OECD progress report

1. MONTHLY STATISTICS OF INTERNATIONAL TRADE (MSIT) – QUALITY REVIEW IMPLICATIONS AND SCOPE FOR MORE SYNERGIES WITH MAIN ECONOMIC INDICATORS (MEI) Agenda Item 6b OECD progress report

2. Background • OECD publishes for many years the Monthly Statistics of International Trade (MSIT) and the Main Economic Indicators (MEI) • MSIT is the detailed, specialized monthly publication while trade totals are one of the many other MEI indicators • Both publications produce different data • This isssue was addressed in June 2007 in the context of the quality reviews of ITCS and MSIT • The CSTAT asked the Secretariat explicitly to inviestigate posisble causes and to remedy – if possible- to this situation

3. Factors explaining data differences • Most importantly: different sources • Sourcing or not from Eurostat • Possible differences in data coverage, such as the system of trade used • Differences in exchange rate application • Different seasonal adjustment practices

4. Different sources • The countries for which different sources are used are: • For the 12 Euro zone countries, MEI uses Eurostat data while MSIT uses national data, except for Greece where Eurostat is used as source. • Data for Korea, Switzerland and the United Kingdom are provided by the National or Federal Statistical Offices for MEI and by Customs for the MSIT publication. • The same source is used for 15 countries • Of which 6 countries are not a member of the EU (Australia, Canada, Japan, Mexico, New Zealand, and the United States) • Of which 6 countries are a member of the EU (Czech Republic, Denmark, Hungary, Poland, Slovak Republic, and Sweden) • Of which 3 countries are as EFTA members aligning with EU (Iceland, Norway and Turkey) See Table 1 in document ITS(2007)9, page 4

5. Different methodologies EU - OECD • Trade statistics provided by Eurostat and the statistics compiled by the EU Member States and sent to OECD using national concepts, are not always directly comparable. • Other possible differences EU – OECD may be: • For arrivals of goods from other EU Member States, certain EU Member States record the country of origin as the partner country in their national statistics, whereas it is the EU Member State of consignment that appears in the Community statistics relating to the same goods movement. • Treatment of goods in transit • Some EU Member States, particularly Belgium and the Netherlands do not record goods, which they consider to be 'in transit'. This covers, firstly, the import of goods from non-member countries which are customs cleared in these EU Member States before being dispatched to other EU Member States and, secondly, goods from other EU Member States which are then immediately re-exported to EU non-member countries. These goods are normally recorded for Community Statistics purposes under intra- or extra-EU trade, as appropriate. This phenomenon is known as the 'Rotterdam effect'. • Other methodological differences can cause discrepancies between national and Community statistics a well

6. Updating cut-off time • Both data collections use rolling updates; • It is, hence, impossible to identify consistent patterns in differences in timeliness by looking at the online dissemination databases; • Both databases are very close in this respect anyway with sometimes MEI being a month ahead and sometimes MSIT; • But both publications differ by about 2 weeks with regard to the cut-off date for the respective publications – this might affect the data published

7. The time factor • MEI needs “freshest” trade aggregates • If MSIT were to provide MEI with aggregate data to meet their timeliness requirements, this could mean the collection and transmission of “advance” totals It remains to be seen if this is required. Pragmatic next steps are: • The MEI team communicates to the MSIT team the monthly reception dates for trade aggregates for 2007 (total imports, total exports, and trade balance) in “raw” format, that is as received at OECD • The MSIT team would then match these dates with their reception dates (see also Table 2)

8. Different data treatment Seasonal adjustment: • MEI: takes nationally seasonally adjusted figures. Where these are not available from national sources, the series are adjusted by the Secretariat according to the X12-ARIMA method of the U.S. Bureau of the Census. • MSIT: total trade values are seasonally adjusted by the Secretariat using X12-ARIMA. • Delegates are invited to state their preference (see question 2 at the end of the document)

9. Different data treatment Currency conversion • For MSIT, the IMF monthly average conversion rates from national currencies into the US Dollar are taken • This seems not to be systematically the case in MEI • A deeper analysis is needed

10. Different data treatment Data revision • Both MEI and MSIT data collections have the same revision policy, that is a full revision going as far back as new data have been provided. Changes to published data over time are a regular and typical feature of these monthly data collections. • Data differences die to different revision policy are believed to be rather insignificant

11. Data discrepancies • Differences between the two data sets were identified even for countries where the data supplied originates from the same source and where both MSIT and MEI show the same “latest month available” • For the seven countries where source and timeliness are identical between MSIT and MEI, sometimes significant differences exist. Variations of up to 15 % require a thorough investigation on causes.

12. Data discrepancies • Concerning the other OECD countries, where either timeliness or the source or both are different, certain countries show very large differences. These are Canada (up to 19.25 % difference for imports and 19.72 % for exports), Japan (up to 24.52 % for imports and 20.35 % for exports), Luxembourg (with top values of 24.87 % for imports and 30.64 % for exports), the Netherlands (up to 17.81 % for imports and 17.91 % for exports), but also Switzerland, Turkey, New Zealand and the United States.

13. Concluding remarks • Identical series would be a great step towards greater coherence and consistency of OECD vis-à-vis external users • Therefore it is proposed that the MEI team provides the MSIT with the monthly data reception dates for the year 2007. The MSIT team then matches these with their reception dates for totals • This comparison may reveal that another source could be more suitable for either publication • Or the need could be proven to “decouple” the pure trade aggregates from the regular MSIT data submission/collection by concentrating on the earliest possible calendar date in line with MEI’s requirements. • There should be no additional burden for countries since they do already supply or make available the required data to MEI.

14. Delegates are invited to express their opinion of the following options: • Which is to be considered the best source for monthly merchandise trade data (see table 1)? • Do countries prefer to submit to OECD national seasonally adjusted data or would they prefer to let OECD adjust the data using one standard adjustment method (X12-ARIMA)?

15. Delegates are invited to express their opinion of the following options: • Do countries regard the data delivery dates as stated in table 2 and concerning only the aggregate trade data (1=total value) as earliest possibility (this includes Web services) ? If not, is there an alternative source which could provide the requested totals earlier?

16. Delegates are invited to express their opinion of the following options: • In principle MSIT should provide to MEI the trade aggregates. Would countries commit to perusing this objective if it implies some change to their data delivery schedules to enable data supplied for MSIT to meet MEI timeliness requirements (= eventually adding an advanced total for MSIT as they already deliver to MEI)?

17. Delegates are invited to express their opinion of the following options: Which role do delegates consider more appropriate for OECD? • OECD should harmonize individual country’s data to make it more comparable? • OECD should reproduce country data so that a country expert always “recognizes” his or her country’s data?

18. Thank you for your attention! Andreas.lindner@oecd.org