1. Imports and Exports Tables B, C, D, and E
EUROPEAN STATISTICAL TRAINING PROGRAMME (ESTP)
Course on “Material Flow Accounts”, Vienna, 3-4 October 2013
Imports and Exports Tables B, C, D, and E
Aldo Maria Femia

2. Tables B-E Table B Imports - total trade (intra + extra EU trade)
Table C Imports - extra-EU27 trade
=> Table (B minus C) – intra-EU27 imports
Table D Exports - total trade (intra + extra EU trade)
Table E Exports - extra-EU27 trade
Table (D minus E) – intra-EU27 exports
Mass weight referred to the traded weight,
to be reported in 1000 Metric tonnes as for DE

3. System boundary - Residence principle
Boundary between national (or supranational) S.-Ec. system and RoW given by the residence principle of the European System of National Accounts (ESA ): import and export flows refer to transactions of resident units with non-resident units i.e. units whose centre of economic interest is located on the national economic territory (SNA). (more on this towards the end of this presentation)

4. Conventions: goods sent for processing
Goods are often sent from one country to another for processing.
no change of ownership (remains with the original country).
A fee for a service is paid, and
only this fee is recorded in SNA monetary accounting.
EW-MFA follows the SEEA central framework.
the SEEA central framework deviates from SNA:
the transaction in physical terms is recorded both:
as the goods enter into the country of the processing unit and
as they leave that country.
clearer reconciliation of all physical flows
link to the environmental effects of the processing activity (e.g. air emissions)
in accordance with external trade statistics.
The same for flows of goods for repair and merchanting.

5. Other conventions
Transit flows:
Imports exported again without processing (no value is added).
Excluded from EW-MFA.
Packaging materials:
from a conceptual point of view, should be accounted
external trade statistics only report net weight, which usually excludes the weight of packaging material
Practically negligible considering the efforts an estimation would take. German study: only 0.5 % of the imported tonnes (GVM 2005)
… even though… 0.5 % of Italian imports is an additional 1,8 million tons…
Eurostat Task Force on MFA recommendation: no additional estimation needs to be performed
But suppose an estimate is available, how do you classify this flow?

6. Classification Similar to the classification for domestic extraction
Enables the aggregation of DE and trade, as to derive indicators at the material groups level
Some products are very heterogeneous => Prevalence criterion (e.g. motor vehicles are products mainly from metals ).
Sometimes not sufficient (=> Other products)
Not all trade is in products (Waste for treatment and disposal)

7. Classification Six broad material categories:
Biomass and biomass products
Metal ores and concentrates, raw and processed
Non-metallic minerals, raw and processed
Fossil energy materials/carriers, raw and processed
Other products
Waste imported for final treatment and disposal

8. Classification
B.1.1 Crops, raw and processed
B Cereals, raw and processed
… …
B.1.2 Crop residues and fodder crops
B Crop residues (used), raw and processed
B Fodder crops
B Fodder crops
A Grazed biomass
B.1.3 Wood and wood products
… …, raw and processed
B.1.4 Fish capture and other aquatic animals and plants, raw and processed
B.1.5 Live animals other than in 1.4, and animal products
B Live animals other than in 1.4
B Meat and meat preparations
B Dairy products, birds' eggs, and honey
B Other products from animals (animal fibres, skins, furs, leather, etc.)
B. 1.6 Products mainly from biomass

9. Classification
B.2 Metal ores and concentrates, raw and processed B.2.1 Iron ores and concentrates, iron and steel, raw and processed B.2.2 Non-ferrous metal ores and concentrates, raw and processed B Copper … B.2.3 Products mainly from metals B.3 Non-metallic minerals, raw and processed B.3.1 Marble, granite, sandstone, porphyry, basalt, other ornamental or building stone (excluding slate) B.3.10 Excavated earthen materials (including soil), only if used B.3.11 Products mainly from non metallic minerals

10. Classification B.4 Fossil energy materials/carriers, raw and processed
B Coal and other solid energy products, raw and processed …
B Liquid and gaseous energy products, raw and processed
B Adjustment for RESIDENCE PRINCIPLE: Fuel bunkered by resident units abroad
(D.4.2.3: by non-resident units domestically )
B Fuel for land transport
B Fuel for water transport
B Fuel for air transport
B Products mainly from fossil energy products
B.5 Other products
B.6 Waste imported for final treatment and disposal

11. Data sources External trade statistics: main data source
cover all flows of material goods as well as waste flows as long as the latter have a monetary value.
EU: Eurostat harmonized external trade statistic database (COMEXT)
EU-intra and EU-extra imports and exports
more than product classes
Combined Nomenclature: 8-digits
monetary, physical, and (for some goods) supplementary units.
standard physical unit: 100 kilograms
National foreign trade statistics or data bases may offer even more details.
Supplementary sources:
For adjusting the external trade data to the concepts of Environmental Accounting (namely, the residence principle)
e.g. balance of payment accounts, energy statistics, transport statistics

12. Trade data in the EU
European trade data (Intrastat and Extrastat) report imports and exports of goods in monetary and physical units.
Intra European Community Trade Statistics (Intrastat) is a system for collecting statistics on the exchange of goods among member states of the European Union (EU). When the customs check on the EU internal borders disappeared, the requirement for collecting data directly from the economic operator involved in the intra-community exchange of goods and registered in the Value Added Tax system came into force.
Statistics on the exchange of goods with non-EU countries are compiled by the Extrastat system, based on customs declarations.
For some commodities, data are reported in other physical units such as length (metres), area (square metres), volume (cubic metres, litres), numeric units (pieces, pairs, dozens, packs), or, for electricity, in kilowatt-hours (0 weight – not reported in MFA).

13. Non-weight physical data in Intrastat
From 2006 on, Member States are allowed not to collect data in kilograms if the supplementary unit is requested.
conversion into kilograms by appropriate conversion factors
Suggested method: for the same country from the years before This is usually applied by those who are in charge of foreign trade.
Possible other national sources for conversion factors: e.g national aircraft and ships registers.
Default solution: EU level conversion factors for exports and imports, provided by Eurostat.
See Annexes 6 to 9 of the questionnaire.

14. Classification of source data (CN)
subject to annual revisions
also covers waste for final treatment and disposal
first six digit codes coincide with the Harmonized Commodity Description and Coding System (HS)
links to the Standard International Trade Classification (SITC) and to the Broad Economic Categories (BEC) (used for aggregated statistics)
Let us ask RAMON

15. RE-Classification of source data (CN)
ANNEX 3
20456 hidden
rows
If uploaded in a database, makes life easier for the poor environmental accountant

16. Crosschecking
Use monetary trade data and calculated prices for cross-checking.
Missing or false physical data in single years can be estimated by use of monetary trade flow data and tonne prices in adjacent years.
Refer to alternative data sources, e.g. national or international statistics on traded goods, for example the IEA or FAO.

17. Residence principle adjustment
As seen, no adjustment for goods sent for processing
Adjustments are needed instead for goods
purchases by residents abroad (which are imports) and
purchased on the territory by non-residents (exports)
Quantitatively relevant for fuel consumption
especially for very “open” economies, e.g. with:
large airport hubs or ports on the economic territory,
big shipping fleets,
important transit routes.
Consult experts for a first assessment of the significance
B Adjustment for RESIDENCE PRINCIPLE: Fuel bunkered by resident units abroad
(D.4.2.3: by non-resident units domestically )
B Fuel for land transport
B Fuel for water transport
B Fuel for air transport

18. Which units? Resident units
THE LIMITS OF THE NATIONAL ECONOMY 2.04 The units which constitute the economy of a country and whose flows and stocks are recorded in the ESA are those which are resident. The residence of each institutional unit is the economic territory where a unit has its centre of predominant economic interest. These units are known as resident units, irrespective of nationality, legal form or presence on the economic territory at the time they carry out a transaction ‘Centre of predominant economic interest’ indicates that a location exists within the economic territory where a unit engages in economic activities and transactions on a significant scale, either indefinitely or over a finite but long period of time (a year or more). The ownership of land and buildings within the economic territory is deemed to be sufficient for the owner to have a centre of economic interest there.

19. Warning: important clarification in ESA2010 for multiterritory enterprises
Cap 18, Rest of the world, §18.17) A few enterprises operate as a seamless operation over more than one economic territory, typically for cross-border activities such as airlines, shipping lines, hydroelectric schemes on border rivers, pipelines, bridges, tunnels and undersea. Separate branches need to be identified unless the entity is run as a single operation with no separate accounts or decision-making for each territory that it operates in. In such cases, because of the central focus on data for each national economy, it is necessary to split the operations between economies. The operations are then prorated according to an appropriate enterprise-specific indicator of the proportions of operations in each territory. The prorating treatment may also be adopted for enterprises in zones subject to joint administration by two or more governments.
Ask your national accountants colleagues!

20. Residence principle adjustment – data
Energy and transport statistics:
In some countries national energy or transport statistics collect data on fuel use in international transport.
Other physical flow accounts :
Like EW-MFA other physical flow accounts (e.g. Air Emissions Accounts (AEA) and Physical Energy Flow Accounts (PEFA)) follow the residence principle and require adjustments.
Possibly use the same information to ensure consistency!
In Italy, for instance, we do “reverse engineering” on AE
National accounts:
Long tradition of implementation of the residence principle.
Monetary data on fuel use in int. transport may be available
Usually based on estimates in physical terms.

21. Territory vs residents – AEA example
Just substituting «emissions» with «purchases», it is perfect for MFA
Emission inventory=>trade statistics
Source: 2009 AEA compilation guide

22. Ask the national accountants!
What are the important areas that need to be adjusted to arrive at the residence principle?
what do they adjust in the national accounts? Tourism? International transportation – which types… shipping, air traffic, land transportation/lorries? Military operations?
Then ask, how do they adjust? What do they base their adjustments on? transportation statistics? Rule of thumb: if the national accounts do not adjust than neither should you – but alway ask why they do not adjust to avoid surprises!
Economic size of the adjustments gives you some idea regarding the importance – Big? Little? Uncertain? – and where to focus your efforts
[slide based on Julie Hass Septempber 2007 presentation for Eurostat training ] 22

23. Eurostat TF
Eurostat decided to address the transport-related compilation challenges and initiated a process in 2012.
A NAMEA Task Force on transport issues is working
Met twice in 2012 (March, October)
All presentations available at:

24. Stage of manufacturing
Traded goods can also be classified according to their level (“stage“) of manufacturing. The following three levels (or stages) of manufacturing are common: raw products:
raw materials alike products produced by primary industries such as agriculture, forestry, fishing, and mining;
semi-manufactured products: products which are further processed raw products but do not yet constitute finished products; they obviously need to be further processed;
finished products: products which are finalised, i.e. are not processed or transformed anymore; note that finished products potentially are used for final consumption by households, governments etc. but also as intermediate input to industries.
Annex 4

25. Raw Material Equivalents
flows 
direct
indirect
materials
May be estimated by using coefficients (but the most commonly available ones also cover unused indirect flows), by IO modelling, or by an hybrid approach such as the one promoted by Eurostat 
EU Regulation
(DE, Imp, Exp)
Eurostat Questionnaire
Raw Material
Equivalents (RME)
used
Also relevant in terms of environmental pressure,
but usually neglected
unused