1. Goods sent abroad for processing and merchanting in the Norwegian national accounts
Jeanette Øynes

2. Principles – Goods for processing
Goods sent for processing abroad from country A
Domestic production in country A equals total sales value of the goods,
The service fee from the foreign supplier recorded as intermediate consumption in A (service)
Export from A: The goods sent abroad for processing are not recorded in the trade data until they are “finally” exported (change ownership)
Import to A: Service fee

3. Principles - Merchanting
According to the new recommendations: Both purchases and sales of merchanted goods are recorded under exports
Purchases are shown as negative exports of goods
Sales are shown as exports of goods
Net export is not affected in current prices (compared to the “old” recommendations), only the recording of goods and services respectively
In the production account output should be equal to “trade margins” (and equal to net exports of the goods)

4. Sources Structural business statistics PRODCOM
Main source for output, value added etc. in manufacturing indistries and most service industries in the NA
Based on data from administrative registres and some additional information from questionnaires
PRODCOM
Annual survey on production and use of certian commodities
Includes a question about production abroad
Statistics on external trade of goods
Statistics on external trade of services

5. Statistics on external trade of goods
Based on customs declarations – Goods have to cross border
Includes procedure codes that are supposed to be used for goods sent abroad for processing and for reimported goods
Procedures not always followed: not reliable data

6. Statistics on external trade of services
Based on a quarterly survey of domestic non-financial enterprises
Imports and exports by type of service
Includes exports/imports of processing fees, but difficult to identify

7. Analysing microdata Conclusions Selected units:
Units in the manufacturing industry, that in PRODCOM reports the largest values related to production abroad
A couple of units previously in the manufacturing industry before the production was sourced out
A few examples of global service providers
Conclusions
Imbalance between domestic output and exports
Processing or merchanting?

8. Conclusion Outward processing Merchanting Inward processing
Data too incomplete and unreliable to
Make estimations of import of processing services
Make corrections on export and import of goods
Merchanting
Lack of relevant data makes it difficult to implement the new recommendations (gross recording)
Inward processing
Data not reliable