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The Impact of Globalisation on National Accounts Joint UNECE/OECD/Eurostat Working Group

The Impact of Globalisation on National Accounts Joint UNECE/OECD/Eurostat Working Group. Lidia Bratanova UNECE Statistical Division 14 October 2008, OECD WPNA. Globalisation. Unprecendented increase in the cross-border movement of goods, services and financial flows, as well as people

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The Impact of Globalisation on National Accounts Joint UNECE/OECD/Eurostat Working Group

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  1. The Impact of Globalisation on National AccountsJoint UNECE/OECD/Eurostat Working Group Lidia Bratanova UNECE Statistical Division 14 October 2008, OECD WPNA

  2. Globalisation • Unprecendented increase in the cross-border movement of goods, services and financial flows, as well as people • Favourable conditions: • Lowering of trade barriers • Reduced costs of communication and transport • Internet enabling quicker conduct of business abroad • Increased ability of companies and people to operate abroad

  3. Challenges to the compilation of NA • Increased difficulties to measure economic transactions from a national viewpoint • Insufficient coverage and guidance in the existing international standards • Need for up-to-date recommendations and solutions • Practical implications - challenges to find the necessary data

  4. Working Group on the Impact of Globalisation on NA (WGGNA) • CES decided to create a body to coordinate the work on globalisation statistics (June 2006); • CES Bureau created the WGGNA in April 2007 • Objectives: • “to review the main distortions in the compilation of national accounts and related source statistics, as caused by globalisation” • “to put forward proposals on how to deal with these distortions in order to improve the quality of NA”.

  5. Terms of reference of WGGNA • Coordinate with related Working Groups: • Inventory of work that have undertaken work on issues related to the impact act of globalisation on statistics in general and national accounts in particular-to avoid duplication • Membership: • Joint UNECE/OECD/Eurostat WG - open for all member states. IMF, UNCTAD and WTO participate actively • Leadership sub-group chaired by Netherlands includes: Canada, Czech Republic, Finland, United Kingdom, USA, UNECE, OECD, Eurostat and IMF. • Secretariat provided by the UNECE

  6. Expected Output • Output: Report providing recommendations and best practices • Identify the areas most affected by globalisation • Proposals on how to improve surveying, processing and integration of data • Proposals how to arrive at international consistency • Operational guidelines on treatment of goods for processing and merchanting • Timetable: • 2008-2009: Regular meetings of LG (twice a year) • May 2009: Second meeting of WGGNA • April 2010: Third meeting of WGGNA-draft report • June 2010: Presentation of the final report to CES

  7. WGGNA Research Agenda Four groups of topics • Problems linked to allocation of value added and income to national economies: • Transfer pricing and improved understanding of MNEs behaviour • Specialisation of supply chains: • Transactions in intellectual property (e.g.R&D) • Special Purpose Entities (SPEs) • Goods for processing, toll manufacturing • Merchanting • Consignment goods • Commissionaire trading • Re-exports and centralisation of logistics • Other centralised services

  8. WGGNA Research Agenda (cont’d) • Issues related to households, persons and employment: • E-commerce • Labour mobility and trade in services through the movement of persons • Remittances • Tourism and second homes • Other issues: • Foreign Direct Investment and related income • Transit trade • Common trading and currency block issues

  9. First Meeting of the WGGNA Three issues discussed in detail: • Goods sent abroad for processing: main conclusions - General agreement to record on a “change of ownership” basis as recommended by 2008 SNA and BPM6 - Record in a consistent manner in the BOP and NA - Data extracted from supply and use tables affected - Useful for analysts (users) if NSIs preserve additional supply and use tables that record the gross flows of processing industries

  10. First Meeting of the WGGNA (cont’d) • Merchanting:main conclusions - General agreement on 2008 SNA and BPM6 proposals - Merchanting of services should be further addressed: what exactly entails and how to deal with it - Narrower definitions for “global manufacturing” and “merchanting” activities needed - Measuring merchanting activities is challenging: what data to collect and how? Needs to be addressed in more detail

  11. First Meeting of the WGGNA (cont’d) • MNEs and allocation of income in NA: main conclusions - The issue of transfer pricing is important - Reluctance to adjust for transfer prices unless prices recorded in the company’s books are clearly wrong and information on true market prices is available - GNI may become more important in future because it is invariant to use of misleading transfer prices - Surveys and interviews may give new insights on data availability on transfer prices • Detailed minutes on the UNECE website

  12. Second Meeting of the WGGNA • 11-13 a.m. May 2009 in Geneva to discuss: • Follow-up discussion on MNEs and allocation of income; goods for processing; and merchanting • Transactions in intellectual property • Transit trade and re-export • Remittances and labour mobility • Special purpose entities • Foreign direct investment

  13. WGGNA Dedicated Website • http://www.unece.org/stats/groups/wggna.e.htm • General information: TOR, list of related TFs and other specialised groups, research agenda • Meetings • Useful documents: reading list, Leadership Group • Useful links

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