UNECE Task Force on Measurement of Global Production

Summary of TF work in 2013/2014

Michael ConnollyChair

May 2014

Mandate & Objectives

Status of Guide

Consultations Further Work

Mandate QNA

Patent Cliff

ESA 2010

Objectives of TF Work Programme

Guide on measurement

of Global Production

Conceptual Guidance

Practical Guidance

Research Agenda

• Typology• Economic Ownership • Treatment of Ownership of IPPs

Conceptual Guidance

• FGPs• Merchanting/Goods for Processing• Quasi Transit Trade• Multi Territory Organisations

Practical Guidance

Guide on Measurement of Global Production

Research Agenda

/other issues

• Trade in value added• Merchanting of services• Topics for further work – research agenda

NIE Status of Guide

Patent Cliff

ESA 2010

Typology

• Agree the framework• Comprehensive

Economic Ownership

• Goods, Assets and Liabilities• Intellectual Property Products

Measurement Challenges

• Merchanting, Goods for Processing• Quasi Transit Trade, Multi territory Enterprises

Developments 2013 - 2014

TF consultation

with AEG

Chapters completed and edited

ISWGNA Consultation

UN Expert Classifications

Group

TF Internal Consultation

CES International

Interim Consultation

NIE QNA

Consultations ESA 2010

Consultation 1 AEG - Factoryless Goods Producers

OECD October 2013 10

PrincipalFGP

ContractManufacturer

(CME)Customer

Product

IPP - FGP

Material Inputs ?

Manufacturing Services – Contract manufacturer

Aspects of FGP Production

• FGP retains– Technical know-how – Product design

• FGP controls – Outcome of production process– Access and delivery of final outputs to

customers• CME supplies– Prespecified goods at predetermined prices

OECD October 2013 11

AEG Presentation and Decision

• “The Advisory Expert Group on National Accounts:…Agreed that factoryless producers — supplying intellectual property capital and marketing services, and controlling the production process while using contract manufacturers to produce goods — are to be considered goods producers and should not be classified in distributive services

OECD October 2013 12

Consultation 2 – ISWGNA and UN Expert Group on International Statistical

Classifications • the following guideline should be used to determine the

industry classification of FGPs:

• A principal that owns, or obtains a license to use, and supplies IPP inputs but no material inputs to a contractor but still manages (controls) the overall outcome of the production process should be classified to the manufacturing industry in a separate subset of existing classifications that highlights the factoryless characteristics of the firm.

• No response as yet

Consultation 3Internal TF Consultation

• Agree Typology incl. aspects of FGP activities• Nature of transactions between FGP and

Contract manufacturer: Good or Service• Treatment of branding • Programme for future work

Consultation 4Global Consultation on Interim Guide • 35 replies• General comments

• All responding respondents considered• the Guide is useful and comprehensive• the main recommendations clear and coherent• valuable for elaborating a programme for further work

• Three new case studies• Czech Republic, Philippines and Sweden

Outcome of the CES Plenary, April 2014• The Conference welcomed the Guide to measuring global

production

• The Conference agreed with the proposal of the Task Force to revise the Guide including the comments from the global consultation and the discussion at the CES 2014 plenary session.

• The Conference also agreed with the timetable for finalization of the Guide, as outlined in ECE/CES/2014/6/Add.1 Section IV.

• Clarity in the guidance on the treatment of factoryless goods producers.

• Importance of advancing the consultation on the industrial classification of factoryless goods producers. This could have a significant impact on the implementation of the 2008 SNA.

Outcome of the CES Plenary, April 2014

• The Conference supported the creation of a forum in the form of an expert meeting for exchanging practical experience on data collection and compilation methods in respect to global production arrangements. The Conference asked UNECE and the Group of Experts on National Accounts, jointly with Eurostat and OECD, to provide such a forum.

• An update of the Guide in 5 to 7 years from now should be envisaged to reflect new examples of good country practices.

• The Conference emphasized the importance that the Global Working Group on Internationalization created by the UN Statistical Commission should closely collaborate with the CES Task Force

Mandate & Objectives

Status of Guide

Consultation on FGP

Further Work

• Conceptual issues: global production arrangements related to services, open issues with factoryless goods producers, branding, goods-services split, transfer pricing

• Data issues: framework for collecting and sharing of data, including confidentiality issues

• Practical guidance: supplementary country case studies; a forum to exchange practical experience; review of the Guide in 5 to 7 years

Priorities for further work

Price and Volume

MeasurementData exchange

Shared compilation

methods

Refine/Expand typology Branding Merchanting

of Services

Transfer Pricing

Programme for Further Work

• The Task Force will– Review all comments and reflect them in the Guide

(face-to-face meeting on 9 May)– Receive feedback from UNECE/Eurostat/OECD Expert

Group on NA and from the September 2014 AEG meeting

– Expects feedback from the Expert Group on International Statistical Classifications on the classification of factoryless goods producers

Final consultation and submission to the CES in 2015

Finalization of the Guide

Questions

michael.connolly@cso.ie