OECD-Eurostat Expert Meeting on Trade in Services Statistics

1. OECD-Eurostat Expert Meeting on Trade in Services Statistics Eurostat activities in trade in services and related balance of payments areas Item 14c OECD-Eurostat Expert Meeting

2. 1. BoP Regulation and BoP Committee • The regulation of the European Parliament and the Council was published on 8.02.2005 in the EU Official Journal. • A framework regulation concentrating on output requirements. • The regulation also created a Balance of Payments Committee. • The Committee held its first meeting on 8 July 2005 in Luxembourg. • Following items were addressed: • rules of procedure, • tasks, competences and ways of functioning • the work programme for 2005-2006, • format and procedure for data transmission OECD-Eurostat Expert Meeting

3. 2. Balance of payments quality report • According to the BoP Regulation Member States shall supply the Commission with a report on the quality of the data transmitted. • Eurostat is currently working on a document, which will define quality standards, content and periodicity of the report. • The document will propose a general outline for discussion with the Member States during the next Balance of Payments Working Group of October 2005. • Once a general consensus is achieved the proposal will be presented to the BoP Committee for its approval. • Apart from the Quality Reports to be submitted by the Member States, Eurostat is also preparing a draft outline for a general EU quality report on BoP, ITS and FDI. OECD-Eurostat Expert Meeting

4. 3. National action plans (NAPs) • The NAP’s are meant for the assessment of the qualitative changes taking place in the national b.o.p. statistics. • The NAPs 2004, drafted by the Member States, describe the compilation systems at the end of 2003 and 2006. • In March 2005 the BoP WG discussed a first draft document with the results of the exercise. • Eurostat will present a revised version at the October meeting of the BoP WG. • The revised version will give a detailed description of the different compilation systems in use. • In view of the future quality reports, it is useful to make a breakdown between ITRS systems with and without direct reporting, survey systems and mixed systems. OECD-Eurostat Expert Meeting

5. 4. Methodological Soundness • A joint initiative from Eurostat and OECD • Report presented by OECD in this meeting OECD-Eurostat Expert Meeting

6. 5. Foreign affiliates statistics (FATS) • On 15th March 2005 the Commission approved a formal proposal of Regulation on FATS that was presented to the Council and the Parliament. • The proposal provides for collection of inward FATS statistics on a mandatory basis and, for outward FATS statistics, pilot studies on a voluntary basis. • The Council Working Group on Statistics discussed twice. • A first exchange of information between the Presidency, the Commission and the European Parliament took place on 22 June 2005. • The draft FATS Regulation is foreseen to be discussed in the Committee on Economic and Monetary Affairs of the European Parliament on 14 September 2005. OECD-Eurostat Expert Meeting

7. 6. Remittances • The World Bank hosted in January 2005 meeting on statistics on remittances, with the objective of clarifying the needs of data users and agreeing a strategy towards improving the availability and accuracy of data on remittances. • Eurostat was actively involved and presented a paper on measuring migrants´ remittances. • The UN-TSG on the Movement of Natural Persons has already developed some new definitions for remittances within the Balance of Payments framework. • Since expertise to improve national data collection practices largely resides within countries, there had been proposals to create a “city group” for remittance statistics. Organising and hosting the inaugural meeting of the “city Group” by Eurostat is now under consideration. OECD-Eurostat Expert Meeting

8. 7. Technical Group Travel • The activities of the TG Travel are concentrated on the follow-up/monitoring of the implementation of national collection systems for travel; • Also acts as a multilateral forum of experts in order to analyse bilateral travel figures. • The June 2005 meeting concentrated on the following issues: • National Plans to collect Travel Statistics in 2005-2006 • Expenditure related to the use of second homes abroad • Borderline cases between Travel and Goods • Contribution to the compilation Guide on Statistics on International Trade in Services – travel module • Bilateral comparisons of travel figures • Analysis of asymmetries between UK and Spain OECD-Eurostat Expert Meeting

9. 8. Technical Group Merchandise Transport • The Technical Group was created to propose a uniform method for estimation of merchandise transport on a f.o.b.-f.o.b. basis. • The TG concluded that so called “Modified Invoice Based Approach (MIBA)” showed the most promising results. • The best method for each MS depends on the quality and completeness of information from the available sources (FTS, surveys, transport statistics etc.). • MIBA can be seen as a solution only for MS where good quality foreign trade data are available. • In all other cases a sample survey of external trade flows combined with survey for collecting information on transport costs and market shares of residents and non resident carriers can be recommended as alternative solution. OECD-Eurostat Expert Meeting

10. 9. Reconciliation between BoP and FTS • The main concern is to explain and reduce the discrepancies between BoP and FTS. • In August 2004 Eurostat published a Working Paper Differences between Balance of Payments and Foreign Trade Statistics, aimed at helping users to understand the main reasons of the differences. • The analysis of the results produced by various studies allows drawing some best practices on cif/fob adjustment method and other adjustments introduced by BOP compilers. • A specific task force with participation of MS, Eurostat and ECB will be set up in order to produce recommendations and national action plans. OECD-Eurostat Expert Meeting

11. 10. Steering Group Multinationals • The purpose was to assess the feasibility of a harmonised reporting form for MNEs across the EU. • The final report was presented in July 2005. • The harmonised reporting scheme appears to be feasible • Major advantages would be the increased quality of the b.o.p./i.i.p. reports and the efficiency gains for the MNE. • IT investment would often be needed. • The implementation of the harmonised reporting scheme was not considered a priority by companies that have become aware of its implications in terms of the adaptation of their systems. • the SGM concluded that, while the feasibility has been demonstrated, actual implementation work would only be resumed if new developments justify this. OECD-Eurostat Expert Meeting

12. 11. Technical Group Direct reporting • The Technical Group Direct Reporting (TGDR) in its final report suggested potential sources and several approaches that could be used to set up a good quality b.o.p./i.i.p. register, together with practical aspects on the implementation of the proposed reporting system by respondents. • The TGDR has been dissolved officially. • A new Network Group for Direct Reporting will be created • It will be chaired by one Member State assisted by Eurostat and ECB. • The aim of this Network is to facilitate, via electronic forum, exchange of experiences on implementation of direct reporting procedures and organising workshops. OECD-Eurostat Expert Meeting

13. 12. Technical Group Asymmetries/Codification/Threshold • Among several initiatives undertaken to improve the quality of balance of payments data, special attention was devoted to the process of possible harmonisation of the codification used by Member States. • The Technical Group succeeded to finalize a full set of nomenclature. • Further work would be necessary to develop a universal codification. • Member States´ interest to continue the work on codification is not high. • They stressed that available resources should be allocated to other tasks with higher priority ranking. OECD-Eurostat Expert Meeting

14. 13. BoP Quarterly data for QSA purposes • The European Parliament and the Council has adopted a new regulation on the compilation of quarterly non-financial accounts by institutional sector. • The compilation of quarterly accounts by institutional sector both at EU and national level will greatly benefit from additional details available from balance of payments statistics. • For this reason Eurostat´s BoP quarterly questionnaire has been thoroughly revised to accommodate the new codes which are aimed at fulfilling the needs of QSA compilers. • Two versions of BoP quarterly questionnaire have been introduced in the BoP Vademecum of April 2005. OECD-Eurostat Expert Meeting

15. 14. Revisions of international standards • ECB and Eurostat are members of the IMF BoP COM and participate in Technical Groups. • Eurostat and the ECB participate in the OECD’s Workshop on International Investment Statistics and the Benchmark Advisory Group and are in the process of revising the Third Benchmark Definition of Foreign Direct Investment. • In the field of the BOP revision, Eurostat prepared documents on • ultimate beneficiary owner and ultimate beneficiary affiliate (UBO/UBA) statistics, • the definition of economic unions, the application of the consignment principle in statistics for (economic) unions, • the principles for classification by industry and the treatment of retained earnings of mutual funds. OECD-Eurostat Expert Meeting

16. 15. Phare projects • The purpose is to assist the Candidate Countries to attain better quality of data and timeliness. • Phare FDI project aimed at securing a comprehensive and harmonised statistics on FDI flows and positions. • Phare FATS had led to a work plan which would allow these Countries to comply with the upcoming FATS regulation. • Future Phare projects: Production of Outward FATS Expected starting date: January 2006 Multi-Country Transition Facility Programme (10 new MS) Phare Multi beneficiary Programme (BG and RO) Assessment of feasibility of data collection and compilation according to the forthcoming FATS Regulation Expected starting date: January 2007 Phare Multi beneficiary Programme (CR and TR) OECD-Eurostat Expert Meeting

17. Thank you for your attention OECD-Eurostat Expert Meeting