Data and Statistics
Last Updated: July 31, 2007
Direction of Trade Statistics:
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Consistency between partner country data
It is sometimes assumed that corresponding export and import data between partner countries should be consistent. That is, the exports from Country A to B should be equal to the imports of Country B from A, after taking into account the insurance and freight costs under the generally observed case that Country B imports are valued on a c.i.f. basis. The DOTS estimation system uses this assumption in cases where one partner has not reported data.
However, notwithstanding the inclusion of insurance and freight in imports c.i.f., it should be noted that there are several complications that can cause inconsistency between exports to a partner and the partner’s recorded imports f.o.b., or between imports f.o.b. from a partner and the partner’s recorded exports. The principal reasons for inconsistent statistics on destination and origin for a given shipment are differences in 1) classification concepts and detail, 2) time of recording, 3) valuation, and 4) coverage, as well as 5) processing errors:
Destination/origin classification concepts in the presence of transshipment: Much trade is consigned via other countries, for example, a substantial volume of German trade passes through the Netherlands. An inconsistency in reported trade data can arise when the trade of the originating country is classified as going to either a first or proximate destination that is a transshipment point, whereas the ultimate destination country classifies the same trade according to its ultimate source.
Alternatively, the originating country may classify the shipment as going to the ultimate destination country, whereas the ultimate destination country classifies the same trade according to a proximate source that is a transshipment point. The lack of uniformity in the classification approach actually results from the application of different national customs instructions used in determining origin, transshipment, and destination countries.
Although there would be no classification inconsistency if all countries were to use a proximate destination/origin approach, this does not meet the analytical and operational needs of many data users whose interests align with the ultimate destination and/or origin of trade. That is, analytical information following the ultimate destination/origin principle requires countries to further distinguish, by trading partner, between the exports and imports involved in transshipment through their territory (re-imports and re-exports) from exports whose ultimate origin, and imports whose ultimate destination, is in their territory.
This, however, is often a difficult distinction to make in actual situations, and publication of such data is not uniform international practice. International recommendations note that no single way of attributing partner countries is ideal in view of the prevailing conditions under which trade is recorded.
Lack of destination/source country detail in published statistics: These conditions cause immediate problems in identifying trade counterparty information from published data. Destination/ origin country for military and other confidential items and government goods may not be published or may be published only by regional aggregates. A destination can also be indeterminate and thus not be published, because the transshipment dispatcher may lack knowledge about the ultimate destination at the time of consignment. Regional aggregates without country detail may also be published when the trade of individual partners in a region is below a threshold level.
A lag occurs between shipment of an export and receipt of an import, especially for goods that are shipped over long distances. To avoid timing inconsistencies, international national accounts and balance of payments accounting standards recommend a change of ownership principle to assign a date to transactions. Under this principle, an exported good changes ownership at shipment from the exporting country, at which time the exporting country records an export and the destination country records an import (f.o.b.).
However, for practical reasons, the customs authorities of the importing country record the receipt of these goods later, when they arrive at the receiving country’s frontier. This can cause a timing inconsistency. The result is that the same shipment can appear in an importing country’s statistics for a month, quarter, and/or year that is later than the period that appears in the exporting country’s statistics.
Possible reasons for inconsistent valuation of a given shipment between source and destination include inconsistent currency version, evasion, anti-evasion procedures, values not known at the time of consignment, and differences in treatment of particular costs or procedures for assessment.
Shipments to and from free-trade zones and bonded warehouses, exclusion of military and other confidential items and government goods, value thresholds for customs registration of shipments, returned goods, and other goods missed by customs (or surveys) are examples of coverage differences that can result in inconsistencies.
As a result of reporting and processing lags, trade data for a given period are often released before all customs documents for the period have been processed. These data are sometimes not revised, or, if data are revised, errors are nevertheless made in assigning the date on which goods are shipped or received and the late data are assigned to the wrong month, quarter, and/or year. Errors can also be made in assigning a destination to exports and an origin to imports during customs clearances, or in cases when the ultimate destination is changed after the initial consignment during transshipment, the change is not incorporated into published statistics via the release of revised data.
These issues should be considered in interpreting the data. International cooperation in harmonizing and reconciling customs procedures and definitions may assist in reducing differences, and, in a few cases, countries have reconciled data or have used partner data to make their own estimates.
A particular problem arises in DOTS for countries that have large inconsistencies with partners and sometimes fail to report data. In such cases, there will be anomalies in the time series between those periods based on reported data and those based on partner data.