© Federal Statistical Office of Germany, Foreign trade in Input-Output Accounts

Goods sent abroad for Processing in German National Accounts

Liane Ritter

Federal Statistical Office, Germany

Task Force: Goods sent abroad for processing

Luxemburg, 23 - 24 February 2012

23 - 24 February 2012 Page 2© Federal Statistical Office of Germany, Foreign trade in Input-Output Accounts

Content

Data about processing from foreign trade statistics currently used in German national accounts

Processing in supply and use tables - an example -

Conclusion

23 - 24 February 2012 Page 3© Federal Statistical Office of Germany, Foreign trade in Input-Output Accounts

National accounts ESA 1995Exports for cross-border processing 2010

Exports for outward processing (FTS) 12 076 Mill. Euro Exports after inward processing (FTS) 35 765 Mill.

Euro Sales in the processing country (BOP) 9 292 Mill. Euro Total exports 57 133 Mill. Euro

Imports for cross-border processing 2010 Imports after outward processing (FTS) 14 259 Mill. Euro Imports for inward processing (FTS) 35 490 Mill. Euro Sales of goods after processing (BOP) 9 292 Mill. Euro Total imports 59 041 Mill. Euro

Cross-border processing is about 6% of total imports and total exports 2010

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Important product groups for processingCN Product group Outward Inward

28, 29 Chemical products I

30 Pharmaceutical products I, E

50 - 63 Textile and textile articles E, I

7106-7112,

72-83

Precious metals and metals clad with precious metals; base metals and articles of base metals

E, I

84,85 Machinery and mechanical appliance, electrical equipment; parts thereof

E, I

87 Vehicles other than railway or tramway rolling stock, and parts and accessories thereof

(E) I (E)

88 Aircraft, spacecraft, and parts of thereof I, E

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Processing by product groups (1)

Outward processing under customs control 2010 (FTS) Exports for processing 3379 Mill. Euro

CN 50 – 63 367 Mill. Euro 12% CN 84, 85 1387 Mill. Euro 41% CN 87 932 Mill. Euro 28%

Imports after processing 4361 Mill. Euro CN 50 – 63 689 Mill. Euro 16% CN 84, 85 359 Mill. Euro 8% CN 87 3057 Mill. Euro 70%

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Processing by product groups (2)

Outward processing for free market circulation2010 (FTS) Exports for processing 8697 Mill. Euro

CN 50 – 63 1294 Mill. Euro 15% CN 7106 – 7112, 72 – 83 2961 Mill. Euro 34% CN 84, 85 2245 Mill. Euro 26% CN 87 557 Mill. Euro 6%

Imports after processing 9898 Mill. Euro CN 50 – 63 2163 Mill. Euro 22% CN 7106 7112, 72 – 83 1718 Mill. Euro 17% CN 84, 85 3143 Mill. Euro 31% CN 87 749 Mill. Euro 8%

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Processing by product groups (3)

Inward processing under customs control 2010 (FTS)

Imports for processing 1 869 Mill. Euro CN 84, 85 696 Mill. Euro

37% CN 87 224 Mill. Euro

12%

Exports after processing 3 423 Mill. Euro CN 87 1 295 Mill. Euro

38%

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Processing by product groups (4)

Inward processing for free market circulation 2010 (FTS) Imports for processing 33 621 Mill. Euro

CN 28, 29 5 269 Mill. Euro 16% CN 30 10 350 Mill. Euro 31% CN 88 14 588 Mill. Euro 43%

Exports after processing 32342 Mill. Euro CN 28, 29 900 Mill. Euro 3% CN 30 15 515 Mill. Euro 48% CN 88 10 521 Mill. Euro 33%

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Example for cross-boarder processing (1) Countries

Country A: outward processing Country B: inward processing

Enterprises AE1 produces products of P1 in country B by outward processing

AE1 sells P1 for 2000 Euro. ¾ in country A (1500 Euro) and ¼ in country B (500 Euro)

AE2 sells product P2 (700 Euro) to AE1 for processing in country B BE1 produces P1 for AE1 by inward processing and receives a

processing fee of 800 Euro from AE1 BE3 sells product P3 (300 Euro) to AE1 for processing in counrtry B

Aggregates Intermediate consumption of AE1:

800 (BE1) + 700 (AE2) + 300 (BE3) = 1800 Euro Exports/Imports after processing for P1: 1800 Euro * ¾ = 1350 Euro

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10© Federal Statistical Office of Germany, Foreign trade in Input-Output Accounts

ESA 1995 – Country A

Product group

Intermediate Consumption Final usesTotal

uses/ supply

Output ImportsAE1 AE2 Total C+ GCF diff Exports Total

P1 1800   1800 1500 50 500 2050 3850 2000 1850

P2 700 700 700 700

P3

Total 1800 0 1800 1500 50 1200 2750 4550 2700 1850

GVA 200 700 900

Output 2000 700 2700

ESA 1995 – Country B

Imports country A = Export country B = 1350 + 450 + 50 = 1850

Intermediate consumption AE1 = 700 + 300 + 800 = 1800

Product group

Intermediate Consumption Final usesTotal

uses/ supply

Output ImportsAE1 AE3 Total C+ GCF inv + diff Exports Total

P1 500 -1050 1850 1300 1300 800 500

P2 700 700 700 700

P3 300 300 300 300

Total 0 0 0 500 -50 1850 2300 2300 1100 1200

GVA 800 300 1100

Output 800 300 1100

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11© Federal Statistical Office of Germany, Foreign trade in Input-Output Accounts

ESA 2010 – Country A

ESA 2010 – Country B

Imports country A = Processing fee including goods bought abroad = 1100

Intermediate consumption AE1 = 700 + 1100 = 1800

Product group

Intermediate Consumption Final usesTotal

uses/ supply

Output ImportsAE1 AE2 Total C+ GCF diff Exports Total

P1 1100   1100 1500   500 2000 3100 2000 1100

P2 700 700 700 700

P3

Total 1800 0 1800 1500   500 2000 3800 2700 1100

GVA 200 700 900

Output 2000 700 2700

Product group

Intermediate Consumption Final usesTotal

uses/ supply

Output ImportsAE1 AE3 Total C+ GCF inv + diff Exports Total

P1   500 800 1300 1300 800 500

P2

P3 300 300 300 300

Total 0 0 0 500   1100 1600 1600 1100 500

GVA 800 300 1100

Output 800 300 1100

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12© Federal Statistical Office of Germany, Foreign trade in Input-Output Accounts

Example for cross-boarder processing (2)

ESA 2010 ESA 1995 Difference Source

Exports 500 1200

Exports for outward processing 700 -700 FTS

Sales abroad after outward processing 500 500 BOP

Imports 1100 1850 -750

Imports after outward processing 1350 -1350 FTS

Sales abroad after outward processing 500 -500

Processing fee including purchases of goods

in the processing country 1100 1100 BOP

Country A: outward processing

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13© Federal Statistical Office of Germany, Foreign trade in Input-Output Accounts

Example for cross-boarder processing (3)

ESA 2010 ESA 1995 Difference Source

Imports 500 1200

Imports for inward processing 700 -700 FTS

Domestic purchases after inward processing 500 500 BOP

Exports 1100 1850 -750

Exports after inward processing 1350 -1350 FTS

Processing fee received 800 800 BOP

Goods sold to foreign owners and used for inward processing 300 300 BOP

Domestic purchases after inward processing 500 -500

Country B: inward processing

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14© Federal Statistical Office of Germany, Foreign trade in Input-Output Accounts

Conclusion

In Germany only few product groups are affected by inward or outward processing

Changes due to ESA2010 Exports and imports for/after processing have to be excluded from foreign

trade Processing fees paid and received has to be included Sales and purchases of processed goods in the processing country have to

be included only once

Improvements for German SUT Better input structure for the outward processor No regrouping of products for the inward processing country necessary No statistical differences in connection with value added of the outward

processor occurs

© Federal Statistical Office of Germany, Foreign trade in Input-Output Accounts

Thank you for your attention!