B.1.1.Introduction
14.60. The rise of global value chains and complex global production arrangements presents significant challenges for balance of payments compilers. Notable in this respect are the changes introduced in the most recent version of the IMF Balance of Payments and Investment Position Manual (BPM6) regarding current account items referred to as manufacturing services on physical inputs owned by others (also called manufacturing services or processing in this chapter) and net exports of goods under merchanting (also referred to as merchanting in this chapter). Both changes reflected the recommendation that all transactions adhere to the principles of economic ownership underpinning BPM6 (and the 2008 SNA), which, in turn, better reflects the underlying economic reality underpinning global production.
14.61. However, whilst the conceptual basis and rationale for these changes, is clear, significant implementation challenges occur. The aim of this chapter is to provide implementation guidance through a presentation of successful national practices, and, in particular, through the findings of the work of the Informal Reflection Groups of the OECD’s Working Party on International Trade in Goods and Trade in Services Statistics (WPTGS), tasked with developing material for this Chapter. In doing so, this chapter - as an addition to the Compiler's Guide to the Manual on Statistics of International Trade in Services 2010 (MSITS 2010) - discusses not only transactions related to manufacturing services, but also those involving merchanting. While the latter set of transactions reflect trade in goods (and hence are not covered by MSITS 2010), merchanting is included here because the separation of merchanting from processing transactions remains one of the most important compilation challenges. In addition, in practice many countries collect merchanting transactions via trade in services enterprise surveys (which also capture manufacturing services transactions).
14.62. Before presenting the practical compilation guidance on these transactions, section 2 of this first chapter briefly reviews the existing conceptual guidance, available in BPM6 and MSITS 2010, but also more recent sources with a specific focus on globalisation and global production, notably the UNECE’s Guide to Measuring Global Production (GMGP) – the follow-up to earlier work conducted in the Guide on The Impact of Globalisation on the National Accounts. Section 3 discusses the main compilation challenges identified by compilers themselves, including, amongst others: the identification of reporters and populations; the measurement of the services flows and fees involved; and the recording of corresponding entries in merchandise trade statistics. Section 4 concludes by presenting discussion on ‘open questions’ reflecting conceptual and compilation issues that remain unsolved, with a tentative conclusion given the ongoing nature of the topic. The accompanying Annex includes 6 longer case studies, by Canada, Ireland, Israel, Denmark, Costa Rica and Sweden.