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5489.0 - International Merchandise Trade, Australia, Concepts, Sources and Methods, 2001  
Latest ISSUE Released at 11:30 AM (CANBERRA TIME) 30/05/2001   
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Contents >> Chapter 8. Data Quality >> Accuracy and Reliability

Concepts

8.17 Accuracy is concerned with the proximity of an estimate of a data component to the true value of that component. Reliability refers to the differences between the initial estimate for a particular period or point in time, any intermediate estimates for that period or point in time, and the final estimate for that period or point in time. The notion of a final estimate is not strictly appropriate, as statistics are, in principle, always subject to further revision.

8.18 In an extreme case, estimated data could be completely inaccurate, but not subject to revision. This can occur where accurate information is never available, so the estimates are never revised. Alternatively, early estimates may be poor and subject to considerable revision, while highly accurate estimates may only be produced after long time lags.


8.19 In practice, the true value of a component is rarely able to be determined. Independent sources are also likely to include errors and omissions. For this reason it is not possible to comprehensively assess, in a quantitative manner, the accuracy of trade data. Nevertheless, the ABS considers the data published to be highly accurate, within the practical constraints governing the Customs source used. There is no evidence to suggest any substantial or persistent non-lodgement of records with Customs. As the statistics are not collected by sample survey, they are not subject to sampling errors.

8.20 In analysing the accuracy and reliability of Australia's international merchandise trade statistics, there are two aspects of interest that are not normally relevant or possible for other statistical series. Firstly, it is possible, and potentially more useful, to analyse the quality of information reported to Customs and passed to the ABS, rather than just focus on the differences between first and final estimates published by the ABS. Secondly, through the bilateral studies undertaken, it is possible to compare ABS trade data with that of the partner countries, providing an independent check on ABS data. The following analyses cover these aspects.

Bias and dispersion

8.21 Measures of bias and dispersion are used in this chapter to analyse ABS adjustments to the data reported to Customs (source data) prior to the initial publication of trade estimates, and the revisions subsequently made by the ABS to those initially published estimates.

8.22 Analyses of amendments or revisions are normally summarised using the mean (or average) difference observed. However, for ABS adjustments to source data, the mean differences are significantly affected by a relatively small number of very large errors in individual records. It is considered more appropriate to summarise these amendments using the median difference observed.

8.23 Mean differences are used for the analysis of revisions to initial published estimates, as the mean and median differences are similar due to the more typical pattern of revisions observed. The following definitions of bias and dispersion are expressed in terms of the use of mean differences, but broadly similar definitions apply for median differences.

8.24 Bias is a measure of the extent to which initial estimates are lower or higher than the final estimate and thus gives an indication of the direction of revisions. Unscaled bias is calculated as the average of the differences, over the observation period, between the initial estimate of a category for each month and the latest available estimate for the same month, with positive and negative revisions being netted against each other. This measure can be described as the average of the values of all revisions taking account of sign. Scaled bias is calculated by expressing the revision for each category as a percentage of the initial value of that category for the month, and then calculating the average of these percentage revisions.

8.25 Dispersion is a measure of the 'spread' between the initial and final estimates and indicates the magnitude of revisions. Unscaled dispersion is calculated as the average of the differences, over the observation period, between the initial estimate for each month and the latest available estimate for the same month, however positive and negative revisions are not netted against each other. This measure can be described as the average of the absolute values of all revisions, without regard to sign. Scaled dispersion is calculated as the average of the absolute value of the percentage revisions.

8.26 As measurements of dispersion are based on absolute values, the value of dispersion measures is generally larger than the equivalent measure of bias. Only if all revisions were in the same direction, would the results be the same for both measures. The larger the difference between the absolute values of the two measures for a particular series, the greater the variability in the direction of revisions.

Source data

8.27 ABS amendments to individual source records fall into two broad categories. Firstly, some source records are excluded from the scope of international merchandise trade statistics for the reasons outlined in Chapter 2. Secondly, ABS quality assurance procedures detect and correct errors, and sometimes omissions, in the records lodged with Customs. It is not possible to separate these two aspects in this analysis.

8.28 Different strategies and emphases are adopted by Customs and the ABS in addressing data quality issues. For the ABS, it is critical that large value errors are detected and corrected in time for publications and other releases for a given month. Not to do so would potentially mislead financial markets and other users of the data.

8.29 For Customs, matters relating to community protection concerns and collection of import duties and taxes have more immediate priority. Customs has its own procedures for detecting and correcting errors in export and import transactions. Customs and ABS work closely together to address any serious or systemic data reporting problems that are identified.

8.30 The following analysis of ABS amendments to source data summarises the impact of ABS input-editing procedures on the data initially provided by exporters and importers, before output-editing and finalisation of monthly processing. Amendments supplied by exporters and importers during the processing period have been excluded from this analysis. The observation period is from July 1996 to June 2000. For exports, data for all 48 months was used. For imports, some monthly amendments were not retained, so the data refers to only 45 of the possible 48 months in the observation period.

8.1 ABS AMENDMENTS TO SOURCE DATA, MERCHANDISE EXPORTS - JULY 1996 TO JUNE 2000


MEDIAN
REVISIONS




Bias (b)
Dispersion (b)




Commodity group
Section of SITC (Rev3)
Average Source Estimate (a)
Unscaled
Scaled
Unscaled
Scaled
$m
$m
%
$m
%






0 Food and live animals
1,506.08
-37.40
-2.42
37.40
2.43
1 Beverages and tobacco
95.40
-0.06
-0.05
0.24
0.29
2 Crude materials, inedible, except fuels
3,033.90
-19.25
-1.32
24.07
1.65
3 Mineral fuels, lubricants and related materials
1,230.71
44.99
3.72
49.26
3.77
4 Animal and vegetable oils, fats and waxes
26.26
-
-
0.17
0.77
5 Chemical and related products, n.e.s.
379.33
-7.34
-2.04
7.34
2.04
6 Manufactured goods classified chiefly by material
1,647.90
-15.51
-1.57
16.51
1.75
7 Machinery and transport equipment
1874.35
-118.59
-10.88
118.59
10.88
8 Miscellaneous manufactured articles
360.31
-54.84
-16.76
54.84
16.76
9 Commodities and transactions n.e.c. in the SITC
929.54
24.59
2.90
62.44
8.74






Total Exports
11,083.79
-487.64
-6.41
487.64
6.41


(a) The Average Source Estimate represents the average monthly value of merchandise exports reported by exporters or their agents to Customs. It includes both manifested shipments, and large value unmanifested shipments which have been confirmed by the ABS prior to processing finalisation.
(b) See paragraphs 8.24 and 8.25 for an explanation of bias and dispersion.

8.31 Amendments to monthly merchandise exports, as initially reported by exporters or their agents to Customs, shows a median negative bias of $488 million or 6.4% of the average source estimate (Table 8.1). The negative bias indicates that source data generally overstates initial ABS estimates. Errors in source records can occur in both directions, but they more commonly and significantly overstate the true value. Overstated values are also more easily detected by the quality assurance procedures used by the ABS, than understated values.

8.32 Customs has recently made a number of changes to its procedures, which it expects will significantly reduce the incidence of data errors in source records. Further improvements are planned. These will particularly focus on managing compliance for exports which are GST free under The New Tax System (TNTS).

8.33 Most SITC sections recorded a negative bias, with the exception of Sections 3, 4 and 9. The negative amendments were mostly due to errors in the f.o.b. value reported to Customs, which were identified and corrected by the ABS during the editing of large value transactions. The largest negative bias, for Section 7 Machinery and transport equipment, reflects the amendment by the ABS of ship and aircraft transactions reported as merchandise exports, to non-merchandise. The positive bias for Section 3 Mineral Fuels, lubricants and related materials is due to the ABS inclusion of estimates for aircraft fuel consumed by foreign aircraft on international routes. Customs records for these goods are currently incomplete. The positive bias for Section 9 Commodities and transactions n.e.c. in the SITC reflects the effect of the coverage adjustment made by ABS to account for unconfirmed low-value shipments (as explained in paragraph 5.33), partially offset by reported f.o.b. value errors.

8.2 ABS AMENDMENTS TO SOURCE DATA, MERCHANDISE IMPORTS - JULY 1996 TO JUNE 2000


MEDIAN
REVISIONS




Bias (b)
Dispersion (b)




Commodity group
Section of SITC (Rev3)
Average Source Estimate (a)
Unscaled
Scaled
Unscaled
Scaled
$m
$m
%
$m
%






0 Food and live animals
330.51
-2.54
-0.69
2.73
0.75
1 Beverages and tobacco
51.20
-
-
-
-
2 Crude materials, inedible, except fuels
138.02
-
-
0.01
0.01
3 Mineral fuels, lubricants and related materials
558.26
-1.51
-0.35
3.31
0.63
4 Animal and vegetable oils, fats and waxes
22.86
-
-
-
-
5 Chemical and related products, n.e.s.
958.63
-0.51
-0.05
0.96
0.09
6 Manufactured goods classified chiefly by material
1,045.98
0.03
-
2.45
0.24
7 Machinery and transport equipment
3,833.22
-85.78
-2.38
88.27
2.38
8 Miscellaneous manufactured articles
1,224.45
-33.77
-2.91
33.77
2.91
9 Commodities and transactions n.e.c. in the SITC
176.41
-
-
0.05
0.02






Total Imports
8,339.55
-285.06
-3.20
285.06
3.20


(a) The Average Source Estimate represents the average monthly value of merchandise imports which have been processed by Customs during a month.
(b) See paragraphs 8.24 and 8.25 for an explanation of bias and dispersion.

8.34 Amendments to monthly merchandise imports, as initially reported by importers to Customs, shows a median negative bias of $285 million, or 3.2% of the average source estimate (Table 8.2). The negative bias indicates that the source data generally overstated the initial ABS estimate. The size of the amendments for imports is much less than for exports, due largely to the better quality data received. Import records are subject to greater scrutiny by both Customs and importers due to duty and tax implications, and community protection concerns.

8.35 A negative bias was recorded for five commodity groups. While these are mostly attributable to errors in the values of records reported to Customs, Section 7 Machinery and transport equipment was also affected by the classification of temporary imports of aircraft and ships as non-merchandise trade by the ABS. In some cases those submitting import documentation do not apply the correct non-merchandise codes. Section 6 Manufactured goods classified chiefly by material recorded a small positive bias, while the remaining categories registered no bias.

8.36 The size of the amendments made by the ABS to export and import data received, during the period analysed, indicates the importance of ABS procedures to ensure the correct scope and adequate data quality for its international merchandise trade statistics. The amendments made are often significant in both absolute and percentage terms. As some key users focus attention on movements in the balance of trade, it is critical that all substantial errors in export and import source data are corrected before the data are published by the ABS.

Published trade statistics

Analysis of monthly output

8.37 The following analysis provides an assessment of the reliability of published international merchandise trade statistics. The observation period is from July 1995 to June 2000 (60 months). The analysis measures the mean bias and dispersion between the average initial monthly published result for the observation period, and the average final published result. Trade statistics are considered to be final once the ABS ceases to process amendments for the reference period. Similar analyses, covering earlier periods, can be found in Quality of Australia's Foreign Trade Statistics published in the March Quarter 1993 edition of Cat. no. 5422.0, and Quality of Australia's International Merchandise Trade Statistics published in the September Quarter 1995 edition of Cat. no. 5422.0.

8.3 AMENDMENTS TO INITIAL MONTHLY PUBLISHED ESTIMATES, MERCHANDISE EXPORTS - JULY 1995 TO JUNE 2000


MEAN
REVISIONS




Bias (a)
Dispersion (a)




Commodity group
Section of SITC (Rev3)
Average Initial Published Estimate
Unscaled
Scaled
Unscaled
Scaled
$m
$m
%
$m
%






0 Food and live animals
1,316.03
17.70
1.35
19.94
1.52
1 Beverages and tobacco
86.37
1.97
2.52
1.98
2.53
2 Crude materials, inedible, except fuels
1,386.68
9.97
0.75
12.63
0.94
3 Mineral fuels, lubricants and related materials
1,228.93
3.15
0.25
8.70
0.70
4 Animal and vegetable oils, fats and waxes
24.41
0.32
1.60
0.44
2.00
5 Chemical and related products, n.e.s.
279.34
6.31
2.31
6.31
2.31
6 Manufactured goods classified chiefly by material
857.13
11.92
1.45
13.46
1.62
7 Machinery and transport equipment
874.91
15.02
1.84
18.14
2.14
8 Miscellaneous manufactured articles
259.51
8.75
3.37
8.76
3.37
9 Commodities and transactions n.e.c. in the SITC
780.64
-69.37
-9.35
70.47
9.54






Total Exports
7,093.93
5.76
0.09
23.99
0.35


(a) See paragraphs 8.24 and 8.25 for an explanation of bias and dispersion.

8.38 Revisions to the initial published monthly export estimates were upwards, on average, as indicated by the positive bias, but averaged only $6 million or less than 0.1% of the average monthly estimate for total exports over the period (Table 8.3). The dispersion measures were somewhat higher, indicating that the individual monthly revisions were both positive and negative. The average magnitude of revisions to total exports, without regard to sign, was $24 million or 0.4% of the average monthly estimate.

8.39 All SITC sections, except Section 9 Commodities and transactions n.e.c. in the SITC, showed a positive bias. Downward revisions to Section 9 predominantly reflect the incorporation of a coverage adjustment (allocated to Section 9) in the initial monthly estimate, as explained in Chapter 5. The coverage adjustment is removed within 2 months of the initial release of export statistics. By this time, the vast majority of exports are finalised, with the goods correctly recorded under the relevant SITC category.

8.4 AMENDMENTS TO INITIAL MONTHLY PUBLISHED ESTIMATES, MERCHANDISE IMPORTS - JULY 1995 TO JUNE 2000


MEAN
REVISIONS




Bias (a)
Dispersion (a)




Commodity group
Section of SITC (Rev3)
Average Initial Published Estimate
Unscaled
Scaled
Unscaled
Scaled
$m
$m
%
$m
%






0 Food and live animals
284.47
-0.25
-0.09
0.27
0.10
1 Beverages and tobacco
48.57
-0.10
-0.21
0.14
0.30
2 Crude materials, inedible, except fuels
135.47
-0.03
-0.02
0.24
0.18
3 Mineral fuels, lubricants and related materials
435.08
1.38
0.25
5.70
1.21
4 Animal and vegetable oils, fats and waxes
22.78
-0.04
-0.16
0.06
0.28
5 Chemical and related products, n.e.s.
870.52
-1.58
-0.17
2.72
0.30
6 Manufactured goods classified chiefly by material
1,014.90
-1.52
-0.14
1.56
0.14
7 Machinery and transport equipment
3,535.56
-2.07
-0.06
11.00
0.30
8 Miscellaneous manufactured articles
1,098.28
-1.77
-0.16
1.87
0.17
9 Commodities and transactions n.e.c. in the SITC
146.05
0.46
1.83
2.27
2.96






Total Imports
7,591.67
-5.51
-0.07
16.11
0.21


(a) See paragraphs 8.24 and 8.25 for an explanation of bias and dispersion.

8.40 Revisions to the initial published monthly import estimates were downwards, on average, as indicated by the negative bias, but averaged only $6 million or less than 0.1% of the average monthly estimate for total imports over the period. The dispersion measures were again somewhat higher, indicating that the individual monthly revisions were both positive and negative. The average magnitude of revisions to total imports, without regard to sign, was $16 million or 0.2% of the mean monthly estimate.

8.41 All SITC sections, except Section 3 Mineral fuels, lubricants and related materials and Section 9 Commodities and transactions n.e.c. in the SITC, showed a negative bias. The main reason for the downward revisions was the re-classification of some imports from merchandise to non-merchandise trade, as the result of advice received in a later month indicating that the import was temporary rather than permanent.

Analysis of quarterly and annual output

8.42 The initial and latest published estimates of total merchandise exports and imports for the most recent 11 financial years and 17 quarters are shown in Table 8.5. The figures are as at the release of December quarter 2000 international merchandise trade results. Consequently, the initial and latest estimates for December quarter 2000 are identical and so are excluded.

8.5 ANALYSIS OF PUBLISHED MERCHANDISE ESTIMATES 1989-90 to 2000-01


EXPORTS
IMPORTS






Initial
Estimate
(a)
$m
Latest
Estimate
(b)
$m
Revision
%
Initial
Estimate
(a)
$m
Latest
Estimate
(b)
$m
Revision
%







Year
1989-90
1990-91
1991-92
1992-93
1993-94
1994-95
1995-96
1996-97
1997-98
1998-99
1999-00
48,746
52,454
55,021
60,773
64,611
67,036
75,951
78,885
87,734
86,000
97,255
49,078
52,399
55,027
60,702
64,548
67,052
76,005
78,932
87,768
85,991
97,286
0.7
-0.1
-
-0.1
-0.1
-
0.1
0.1
-
-
-
51,323
48,919
51,000
59,586
64,469
74,638
77,834
78,977
90,685
97,623
110,083
51,333
48,912
50,984
59,575
64,470
74,619
77,792
78,998
90,684
97,611
110,078
-
-
-
-
-
-
-0.1
-
-
-
-







Quarter
September 1996
December 1996
March 1997
June 1997

September 1997
December 1997
March 1998
June 1998

September 1998
December 1998
March 1999
June 1999

September 1999
December 1999
March 2000
June 2000

September 2000
19,088
19,816
19,048
21,069

21,452
23,152
20,291
22,850

22,827
22,994
19,870
20,316

21,895
24,856
23,835
26,656

28,500
18,983
19,767
19,077
21,104

21,523
23,086
20,287
22,872

22,830
22,996
19,873
20,293

21,895
24,832
23,876
26,682

28,537
-0.6
-0.2
0.2
0.2

0.3
-0.3
-
0.1

-
-
-
-0.1

-
-0.1
0.4
0.1

0.1
19,854
20,589
18,492
20,049

21,811
23,065
22,261
23,567

25,633
25,432
23,056
23,626

26,076
28,782
26,383
28,803

30,406
19,873
20,571
18,482
20,073

21,821
23,042
22,252
23,569

25,594
25,357
23,041
23,619

26,017
28,839
26,411
28,810

30,324
0.1
-0.1
-0.1
0.1

-
-0.1
-
-

-0.2
-0.3
-0.1
-

-0.2
0.2
0.1
0.2

-0.3


(a) Published in the first issue of International Merchandise Trade Australia (Cat. no. 5422.0) relating to the reference period.
(b) Latest estimates sourced from the December quarter 2000 issue of Cat. no. 5422.0.

8.43 The latest annual results closely align with the initial estimates published, with the exception of exports for 1989-90. The 0.7% upward revision to exports in this year was the result of a combination of factors, but was mainly due to the late receipt of some export documentation, which came in progressively over the following six months. This was partially offset by a reduction of approximately $180 million which was applied in April 1992, as the result of moving exports to a shipping date basis.

8.44 Quarterly results are more volatile, for both imports and exports. The revision to September quarter 1996 exports was significantly larger than for other quarterly results, as a number of high value shipments had originally been classified as merchandise trade, rather than correctly to non-merchandise trade. For further information, see the technical note in International Trade in Goods and Services, Australia June 1997 (Cat. no. 5368.0).

Conclusion

8.45 Initial published estimates of monthly, quarterly and annual merchandise exports and imports are very close to the final estimates. This indicates that the ABS does not detect many substantial errors in the data after its initial publication. Australia's international merchandise trade statistics can therefore be considered to be highly reliable. It is more difficult, however, to ascertain whether ABS statistics accurately represent the true value of Australia's exports and imports: an analysis of partner country comparisons gives an indication of how well ABS merchandise trade statistics align with those of overseas statistical agencies.

Partner country comparisons

8.46 Many countries compile international merchandise trade statistics on bases largely consistent with the UN recommendations adopted by the ABS. It is therefore possible to compare the export and import statistics of one such country against the reciprocal import and export statistics of another complying partner country. Any differences in concepts and methods, such as coverage, valuation and country classification, need to be allowed for. Analyses of this kind are usually referred to as bilateral reconciliation studies, and at the broad aggregate level, can provide a useful indication of the accuracy of the statistics.

8.47 If identical concepts and definitions are applied by each country to both imports and exports, and there is no time difference between the recording of the export by one country and the import by the other, Australian exports to other countries should be identical to those countries' imports from Australia and vice versa. However, there are many reasons why international merchandise trade statistics may not fully reconcile. The possible causes of differences, resulting in the need to apply adjustments to compensate for them, include:
  • Coverage: some goods that fall within the scope of merchandise trade are omitted from statistics, as customs entries are not required e.g. the application of different minimum threshold limits by individual countries.

  • Valuation: any differences in the point of valuation used by partner countries may have systematic, compounding effects on trade comparisons. The UN recommends that export transactions should be valued on a 'free on board' (f.o.b.) basis, and imports transactions on a 'cost, insurance and freight" (c.i.f.) basis. It also recommends that the value of insurance and freight for imported goods should be separately identified, where possible. If a partner country does not compile separate information on the freight and insurance component of the c.i.f. value, it will be necessary to estimate this for the purposes of any reconciliation study.
  • Country classification: if UN recommendations regarding the recording of trade are followed, statistics on trade between two partner countries should be symmetrical when exports are shipped directly from the country of origin to the country of final destination. Discrepancies can occur when goods are moved through intermediate countries, or where the final destination of the goods is not known. In Australia, the Customs Act 1901 and associated regulations specify the criteria (the Rules of Origin) to be met when determining the country of origin of a good. These are further explained in Chapter 2.
  • Timing: to compensate for the time lag between a shipment departing from one country, and arriving in another, a shipping adjustment is needed to cover goods exported at the end of one time period, but imported at the beginning of the next time period. Any time lag between the arrival / departure of goods and their recording in a country's trade statistics will also impact on comparability. On most occasions there is a small difference year by year, but it can impact on comparisons for less frequently traded, high value, items.
  • Exchange rate: as analysis of bilateral merchandise trade data is carried out in a common currency, the conversion of data using an average annual exchange rate can contribute to data discrepancies. These discrepancies cannot easily be quantified, except in relation to large value transactions.
  • Domestic territory: as merchandise trade statistics are collected by the national customs agency, it is important to know the definition of each customs territory. Where domestic and foreign definitions of a country's territory differ, an adjustment is necessary to account for over or under coverage of trade with the identified region.
  • Commodity classification: most countries classify their merchandise trade transactions according to the Harmonized System (HS), which provides an adequate base for the broad comparisons investigated in bilateral reconciliation studies. For those countries that have extended the HS to provide a classification system tailored to local needs, then classifications at the most detailed levels will not be harmonised.
  • Confidentiality: Australia, amongst other countries, protects confidential data by reclassifying the data from Chapters 1 to 97 of the Harmonized System to a dump code. Confidentiality does not affect data comparability at the total trade level and therefore no adjustments are required. At more detailed levels of the HS, confidentiality may be a contributing factor to differences in comparability.
  • Data errors: reporting errors, data entry errors, and mistakes made during editing and processing of data are likely to occur with any merchandise trade statistics. However their impact at the total trade level is believed to be relatively minor for the countries with which Australia records most trade.
  • Other differences: after conceptual adjustments have been made, discrepancies between the partner countries' data may remain. Reasons for these discrepancies may include: goods that cross one country's customs frontier, but not the other's; differences in interpretation of the merchandise trade definitions; and omissions from one country's statistics.

8.48 Over the past 10 years, the ABS has completed bilateral reconciliation studies of international merchandise trade statistics with the relevant agencies in the United States of America (USA), Japan, the European Union (EU) and New Zealand. The results of these studies are summarised in Tables 8.6 and 8.7.

8.49 The 'initial difference' shown in the tables represents (i) the gap between Australia's recorded merchandise exports to the partner country, as published, and the partner country's recorded merchandise imports from Australia, as published (Table 8.6), and (ii) the difference between Australia's recorded merchandise imports from the partner country, as published, and the partner country's recorded merchandise exports to Australia, as published (Table 8.7).

8.50 The 'residual discrepancy' is the discrepancy remaining between the two sets of statistics after all the known conceptual and methodological adjustments (listed above) have been made. Possible reasons for the residual discrepancy include problems associated with correct country attribution; other valuation differences; additional timing differences; minor coverage differences; currency conversion practices and data errors.

8.6 SUMMARY OF BILATERAL RECONCILIATION STUDIES - AUSTRALIA'S MERCHANDISE EXPORTS



Bilateral Reconciliation StudyAustralia's Merchandise ExportsPartner Country's Merchandise Imports
Initial Difference
Residual Discrepancy
Year
($m)
($m)
%
%






Australia/USA
1991
5,369
5,242
-2.4
-4.2
1992
5,134
5,078
-1.1
-2.2
1993
5,071
4,876
-3.8
-3.9
1994
4,651
4,398
-5.4
-6.3
Australia/New Zealand
1993
3,691
2,814
-23.8
-6.1
1994
4,390
3,244
-26.1
-7.7
1998
5,691
4,120
-27.6
-5.6
Australia/Japan
1994
15,992
18,794
17.5
-0.1
Australia/EU
1992
7,711
8,721
13.1
3.1
1993
7,476
7,159
-4.2
-4.1
1994
7,247
7,979
10.1
3.2
1995
8,007
8,813
10.1
2.4
1996
8,381
8,526
1.7
-3.2
1997
8,678
9,570
10.3
-0.4







8.51 In each year studied, Australia's exports to the USA exceeded the USA's imports from Australia, and the residual discrepancy was greater than the initial difference. A negative adjustment to take account of Australia's re-exports to the USA, of goods that were originally imported from third countries and the USA, was more than offset by positive adjustments to account for:
  • Australian origin goods imported by the USA from third countries (USA indirect imports);
  • USA re-imports. In the USA's statistics these are included as imports from Australia, but in Australia's statistics they are classified as re-exports; and
  • differences in timing.

8.52 Australia's exports to New Zealand were higher than New Zealand's imports from Australia in 1993, 1994 and 1998. The reconciliation studies found that the most important difference between the statistics was the inclusion, in Australia's export statistics, of goods originally produced in third countries (re-exports). These are not included in New Zealand's imports of Australian origin goods. The 1998 study identified further Australian re-exports that were recorded as exports to New Zealand of Australian produce. To reduce the incidence of this error, an Australian Customs Notice was issued to the exporting community. New edit checks were added to ABS data quality procedures to capture and correct such errors prior to the release of statistics.

8.53 The main reason for the large initial difference between the value of Australia's exports to Japan, and Japan's imports from Australia, is the basis of valuation. Australia's exports are valued on an f.o.b. basis, but Japan's imports are valued on a c.i.f. basis. This difference in valuation was measured for the 1994 bilateral study. The adjustments that were applied resulted in a residual discrepancy of only -0.1%.

8.54 In all years studied, except 1993, Australia's recorded exports to the EU were lower than the EU imports from Australia. After adjusting for the known differences between Australia's exports and the EU's imports, the residual discrepancies were comparatively small. The largest adjustments were:
  • the difference between the value of EU imports being recorded on a c.i.f. basis and Australia's exports being recorded on an f.o.b. basis;
  • the value of EU indirect imports;
  • the value of EU re-imports;
  • the value of some non-monetary gold that was not included in EU imports; and
  • the value of Australia's re-exports.
8.7 SUMMARY OF BILATERAL RECONCILIATION STUDIES - AUSTRALIA'S MERCHANDISE IMPORTS


Bilateral Reconciliation StudyAustralia's Merchandise ImportsPartner Country's Merchandise Exports
Initial Difference
Residual Discrepancy
Year
($m)
($m)
%
%






Australia/USA
1991
11,897
10,792
-9.3
-2.5
1992
12,379
12,221
-1.3
-0.7
1993
13,187
12,239
-7.2
-2.5
1994
14,839
13,435
-9.5
-4.8
Australia/New Zealand
1993
3,035
3,116
2.7
-1.6
1994
3,382
3,564
5.4
-1.8
1998
3,823
4,018
5.1
-1.1
Australia/Japan
1994
12,100
11,986
-0.9
0.6
Australia/EU
1992
12,698
12,758
0.5
n.a. (a)
1993
13,818
13,649
-1.2
n.a. (a)
1994
16,026
15,671
-2.2
n.a. (a)
1995
19,436
18,610
-4.2
n.a. (a)
1996
19,482
18,761
-3.7
n.a. (a)
1997
20,291
20,039
-1.2
n.a. (a)







(a) The Australia/ EU bilateral study was limited to an examination of Australia's exports to the EU and the EU's imports from Australia. The stability and small magnitude of the initial difference between Australia's imports from the EU and the EU's exports to Australia suggests the data were likely to be relatively accurate, and not worth the resources that would be expended on a detailed reconciliation study.

8.55 For each of the four years studied, Australia's recorded merchandise imports from the USA were higher than the USA's recorded exports to Australia. The most important reasons for this were the different treatment of low value records and the inclusion of indirect imports in Australia's statistics. The USA employs a higher minimum threshold for the reporting of trade. Indirect imports are Australia's imports of USA origin goods from third countries. These are included in Australia's imports of USA origin goods, but will not generally be included in the USA's exports to Australia. Table 8.7 shows that the two sets of statistics more closely align once these and other smaller value differences are taken into account.

8.56 The most significant difference between New Zealand's export statistics and Australia's import statistics is the inclusion of re-exports in New Zealand's statistics. As these goods originate in third countries, they are not normally included in Australia's imports from New Zealand.

8.57 The initial difference and the residual discrepancy between Australia's imports from Japan and Japan's exports to Australia, during 1994, although small, are in opposite directions. The main differences in the statistics were due to:
  • the treatment of low value trade;
  • the inclusion of indirect imports of Japanese origin goods in Australia's statistics; and
  • the inclusion of re-exports of goods produced or manufactured in third countries in Japan's export statistics. These goods are not normally included in Australia's imports from Japan.

8.58 In each of the bilateral studies a timing adjustment was made, to take account of merchandise that was likely to have been recorded in different years in the statistics of the exporting and importing countries. Other reasons for differences in the statistics of each agency that were identified during the reconciliation studies included differences in:
  • the treatment of aircraft and satellites;
  • leased goods;
  • currency conversion practices; and
  • the definition of domestic territory.

Conclusion

8.59 The bilateral reconciliation studies have demonstrated that the main reasons for differences in the international merchandise trade statistics of Australia and its major trading partners are due to the conceptual and methodological factors underlying the compilation of the data. Actual data errors in the compilation process proved to be relatively insignificant in comparison. The adjustments do not represent revisions to the official published statistics of either country, nor do they imply in general, errors in either country's published statistics.

8.60 The magnitude of the residual discrepancies encourages a reasonable level of confidence in the accuracy of Australia's (and the partner country's) international merchandise trade statistics, at least at the aggregate level. At the detailed level it is more difficult to make comparisons. One of the reasons for this is due to Australia's treatment of confidential data, which can affect comparability at all levels of the commodity classification. More details on these bilateral reconciliation studies can be found in various issues of the quarterly publication International Merchandise Trade, Australia (Cat. no. 5422.0) or on the ABS Web site at http://www.abs.gov.au.

Methodological changes

8.61 Methodological changes affect the comparability of data before and after the changes are implemented. They are generally directed towards improving the overall quality of the statistics. Methodological changes can result in one-off revisions to statistical series that may be substantial. One change that had an appreciable impact on trade statistics was the change made, in April 1992, to the time of recording for merchandise exports, from one based primarily on the date of processing through Customs, to one based on the date of shipment from Australia.

8.62 Up until April 1992, the nature of document processing by Customs meant that, historically, only about half of any month's export shipments were recorded in the month of shipment. At the time of changeover to the new methodology, statistics for all months back to and including January 1988 were revised to the (new) shipping date basis, and broad aggregates back to July 1981 were recompiled. As a result, from January 1988, exports are recorded in the calendar month in which the goods departed from Australia. Prior to January 1988, exports are recorded in the month in which the entries are processed by Customs (other than for broad aggregates back to July 1981).

8.63 A less significant change was implemented on 1 July 1998, when there was a change made to the value threshold used in the processing of import entries. Analysis had shown that the costs incurred in editing, processing and storing small value records were not justified by the minimal impact these records had on aggregate import data. As a result, individual transaction lines (within an import consignment) where the value of the goods are less than $250 are no longer processed, and are excluded from international merchandise import statistics. These omissions total about $20 million per month.

8.64 Changes in methodology and/or major classifications are advised at least one quarter prior to publication. Significant changes have been notified up to twelve months in advance. Information on the impact of the change is provided. All subscription clients are also notified in writing of major changes prior to their implementation.

Valuation practices and currency conversions

8.65 The value of exports is the free on board (f.o.b.) transactions value of the goods expressed in Australian dollars. Exporters who do not know the actual value of the goods at shipment enter an approximate value. They are required to subsequently submit an entry either confirming or revising the estimated value, although this sometimes may not occur. By carefully checking all large value transactions, most cases of significant over-valuation error are detected and corrected by the ABS, prior to publication of the statistics. Significant under-valuation, and smaller value inaccuracies, however, may not be detected by Customs and ABS quality checking procedures and may therefore contribute to inaccuracies in the statistics.

8.66 Any currency conversion errors remaining in published statistics will be minor due to the proportion of exports and imports invoiced in Australian dollars. A study of invoice currencies in the March quarter 1998 issue of International Merchandise Trade, Australia (Cat. no. 5422.0)), found that almost one third of Australia's exports and about one quarter of Australia's imports were invoiced in Australian dollars. The predominant invoice currency was the US dollar, accounting for just over two thirds of total Australian exports, and about one half of total Australian imports.

8.67 The degree of inaccuracy in import data as a result of the incorrect invoice currency being reported to Customs was investigated in 1995. The value of imports for the calendar year 1995 would have been 0.7 percent higher had currency errors not been detected and amended for import entries with Customs values greater than $A500,000 (i.e. the tendency is to overstate the value, due to errors made in reporting).

Revisions policy

8.68 ABS practice for trade statistics is to revise any records as soon as possible after an amendment advice has been received, or a significant error has been detected. Individual entries are retained on the transactions database for this purpose for a limited time. Exports data are retained for 6 months, while imports data are retained for 3 months. Revisions beyond these periods are only made in exceptional circumstances. Most potential revisions are detected within the first few months and this policy is likely to have minimal effect on the eventual quality of the statistics.

8.69 Revisions made to broad aggregates are not normally significant, but there may be significant changes made to individual commodity statistics. A brief summary of the revisions that have occurred between the current and previous quarterly release, and their impact on broad aggregates, is provided on the Notes page of International Merchandise Trade, Australia (Cat. no. 5422.0).


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