INFORMATION ON GOODS AND SERVICES GOODS CENSUS BASIS The Census basis goods data are compiled from the documents collected by the U.S. Customs Service and reflect the movement of goods between foreign countries and the 50 states, the District of Columbia, Puerto Rico, the U.S. Virgin Islands and U.S. Foreign Trade Zones. They include government and non-government shipments of goods, and exclude shipments between the U.S. and its territories and possessions, transactions with the U.S. military, diplomatic and consular installations abroad, U.S. goods returned to the U.S. by its Armed Forces, personal and household effects of travelers and in-transit shipments. The General imports value reflects the total arrival of merchandise from foreign countries that immediately entered consumption channels, warehouses or Foreign Trade Zones. For imports, the value reported is the U. S. Customs Service appraised value of merchandise; generally, the price paid for merchandise for export to the U.S. Import duties, freight, insurance, and other charges incurred in bringing merchandise to the U.S. are excluded. Exports are valued at the f.a.s.- free alongside ship value of merchandise at the U.S. port of export, based on transaction price including inland freight, insurance and other charges incurred in placing the merchandise alongside the carrier at the U.S. port of exportation. Monthly data include actual month's transactions as well as a small number of transactions for previous months. Each month we revise the aggregate seasonally adjusted (current and constant dollar) and unadjusted export, import and trade balance figures, as well as the End-use totals for the prior month. SITC and country detail data are not revised monthly. The timing adjustment shown in Exhibits 14 and 15 is the difference between monthly data as originally reported and as recompiled. Annual revisions for the months are made in June to reflect corrections received subsequent to the monthly revision. These revisions are reflected in totals, End-use, SITC and country summary data. The monthly end-use, commodity, and country and area data presented in this release are on a Census basis. This refers to Exhibits 7 - 18. U.S./CANADA DATA EXCHANGE AND SUBSTITUTION The data for U.S. exports to Canada are derived from import data compiled by Canada. The use of Canada's import data to produce U.S. export data requires several alignments in order to compare the two series. 1. Coverage--Canadian imports are based on country of origin. U.S. goods shipped from a third country are included. U.S. exports exclude these foreign shipments. For February 1994, these shipments totaled $31.4 million. U.S. export coverage also excludes certain Canadian postal shipments. For February 1994, these shipments totaled $8.1 million. 2. Valuation--Canadian imports are valued at point of origin in the U.S. However, U.S. exports are valued at the port of exit in the U.S. and include inland freight charges, making the U.S. export value slightly larger. Canada requires inland freight to be reported. When it is not, an estimate of 4.5 percent is used. Inland freight charges for February 1994 account for 4.5 percent of the value of U.S. exports to Canada. 3. Reexports--U.S. exports include reexports of foreign goods. Again, the aggregate U.S. export figure is slightly larger. For February 1994, reexports to Canada were $739 million. 4. Exchange Rate--Average monthly exchange rates are applied to convert the published data to U.S. currency. For February 1994, the average exchange rate is 1.3424. 5. Other--There are other minor differences which are statistically insignificant, such as rounding error. AREA GROUPINGS (See Exhibit 15 and 15A) North America - Canada, Mexico Western Europe - Andorra, Austria, Belgium, Bosnia- Hercegovina, Croatia, Cyprus, Denmark, Faroe Islands, Finland, France, Germany, Gibralter, Greece, Iceland, Ireland, Italy, Liechtenstein, Luxembourg, Malta and Gozo, Macedonia, Monaco, Netherlands, Norway, Portugal, San Marino, Slovenia, Spain, Svalbard, Jan Mayen Island, Sweden, Switzerland, Turkey, United Kingdom, Vatican City, Yugoslavia, Fed Rep. European Union - Belgium, Denmark, France, Germany, Greece, Ireland, Italy, Luxembourg, Netherlands, Portugal, Spain, United Kingdom. European Free Trade Association - Austria, Finland, Iceland, Liechtenstein, Norway, Sweden, Switzerland. Eastern Europe - Albania, Armenia, Azerbaijan, Belarus, Bulgaria, Czech Republic, Estonia, Georgia, Hungary, Kazakhstan, Kyrgyzstan, Latvia, Lithuania, Moldova, Poland, Romania, Russia, Slovakia, Tajikistan, Turkmenistan, Ukraine, Uzbekistan. Pacific Rim - Australia, Brunei, China, Hong Kong, Indonesia, Japan, Korea, Macao, Malaysia, New Zealand, Papua New Guinea, Philippines, Singapore, Taiwan. South/Central America - Anguilla, Antigua and Barbuda, Argentina, Aruba, Bahamas, Barbados, Belize, Bermuda, Bolivia, Brazil, British Virgin Islands, Cayman Islands, Chile, Colombia, Costa Rica, Cuba, Dominica, Dominican Republic, Ecuador, El Salvador, Falkland Islands, French Guiana, Grenada, Guadeloupe, Guatemala, Guyana, Haiti, Honduras, Jamaica, Martinique, Montserrat, Netherlands Antilles, Nicaragua, Panama, Paraguay, Peru, St. Kitts and Nevis, St. Lucia, St. Vincent and the Grenadines, Suriname, Trinidad and Tobago, Turks and Caicos Islands, Uruguay, Venezuela. OPEC - Algeria, Gabon, Indonesia, Iran, Iraq, Kuwait, Libya, Nigeria, Qatar, Saudi Arabia, United Arab Emirates, Venezuela. Adjustments for Seasonal and Working-Day Variations Goods are initially classified under the Harmonized System (HS) which describes and measures the characteristics of goods traded. Combining trade into approximately 140 export and 140 import end-use categories makes it possible to examine goods according to their principal uses (See Exhibits 8 and 9). These categories are used as the basis for computing the seasonal and working-day adjusted data. These adjusted data are then summed to the six end-use aggregates for publication (Exhibit 7). These data are provided to the Bureau of Economic Analysis for use in the Balance of Payments and the National Income and Product Accounts. The seasonal adjustment procedure is based on a model, which estimates the monthly movements as percentages above or below the general level of each end-use commodity series (unlike other methods that redistribute the actual series values over the calendar year). As a result, the sum of the seasonally adjusted monthly totals will differ slightly from the unadjusted calendar year total. Imports of petroleum and petroleum products are adjusted for the length of the month. Because of the extremely variable movements of the data series for aircraft, users studying data trends may wish to analyze aircraft separately from other trade. The seasonally adjusted three-month moving averages shown in Exhibit 3 are computed by summing the subject month, the two prior months, dividing by 3 and plotting at the subject month. Adjustments for Price Change Data adjusted for seasonal variation on a constant dollar basis (1987=100 ) are presented in Exhibits 11 and 12. This adjustment for price change is done at the lowest end-use level possible, then summed to the six published end-use aggregates. The deflators are primarily based upon the monthly price indexes published by the Bureau of Labor Statistics using techniques developed for the National Income and Product Accounts by the Bureau of Economic Analysis. SITC Data Goods data appearing in Exhibit 16 are classified in terms of the Standard International Trade Classification (SITC) Revision 3. Data are arranged by principal commodity groupings. Agricultural goods consist of non-marine food products and other products of agriculture which have not passed through complex processes of manufacture, such as raw hides and skins, fats and oils, and wine. A few goods such as essential oils, starches, casein, and albumin, considered to be agricultural by the U.S. Department of Agriculture, have been excluded from agriculture goods and are included in manufactured goods where they are classified in the SITC. Manufactured goods conform to the SITC sections that include chemicals and related products, N.S.P.F.; manufactured goods classified chiefly by material; machinery and transport equipment; miscellaneous manufactured articles, N.S.P.F.; and goods and transactions not classified elsewhere. Reexports are foreign merchandise entering the country as imports and which at the time of exportation are in substantially the same condition as when imported. Reexports, included in overall export totals, appear as separate line items in Exhibit 16. Advanced Technology Products (ATP) About 500 of some 22,000 commodity classification codes used in reporting U.S. merchandise trade are identified as "advanced technology" codes and they meet the following criteria: 1. The code contains products whose technology is from a recognized high technology field (e.g., biotechnology). 2. These products represent leading edge technology in that field. 3. Such products constitute a significant part of all items covered in the selected classification code. The aggregation of the goods results in a measure of advanced technology trade which appears in Exhibit 17. This product and commodity-based measure of advanced technology differs from broader SIC industry-based measures which include all goods produced by a particular industry group, regardless of the level of technology embodied in the goods. BALANCE OF PAYMENTS (BOP) BASIS Goods on a Census basis are adjusted by the Bureau of Economic Analysis to goods on a BOP basis to bring the data in line with the concepts and definitions used to prepare the international and national accounts. Broadly, the adjustments include changes in ownership that occur without goods passing into or out of the customs territory of the United States. These adjustments are necessary to supplement coverage of the Census basis data or to eliminate duplication of transactions recorded elsewhere in the international accounts, and to value transactions according to a standard definition. The export adjustments include: U.S. military sales contracts - This deduction of U.S. military agency sales contracts is made because the Census Bureau has included these contracts in the goods data, but BEA includes them in the service category "Transfers Under U.S. Military Sales Contracts". BEA's source material for these contracts is more comprehensive, but has no distinction between goods and services. Private gift parcels. This addition is made for parcels mailed to foreigners by individuals through the U.S. Postal Service. (Only commercial shipments are covered in Census goods exports). Gold exports, nonmonetary. An addition is made for gold that is purchased by foreign official agencies from private dealers in the United States and held at the Federal Reserve Bank of New York. The Census data only include gold that leaves the country. Some smaller adjustments are also made to exports: Deductions for repairs of goods, exposed motion picture film and military grant-aid (included in U.S. government miscellaneous services). Additions for sales of fish in U.S. territorial waters, exports of electricity to Mexico, and vessels and oil rigs that change ownership for which no export document is filed. The import adjustments include: Inland freight in Canada. Imports of goods from all countries are valued at the foreign port of export, including inland freight charges (þcustoms valueþ). In the case of Canada, this should be the cost of the goods at the U.S. border. However, the Customs value for imports for certain Canadian goods is the point of origin in Canada. The BEA makes an addition for the inland freight charges of transporting these Canadian goods to the U.S. border to make the value comparable to the "customs" value as reported by all other countries. Insurance and freight charges for transporting goods to the United States from all other countries to the U.S. border are included in services by the BEA. (The same procedure is used for Mexico as an Other Adjustment, but is much smaller). Gold imports, nonmonetary. An addition is made for gold sold by foreign official agencies to private purchasers out of stock held at the Federal Reserve Bank of New York. The Census data only includes gold that enters the country. Imports by U.S. military agencies. These goods are deducted since they are included in services by BEA. Some smaller adjustments are also made to imports: Deductions for "repairs" of goods, and exposed motion picture film. Additions are made for the following items where Customs documents are not collected; imported electricity from Mexico, conversion of vessels for commercial use, and repairs to U.S. vessels abroad. SERVICES The statistics are estimates of service transactions between foreign countries and the 50 states, the District of Columbia, Puerto Rico, the U.S. Virgin Islands, and other U.S. territories and possessions. Transactions with U.S. military, diplomatic and consular installations abroad are excluded because they are considered to be part of the U.S. economy. There is information available for seven broad service categories. The categories for imports and exports are the same for six of the seven groupings. The only difference is that exports includes "Transfers Under U.S. Military Sales Contracts" while for imports the category is "Direct Defense Expenditures". The following is a brief description of the types of services are included in each category: Travel - This includes purchases of goods and services by U.S. travelers abroad and by foreign visitors to the United States. A traveler is defined as a person who stays for a period of less than 1 year in a country of which the person is not a resident. Included are expenditures for food, lodging, recreation, gifts and other items incidental to a foreign visit. Passenger Fares - Fares paid by residents of one country to residents in other countries. Receipts consist of fares received by U.S. air carriers from foreign residents for travel between the United States and foreign countries and between two foreign points. Payments consist of fares paid by U.S. residents to foreign carriers for travel between the United States and foreign countries. Other Transportation - Charges for the transportation of goods by ocean, air, waterway, pipeline and rail carriers to and from the United States. Includes freight charges, operating expenses that transportation companies incur in foreign ports, and payments for vessel charter and aircraft and freight car rentals. Royalties and License Fees - Covers transactions with foreign residents involving intangible assets and proprietary rights, such as the use of patents, techniques, processes, formulas, designs, know-how, trademarks, copyrights, franchises, and manufacturing rights. The term "royalties" generally refers to payments for the utilization of copyrights or trademarks, and the term "license fees" generally refers to payments for the use of patents or industrial processes. Other Private Services - Consists of transactions with affiliated foreigners, for which no identification by type is available, and of transactions with unaffiliated foreigners. The term þaffiliatedþ refers to a direct investment relationship, which exists when a U.S. person has ownership or control, directly or indirectly, of 10 percent or more of a foreign business enterpriseþs voting securities or the equivalent, or when a foreign person has a similar interest in a U.S. enterprise. Transactions with unaffiliated foreigners consist of education services; financial services (includes commissions and other transactions fees associated with the purchase and sale of securities and noninterest income of banks. Investment income is not included in services); insurance premiums and losses; telecommunications services (includes receipts for telephone services and telegrams) and business, professional, and technical services. Included in the last group are advertising services; computer and data processing services; database and other information services; research, development, and testing services; management consulting, and public relations services; legal services; construction, engineering, architectural, and mining services; industrial engineering services; installation, maintenance, repair of equipment; other services, including medical services and film and tape rental. Transfers Under U.S. Military Sales Contracts (Exports only) - Exports of goods and services in which U.S. Government military agencies participate. Includes both goods and services, such as repair services and training, which cannot be separately identified. Direct Defense Expenditures (Imports only) - Expenditures incurred by military agencies abroad, including expenditures by U.S. personnel, payments of wages to foreign residents, construction expenditures, payments for foreign contractual services, and procurement of foreign goods. Includes both goods and services which cannot be separately identified. U.S. Government Miscellaneous Services - Transactions of U.S. Government nonmilitary agencies with foreign residents. Most of these transactions involve the provision of services to, or purchases of services from, foreigners; transfers of some goods are also included. Services estimates are based on quarterly, annual and benchmark surveys or partial information generated from monthly reports. Service transactions are estimated at market prices. Estimates are seasonally adjusted when statistically significant seasonal patterns are present. No country or area detail is available due to the lack of adequate source data upon which to base estimates. The revision policy is as follows: Each month a preliminary estimate will be released for the current month and a revised estimate for the immediately preceding month. After a revised month is released, no further changes will be made until the quarterly international transactions estimates, based on more complete source, data are released. The first monthly release which follows the quarterly international transactions release will contain revised estimates for the previous six months, in order to align the monthly estimates with the quarterly estimates. Annual revisions for the months and quarters are made in June, which incorporate updated source data and changes in estimating methodologies. Quarterly and annual estimates of services are included as part of the U.S. international transactions accounts, published in the March, June, September and December issues of the Survey of Current Business. Releases are scheduled for June 15, September 13, and December 14, 1994. The Survey is available from the Superintendent of Documents, U.S. Government Printing Office, Washington, D.C. 20402. ELECTRONIC AVAILABILITY. The FT900 and supplement are available on the following: CENDATATM The Census Bureau's on-line information facility. Contact Customer Services, DUSD, Bureau of the Census, Washington, D.C. 20233 or call (301) 763-4100 ECONOMIC BULLETIN BOARD The U.S. Department of Commerce's on-line facility. Dial via modem (202) 482-3870 for additional subscription information. Additional data and information on goods is obtainable from: Foreign Trade Division, Bureau of the Census Washington, D.C. 20233 Additional data and information on services is obtainable from: Balance of Payments Division, Bureau of Economic Analysis Washington D.C. 20230 SOURCE: Report FT900 (CB-94-65), Bureau of the Census, Foreign Trade Division, February 1994. For more information, contact Haydn R. Mearkle (301-763-5333) or Richard M. Preuss (301-763-7754), Foreign Trade Division.