1 The United States Experience in Collecting FATS Anne Flatness U.S. Bureau of Economic Analysis 2008 APEC Capacity Building Seminar-Workshop on the Measurement of International Trade in Services 2 October, 2008 Manila, Philippines

2 Bureau of Economic Analysis  Data collection and dissemination agency  Part of the U.S. Department of Commerce  Compiles national and international accounts  Gross domestic product  International transactions accounts, also known as the balance of payments  Separate data system for multinationals  Regional statistics  Industry statistics, including input/output (I/O) accounts

3 U.S Sales of Services Billions $ U.S. International Sales of Private Services Sales Abroad by Foreign Affiliates U.S. Cross-Border Exports

4 U.S. Purchases of Services Billions $ U.S. International Purchases of Private Services U.S. Purchases from Foreign-Owned Affiliates U.S. Cross-Border Imports

5 Legal Framework  International Investment Survey Act of 1976  Expanded as the International Investment and Trade in Services Survey Act in 1984  Mandatory  Confidential  Paperwork Reduction Act

6 Conceptual Framework  International guidelines  IMF Balance of Payments Manual (5 th ed. – “BPM5”)  Sixth edition scheduled for 2008  OECD Benchmark Definition of FDI  Sets world standard for FDI statistics  System of National Accounts

7 United States Experience  First collected FDI operations data for 1950, covering outward investment  Collection became more regular and more detailed in the late 1970’s / early 1980’s  Sales of goods and sales of services now reported separately and by destination  More detailed breakdown of industry classifications

8 U.S. Collection Method  Largely a survey-based system  Benchmark surveys every 5 years  Most comprehensive in subject matter  Lowest reporting thresholds  Annual surveys in interim years  Higher exemption levels and fewer items  Use statistical sampling  Estimates are made for below-threshold companies

9 Types of Data Collected  Balance sheets  Income statements  Sales  Employment and employee compensation  Research and development expenditures  Taxes  U.S. trade in goods  Value added (estimates built up from other items)

10 Some Features of the Data on Services Supplied Through Affiliates  Covers sales of services only; excludes goods and investment income (where included in operating revenue)  Excludes U.S. cross-border trade, which is recorded in the BOP  Foreign affiliates: Sales to foreign persons  U.S. affiliates: Sales in the United States  Covers majority-owned affiliates only

11 Some Features of the Data on Services Supplied Through Affiliates (Cont’d)  Covers affiliates in all industries... ... but with services industries shown in greater detail  Foreign affiliates classified in their country of location  U.S. affiliates classified according to the country of their ultimate beneficial owner (UBO)

12 Recent Changes  Improved measurement of insurance  Old measure based on insurance-related operating revenue  New measure based on ‘normal’ losses; loss data collected on surveys  Wholesale and retail trade  Old measure regarded as sales of goods  New measure captures the services component of sales using estimates of margin output

13 Current Projects  Estimates covering banks  Beginning in 2002, requested that banks report sales of services; plan to incorporate estimates in the near future  Imputed services of banks and other financial firms (FISIM)  Beginning in 2002, requested that banks report interest received and paid, plan to incorporate estimates in the near future

14 Conclusions  BEA uses benchmark and annual surveys to collect data on FATS  Surveys are mandatory and confidential  Data presented by industry and by country of affiliate or UBO  New measures of insurance and wholesale and retail services  Expanding coverage to include banks