both US and UK have larger trade in services and larger asymmetrieswith the euro area than with each other EA 6

7. Questions to the authors • Did you already produce partial supplementary estimates ? • Can you assess how large a proportion of the total resources needed to achieve your aim has now been spent? • Has it been worth the effort, also in view of apparently new data sources that are being developed? • Could it be useful and feasible to single out intra-company trade in your investigations? • For which category of services do you consider this “detective” work to be most useful? 7

8. FDI Statistics, the problem or the solution in measuring globalisation? (Pim Claassen, Gerrit van den Dool, Netherlands Central Bank) • Four major challenges in measuring FDI • Inflation of FDI through use of SPVs, treasury centres, etc. • Distortion of geographical breakdown through longer investment chains • Lack of clarity on the nature of FDI (M&A, greenfield, restructuring) • Weakening of relationship between FDI and economic activity • Five methodological improvements foreseen (1.a. distinguishing SPVs, 1.b netting, 2. “looking through” SPVs, 3. distinguishing the nature of FDI, 4. providing information on the “ultimate controlling parent”) • Various remaining challenges (SPVs with domestic liabilities, “global” multinationals, linkage between FDI statistics and FATS) • Quality improvement and efficiency gains possible through: • Eurogroup Register • Handbook of Globalisation Indicators • National specialisation within a European network of compilers • Sharing micro-information 8

9. Questions to the authors • Which time frame do you foresee for the implementation of each of the five methodological improvements (e.g. in the EU)? • Will these methodological improvements suffice to meet the challenges (apart from the remaining ones that you list)? • Please elaborate on the measurement of globalisation using international input-output tables, as you quote in footnote 9 of your paper. Do you consider this a promising approach? What would be the additional data requirements, if any? 9

10. Questions for a general discussion and follow-up action • Can we tackle the confidentiality issue that severely hinders the required exchange of micro-information (at least on very large transactions) without damaging the trust of respondents? • Should we aim for a completely different data collection approach from the (largest) multinationals? If so, what could be the next step? • Are we suggesting a spurious exactness of our figures (e.g. by publishing too many digits)? • What contribution can be expected from the envisaged IMF Coordinated Direct Investment Survey? • Is there a need for a non-EU liaison group for important EU-initiatives like Eurogroups Register and the possible pooling of micro-information on FDI? 10

11. Thank you very much for your attention! 11