Goods sent abroad for processing and merchanting in the Norwegian national accounts

The growing trend in globalisation of economic activities has presented the national accounts with new challenges. How to delineate the national economy from the rest of the world and how to measure the national production activities as opposed to other countries’ production activities have been on the agenda of international statistical forums at least the last decade. In particular two types of activities have been heavily discussed, that is processing and merchanting.

The new European recommendations on national accounting (ESA 2010), as well as the world-wide System of National Accounts (2008 SNA) and the IMF methodology on Balance of Payments statistics (BPM6) provide new guidelines on how to record processing and merchanting activities. The new key is change of economic ownership instead of physical movement of commodities. Being a small, open economy, Norway has many enterprises involved in global manufacturing, as well as some global service providers. In Statistics Norway we have studied data needs and methods related to the estimation of processing abroad, as well as merchanting, according to new principles. As a part of the project we have

• been studying the principles of the new recommendations.
• analysed the new data requirements from both external trade statistics and structural business statistics
• formulated and tested estimation methods, based on available data, for possible implementation in major revision in 2014.

For some identified corporations with production abroad, micro data from trade statistics and the link to structural statistics has been studied. Analysing the economic behaviour of these enterprises and presenting some simple data examples, the project seeked to outline what kind of extra data is needed to implement the recommendations on how to value production, export and import according to ESA 2010.

During 2011-2014 we have also participated in international discussions and cooperation regarding these topics, more specifically in the Eurostat Task Force on ‘Goods sent abroad for processing’, and in the UN/EC Task force on Global Production.