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Export Undercoverage

Export Undercoverage. Presentation to the Working Party on International Trade in Goods & Services Statistics (WPTGS) September 22, 2008. Canadian exports – 2001 to 2006.

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Export Undercoverage

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  1. Export Undercoverage Presentation to the Working Party on International Trade in Goods & Services Statistics (WPTGS) September 22, 2008

  2. Canadian exports – 2001 to 2006 • Canada’s merchandise exports have grown 8.9% over the last six years, increasing from $404 billion in 2001 to $440 billion in 2006. • During this period, our exports to non-US destinations jumped to $81 billion in 2006, an increase of 55% from 2001.

  3. Canada’s merchandise exports to non-US destinations, 2001 to 2006

  4. Questions Changes to reporting methods and Customs reporting regulations raised two basic questions: • Real growth or better reporting? • Is export undercoverage still significant?

  5. Canadian Export Flows • Direct to U.S. • Indirect to U.S. • Direct Non-U.S. • Indirect Non-U.S. – Through U.S. In Bond • Indirect Non-U.S. – Entered into U.S.

  6. Export Undercoverage • Export non-reporting can occur when • exporters fail to file the appropriate Canadian export documentation or • do not correctly report the information. • There are two types of export undercoverage: • Direct • Indirect

  7. Export Undercoverage • Direct exports: Canadian exports shipped directly to the country of final destination. Undercoverage occurs when exporters fail to declare exports or do not submit the required Customs documents. • Indirect exports: goods exported from Canada that travel in-transit through the U.S. to a third country. These goods are not included in U.S. import statistics. Undercoverage occurs when exporters fail to report these goods to Canada Customs.

  8. Canadian exports to non-US destinations by mode of transport MOT represents the method by which Canada’s international boundary is crossed.

  9. Marine Export Undercoverage Studies • Since the late 1990s, a series of studies have been conducted. • The results of the 2003/2004 sample survey concluded that 30% of the value of Canadian exports to countries other that the United States was not reported in the ports of Halifax, Montreal and Vancouver.

  10. In the fall of 2005, a small sample survey was conducted to obtain an understanding of the various changes at the port level since the last undercoverage study was undertaken; • Results indicated that the rate had decreased substantially; • Assumed decrease mainly as a result of the various initiatives implemented by CBSA in the past few years.

  11. CBSA Initiatives • New Regulations • Updates to the D20 Customs D Memorandum • Revisions to the B13A export declaration form • Memorandum of Understanding (MOU) agreements with carriers • No report - no load policy • Promotion of electronic reporting • Implementation of the Administrative Monetary Penalty System (AMPS)

  12. 2006 Marine Export Undercoverage Study • In the fall of 2006, a census was carried out on all direct exports to non-U.S. destinations via marine mode for the reference period of September to December 2006. • The estimated undercoverage rate in 2006 has fallen dramatically to 1.24%, from an earlier 2004 rate estimated at 30%. • These results indicate that the compliance efforts of CBSA have been influential in the reduction of export non-reporting.

  13. Marine export undercoverage estimatesSeptember to December 2006 * Based on the weight and commodity reported ** Total value from CBSA records plus the estimated undercoverage value ***The undercoverage estimate divided by the total exports

  14. Marine export undercoverage by commodityValue by leading HS Chapter

  15. Marine export undercoverage by commodityValue by leading HS 8-digit code

  16. Balance of Payments Adjustments BOP adjustment for underreporting reached 24% of total non-US exports in 2000 based on results of ITD’s undercoverage studies. • Outcome of 2006 preliminary undercoverage study resulted in a reduction in the BOP adjustment by $500 million in 2004, by $1.5 billion in 2005 and by $2.5 billion in 2006. • The 2006 & 2007 estimates for underreporting are 12% of total exports to non-US destinations.

  17. Questions? Alan Torrance Chief, Concepts & Liaison International Trade Division Statistics Canada (613) 951-4805 Alan.Torrance@statcan.gc.ca

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