1. Quasi transit trade in the European Union
Item 10 of the agenda
Issue paper n. 11
Daniela Comini
Eurostat

2. From page 14 of doc n. 11 X Y B A X Y B A ? ? 50 150 EU Example 1 50
As announced to the last BOPCOM meeting and to the BOP WG, Eurostat started the publication of EU aggregate for several items of the financial account.
The direct investment items (equity capital, reinvested earnings and other capital, both inward and outward) are published with level 1 geographical breakdown. For portfolio investment, financial derivative, and other investment only the total extra EU transactions are estimated.
The table in the slide shows the data as released on 22/4.
In consideration of the particular economic situation, it is interesting to have these new tools to monitor the development among other thing of the financial crisis – whose impact is less visible in the current account.
As you can see, in the last quarter of 2008 direct investment both inward and outward fell dramatically – inward direct investments even recorded a disinvestment. Both portfolio investment and other investment assets sharply decreased. The sizeable increase of portfolio investment liabilities does not counterbalance the huge drop of other investment liabilities.
Data for portfolio investment liabilities and financial derivatives were estimated using the residual method. Consistently, Eurostat started to estimate portfolio investment income debit in the same fashion; this led to a revision of the current account, which was published already in March, with the Euroindicators.

3. Hot to correct the gap: impu-tation under servicesY A B X
50 goods 50
150 EU ?
Example 1
150 goods
Hot to correct the gap: impu-tation under services
100 services/merchanting Y A B X 50
150 EU ?
Example 2
As announced to the last BOPCOM meeting and to the BOP WG, Eurostat started the publication of EU aggregate for several items of the financial account.
The direct investment items (equity capital, reinvested earnings and other capital, both inward and outward) are published with level 1 geographical breakdown. For portfolio investment, financial derivative, and other investment only the total extra EU transactions are estimated.
The table in the slide shows the data as released on 22/4.
In consideration of the particular economic situation, it is interesting to have these new tools to monitor the development among other thing of the financial crisis – whose impact is less visible in the current account.
As you can see, in the last quarter of 2008 direct investment both inward and outward fell dramatically – inward direct investments even recorded a disinvestment. Both portfolio investment and other investment assets sharply decreased. The sizeable increase of portfolio investment liabilities does not counterbalance the huge drop of other investment liabilities.
Data for portfolio investment liabilities and financial derivatives were estimated using the residual method. Consistently, Eurostat started to estimate portfolio investment income debit in the same fashion; this led to a revision of the current account, which was published already in March, with the Euroindicators.
100 services branding

4. Quasi transit trade in Belgium : page 21 doc n.11

5. Where shall the value added be recorded? Page 17 doc n.11
Extra EU imports
Intra-EU Exports
Imports of services

6. Questions for participants (page 20 doc 11)
Q1 - Is "Quasi transit trade" a problem only for the European Union and the countries of the EU, or does it affect other countries?
Q2 - Is "Quasi transit trade" a problem only for economic unions and custom areas, or does it represent a problem also for national economies?
Q3 – In case of merchandise trade involving subsidiaries of multinational enterprises, do the experts foresee a major change in the way the transactions in goods will be recorded in the future, as a consequence of the drop of the assumption of change of ownership?