HOW TO PRODUCE STATISTICS ON IMPORTS FOB? The Brazilian Experience HOW TO PRODUCE STATISTICS ON IMPORTS FOB? The Brazilian Experience Expert Group Meeting.

MINISTRY OF DEVELOPMENT, INDUSTRY AND FOREIGN TRADEMINISTRY OF DEVELOPMENT, INDUSTRY AND FOREIGN TRADEMINISTRY OF DEVELOPMENT, INDUSTRY AND FOREIGN TRADEMINISTRY OF DEVELOPMENT, INDUSTRY AND FOREIGN TRADE

HOW TO PRODUCE HOW TO PRODUCE STATISTICS ON IMPORTS STATISTICS ON IMPORTS

FOB?FOB?

The Brazilian ExperienceThe Brazilian Experience

HOW TO PRODUCE HOW TO PRODUCE STATISTICS ON IMPORTS STATISTICS ON IMPORTS

FOB?FOB?

The Brazilian ExperienceThe Brazilian Experience

Expert Group Meeting on International Expert Group Meeting on International Merchandise Trade StatisticsMerchandise Trade Statistics

1st WPTGS meeting – OECD, Paris, 1st WPTGS meeting – OECD, Paris, 22-24 September 200822-24 September 2008

MINISTRY OF DEVELOPMENT, INDUSTRY AND FOREIGN TRADEMINISTRY OF DEVELOPMENT, INDUSTRY AND FOREIGN TRADE

Why to produce imports fob ?Why to produce imports fob ?


With the current globalization and the growing need to With the current globalization and the growing need to examine bilateral trade, the data production of import examine bilateral trade, the data production of import fob, with the greatest level of detail possible as fob, with the greatest level of detail possible as information (by the addition of the Declaration of Import), information (by the addition of the Declaration of Import), is essential to identify the likely comparative differences.is essential to identify the likely comparative differences.

When you compare statistics of two countries, the idea When you compare statistics of two countries, the idea is to compare the flow (export and import) using the is to compare the flow (export and import) using the same valuation (incoterm) and, same valuation (incoterm) and, as most of the data are in as most of the data are in export FOB, it is essential to have data fob imports, in export FOB, it is essential to have data fob imports, in order to not find unrealistic differences.order to not find unrealistic differences.


Why to produce imports fob ?Why to produce imports fob ?


Likewise, statistical data of import fob are Likewise, statistical data of import fob are widely used by central banks in balances of widely used by central banks in balances of payment and systems of national accounts. payment and systems of national accounts. When a country does not produce statistics for When a country does not produce statistics for imports FOB, it uses statistical methods based imports FOB, it uses statistical methods based on experiences that usually distort bilateral on experiences that usually distort bilateral figures, mainly because these models do not figures, mainly because these models do not take into account the characteristics of take into account the characteristics of products traded, distance, mode of transport and products traded, distance, mode of transport and so on.so on.


In Brazil, all foreign tradeIn Brazil, all foreign trade operations are operations are automated through the Integrated System of automated through the Integrated System of Foreign Trade – SISCOMEX -, involving the three Foreign Trade – SISCOMEX -, involving the three bodies responsible for Brazilian foreign trade: bodies responsible for Brazilian foreign trade: Ministry of Finance, Secretary of Foreign Trade Ministry of Finance, Secretary of Foreign Trade and Central Bank of Brazil, each with their own and Central Bank of Brazil, each with their own specific activities.specific activities.

On the next slides, I will present how we obtain On the next slides, I will present how we obtain the imports fob data in Brazil using that System. the imports fob data in Brazil using that System.


STEP 1STEP 1 - The importer access the SISCOMEX - The importer access the SISCOMEX and supplies all business information, including and supplies all business information, including incoterm used in the condition of purchase, incoterm used in the condition of purchase, typing all the values in the same condition;typing all the values in the same condition;

STEP 2STEP 2 – Internally, the system evaluates the – Internally, the system evaluates the information provided and converts, systemically, information provided and converts, systemically, all incoterms to the value of the goods at the all incoterms to the value of the goods at the place of boarding, equivalent to the FOB value.place of boarding, equivalent to the FOB value.

How to produce statistics on imports fob? The Brazilian experience.How to produce statistics on imports fob? The Brazilian experience.


STEP 3 - Once a declaration of import contains STEP 3 - Once a declaration of import contains more than one commodity, the system makes more than one commodity, the system makes the distribution of additional costs in accordance the distribution of additional costs in accordance with the incoterm used. If you have only one with the incoterm used. If you have only one product, the distribution of costs is direct;product, the distribution of costs is direct;

STEP 4STEP 4 - We take as an example a statement on - We take as an example a statement on the condition of import purchasing CIF (Cost, the condition of import purchasing CIF (Cost, Insurance and Freight) and with several Insurance and Freight) and with several additions (more than a commodity):additions (more than a commodity):



STEP 5STEP 5 - The distribution of freight is - The distribution of freight is made in made in proportion to the net weightproportion to the net weight of each commodity; of each commodity;

STEP 6STEP 6 - The distribution of the insurance is - The distribution of the insurance is made in proportion to the valuemade in proportion to the value of each of each commodity.commodity.

With the steps 5 and 6, we have, for example: With the steps 5 and 6, we have, for example: Value of imports CIF: Value of imports CIF: 10,00010,000

Net weight in kg: Net weight in kg: 10,00010,000 Total amount of freight: Total amount of freight: 1,0001,000

Total value of insurance: Total value of insurance: 1,0001,000 Number of goods of DI: Number of goods of DI: 5 5 items of the HSitems of the HS



STEP 8 - Value of each Addition:STEP 8 - Value of each Addition:

- Commodity 1 - - Commodity 1 - Value of imports CIF: 1,000Value of imports CIF: 1,000 Net weight in kg: 7,000Net weight in kg: 7,000

- Commodity 2 - Commodity 2 - Value of imports CIF: 2,000Value of imports CIF: 2,000 Net weight in kg: 200 Net weight in kg: 200

- Commodity 3 - - Commodity 3 - Value of imports CIF: 3,000Value of imports CIF: 3,000 Net weight in kg: 1,300 Net weight in kg: 1,300

- Commodity 4 - - Commodity 4 - Value of imports CIF: 2,000Value of imports CIF: 2,000 Net weight in kg: 1,300 Net weight in kg: 1,300

- Commodity 5 - - Commodity 5 - Value of imports CIF: 2,000Value of imports CIF: 2,000 Net weight in kg: 200Net weight in kg: 200



STEP 9 - Distribution of freight (1,000) by KgSTEP 9 - Distribution of freight (1,000) by Kg Commodity 1-Value of imports CIF: 1,000 Commodity 1-Value of imports CIF: 1,000

Net weight in kg: 7,000Net weight in kg: 7,000 ->700->700

Commodity 2-Value of imports CIF: 2,000 Commodity 2-Value of imports CIF: 2,000 Net weight in kg: 200Net weight in kg: 200 ->20->20

Commodity 3-Value of imports CIF: 3,000 Commodity 3-Value of imports CIF: 3,000 Net weight in kg: 1,300Net weight in kg: 1,300 ->130->130

Commodity 4-Value of imports CIF: 2,000 Commodity 4-Value of imports CIF: 2,000 Net weight in kg: 1,300Net weight in kg: 1,300 ->130->130

Commodity 5-Value of imports CIF: 2,000 Commodity 5-Value of imports CIF: 2,000 Net weight in kg: 200Net weight in kg: 200 ->20->20



STEP 10 - Distribution of Insurance (1,000)STEP 10 - Distribution of Insurance (1,000) Commodity 1 - Commodity 1 - Value of imports CIF: 1,000Value of imports CIF: 1,000 ->100->100

Net weight in kg: 7,000 Net weight in kg: 7,000 Commodity 2 - Commodity 2 - Value of imports CIF: 2,000Value of imports CIF: 2,000 ->200->200

Net weight in kg: 200 Net weight in kg: 200 Commodity 3 - Commodity 3 - Value of imports CIF: 3,000Value of imports CIF: 3,000 ->300->300



Net weight in kg: 200Net weight in kg: 200



STEP 11 - Calculation of FOB value of goods:STEP 11 - Calculation of FOB value of goods:

Commodity 1 - Value of imports CIF: 1,000 -100-700 = Commodity 1 - Value of imports CIF: 1,000 -100-700 = 200 fob200 fob Net weight in kg: 7,000 Net weight in kg: 7,000 Commodity 2 - Value of imports CIF: 2,000 -200-20 = Commodity 2 - Value of imports CIF: 2,000 -200-20 = 1,780 fob1,780 fobNet weight in kg: 200 Net weight in kg: 200 Commodity 3 - Value of imports CIF: 3,000 -300-130=Commodity 3 - Value of imports CIF: 3,000 -300-130=2,570 fob2,570 fob

Net weight in kg: 1,300 Net weight in kg: 1,300 Commodity 4-Value of imports CIF: 2,000 -200-130 = Commodity 4-Value of imports CIF: 2,000 -200-130 = 1,570 fob1,570 fobNet weight in kg: 1,300 Net weight in kg: 1,300 Commodity 5-Value of imports CIF: 2,000 -200-20 = Commodity 5-Value of imports CIF: 2,000 -200-20 = 1,780 fob1,780 fobNet weight in kg: 200Net weight in kg: 200



Additionally, that methodology can be Additionally, that methodology can be applied on a manual system of statistics applied on a manual system of statistics production or on hybrid systems production or on hybrid systems (papers and automatic systems).(papers and automatic systems).



Comparative of all incoterms with FOBComparative of all incoterms with FOB

C + F cost plus freight > DDU delivered duty unpaid >

C + I cost plus insurance > DEQdelivered ex quay (duty paid >

CFR cost and freight > DES delivered ex ship >

CIF cost, insurance and freight > EXW ex works < =

CIPcarriage and insurance paid to > FAS free alongside ship <=

CPT carriage paid to > FCA free carrier <=

DAF delivered at frontier >= FOB free on board =

DDP delivered duty paid > OSCAnother condition of sale >=



Note: (+) sum to the value on condition of sale (-) Reduces the value on condition of sale

EXW

FCA

FAZ

FOB

CFR

CIF

CPT

CI

P

DAF

DES

DEQ

DDU

DDP

Value on condition of sale + + + + + + + + + + + + +

Shipping in the exporting country +

Secure in the exporting country +

L / U / H in the exporting country +

International Freight - - - - - - - -

International Insurance - - - - - -

Loading, unloading and handling international - - - - - - - -

Customs duties and taxes - -

Freight in the country of importation - - - -

Insurance in the country of importation - - -

L / U / H in the country of importation - - - -

Interest on financing - - - - - - - - - - - - -

Another costs - - - - - - - - - - - - -



A PRACTICAL EXAMPLE OF RECENT A PRACTICAL EXAMPLE OF RECENT BILATERAL ANALYSIS:BILATERAL ANALYSIS:

BRAZIL/Exports X CHINA/Imports: BRAZIL/Exports X CHINA/Imports:FOB x CIFFOB x CIF

IInfluences of the comparison FOB / CIFnfluences of the comparison FOB / CIF


Harmonização EstatísticaHarmonização EstatísticaBrasil x ChinaBrasil x China

MINISTÉRIO DO DESENVOLVIMENTO, INDÚSTRIA E COMÉRCIO EXTERIORMINISTÉRIO DO DESENVOLVIMENTO, INDÚSTRIA E COMÉRCIO EXTERIOR

History: History:

To improve the discussions during the bilateral To improve the discussions during the bilateral negotiations between Brazil and China, It was created negotiations between Brazil and China, It was created a Statistical harmonization Group, with the purpose a Statistical harmonization Group, with the purpose to identify and eliminate differences, producing data to identify and eliminate differences, producing data acceptable by the two countries.acceptable by the two countries.


Statistics Harmonization Group Brazil x ChinaStatistics Harmonization Group Brazil x China

MINISTÉRIO DO DESENVOLVIMENTO, INDÚSTRIA E COMÉRCIO EXTERIORMINISTÉRIO DO DESENVOLVIMENTO, INDÚSTRIA E COMÉRCIO EXTERIOR

Work Methodology: Work Methodology: The Statistics Harmonization Group Brazil x China set a The Statistics Harmonization Group Brazil x China set a work methodology, which provides for the exchange of work methodology, which provides for the exchange of statistical data with the greatest possible detail, managers statistical data with the greatest possible detail, managers and each country, lay-out of data to be exchanged and the and each country, lay-out of data to be exchanged and the type of work to be done, and yet set an agenda for type of work to be done, and yet set an agenda for meetings with the analysis of flows Brazil-Imports x China-meetings with the analysis of flows Brazil-Imports x China-Exports and Brazil-Exports x China-Imports. Completed Exports and Brazil-Exports x China-Imports. Completed the analyses the SHG will be established a series of rules the analyses the SHG will be established a series of rules to be considered for the examination of the numbers until to be considered for the examination of the numbers until end 2010, when it closes the deal.end 2010, when it closes the deal.

MINISTRY OF DEVELOPMENT, INDUSTRY AND FOREIGN TRADEMINISTRY OF DEVELOPMENT, INDUSTRY AND FOREIGN TRADEMINISTÉRIO DO DESENVOLVIMENTO, INDÚSTRIA E COMÉRCIO EXTERIORMINISTÉRIO DO DESENVOLVIMENTO, INDÚSTRIA E COMÉRCIO EXTERIOR

The main concepts included in the work methodology to The main concepts included in the work methodology to be considered for the development of the tests were: be considered for the development of the tests were:

1 - Coverage (which includes and excludes)1 - Coverage (which includes and excludes)2 - Time of recording2 - Time of recording3 - System of Trade (General and/or Special)3 - System of Trade (General and/or Special)4 - Classification of goods (HS)4 - Classification of goods (HS)5 - Valuation (FOB/FOB, FOB/CIF or CIF/CIF)5 - Valuation (FOB/FOB, FOB/CIF or CIF/CIF)6 - Unit of the quantity (of HS)6 - Unit of the quantity (of HS)7 - Country partner (the concept of country)7 - Country partner (the concept of country)8 - Effects of indirect trade8 - Effects of indirect trade



BrazilBrazil EXPORTs x EXPORTs x ChinaChina IMPORTs :IMPORTs :

Source: Brazil = Siscomex China = CustomsSource: Brazil = Siscomex China = Customs

Period BRASIL EXP CHINA IMP VARIATION Brazil X China

US$ MILLIONS

FOB US$ MILLIONS

CIFValue %

2004 5.440 8.684 (3.244) (37,36)

2005 6.834 9.982 (3.148) (31,54)

2006 8.400 12.907 (4.508) (34,92)

2007 12.134 18.812 (6.678) (35,50)



1 - INCOTERM FOB x CIF (some products exported to China has the 1 - INCOTERM FOB x CIF (some products exported to China has the value of freight from 2 (soybeans) to 3 (iron ore) times the value of value of freight from 2 (soybeans) to 3 (iron ore) times the value of

goods) represents goods) represents 88%88% of the total discrepancies of the total discrepancies 2 - indirect effects of trade = 3%2 - indirect effects of trade = 3% 3 - Time of recording (distance great indicates different times)3 - Time of recording (distance great indicates different times) 4 - Goods classification (HS) - Trend of Chinese classify most of the 4 - Goods classification (HS) - Trend of Chinese classify most of the

items in “Others”items in “Others” 5 - Divergence in units of the statistics quantities5 - Divergence in units of the statistics quantities 6 - About-valuation and under-valuation6 - About-valuation and under-valuation


Major causes of the discrepancies:Major causes of the discrepancies:

Comparative Brasil-Exports x China-Imports:Comparative Brasil-Exports x China-Imports:


Brazil-IMPORTs x China-EXPORTs :Brazil-IMPORTs x China-EXPORTs :

PeriodIMP BRASIL EXP CHINA VARIATION Brazil X China

US$ MILLIONS

FOBUS$ MILLIONS

FOB Value %

2004 3.710 3.675 36 0,97

2005 5.355 4.829 525 10,88

2006 7.989 7.380 609 8,25

2007 10.288 10.758 (470) (4,37)


Source: Brazil = Siscomex China = CustomsSource: Brazil = Siscomex China = Customs


Comparative Brasil-Imports x China-Exports:Comparative Brasil-Imports x China-Exports:

Major causes of the discrepancies:Major causes of the discrepancies:

1 - Effects of indirect trade = 78%1 - Effects of indirect trade = 78% 2 - Moment of record = 16%2 - Moment of record = 16% 3 - Classification of goods (HS) - Trend of Chinese 3 - Classification of goods (HS) - Trend of Chinese

classify most of the items in “Others”classify most of the items in “Others” 4 - Divergence in units of the quantities4 - Divergence in units of the quantities 5 - Tiered Pricing5 - Tiered Pricing 6 - Under-valuation and over-valuation (leakage of taxes 6 - Under-valuation and over-valuation (leakage of taxes

and safeguards)and safeguards)



Par. 116. To promote the comparability of international Par. 116. To promote the comparability of international merchandise trade statistics and taking into account the merchandise trade statistics and taking into account the commercial and data reporting practices of the majority of commercial and data reporting practices of the majority of countries, countries, it is recommendedit is recommended that: that:

- (a) - (a) The statistical value of imported goodsThe statistical value of imported goods be a CIF-type be a CIF-type value;value;

The IMTS recommendation (Rev.2)The IMTS recommendation (Rev.2)

Par. 121. Par. 121. It is recommendedIt is recommended that countries which use that countries which use CIF-type values of imports make efforts to collect CIF-type values of imports make efforts to collect separately data for freight and insurance, at the most separately data for freight and insurance, at the most detailed commodity/partner level possible, in order to detailed commodity/partner level possible, in order to derive the FOB-type values needed for national accounts derive the FOB-type values needed for national accounts and balance of payments statistics. When such data are and balance of payments statistics. When such data are not available directly, countries may wish to obtain them not available directly, countries may wish to obtain them through sampling.through sampling.


Par. 116(?). To promote the comparability of international Par. 116(?). To promote the comparability of international merchandise trade statistics, for national accounts and balance of merchandise trade statistics, for national accounts and balance of payments statistics and taking into account the commercial and data payments statistics and taking into account the commercial and data reporting practices of countries, reporting practices of countries, it is recommendedit is recommended that: that:

- (a) - (a) The statistical value of imported goodsThe statistical value of imported goods be a FOB - type value; be a FOB - type value;

New IMTS recommendation (Rev.3) (New IMTS recommendation (Rev.3) (suggestsuggest))(for discussion)(for discussion)

Par. 121(?). Par. 121(?). It is recommendedIt is recommended that countries which use CIF-type that countries which use CIF-type values of imports make efforts to collect separately data for freight values of imports make efforts to collect separately data for freight and insurance, at the most detailed commodity/partner level and insurance, at the most detailed commodity/partner level possible, in order to derive the FOB - type values needed. When possible, in order to derive the FOB - type values needed. When these data are not available directly, countries may wish to obtain these data are not available directly, countries may wish to obtain them through sampling or applying the method of distribution used them through sampling or applying the method of distribution used by several countries, available in Annex “nn".by several countries, available in Annex “nn".


SECEXSECEXSECRETARIAT OF FOREIGN TRADESECRETARIAT OF FOREIGN TRADE

Lecturer Lecturer

Paulo Roberto Paulo Roberto PavãoPavão General Coordinator of Production Statistics General Coordinator of Production Statistics Department of Planning and Development of Department of Planning and Development of

Foreign Trade Foreign Trade Secretariat of Foreign Trade Secretariat of Foreign Trade

Ministry of Development, Industry and Foreign Ministry of Development, Industry and Foreign TradeTrade

E-mail: E-mail: [email protected].: 00 55 61 – 2109-7677Telef.: 00 55 61 – 2109-7677Fax.: 00 55 61 – 2109-7853Fax.: 00 55 61 – 2109-7853

HOW TO PRODUCE STATISTICS ON IMPORTS FOB? The Brazilian Experience HOW TO PRODUCE STATISTICS ON IMPORTS FOB? The Brazilian Experience Expert Group Meeting.

Documents

value of imports cif

fob value

data fob imports

imports fob data

net weight

commodity u step

total value of insurance

export fob