1.1 The ABS has produced statistics about Australia's trade with the rest of the world since early in the twentieth century. In more recent years the use of common classifications and concepts has promoted international comparability. Advances in technology have also enabled and enhanced the accessibility of the statistics with considerable information now available from the ABS website.

1.2 Australia's international merchandise trade statistics are compiled in broad agreement with the United Nations (UN) standard which provides the international framework under which the statistics are compiled. The statistics are mainly sourced from information provided by the Department of Home Affairs (formerly the Department of Immigration and Border Protection) when goods are exported from or imported into Australia.

1.3 Australia's international merchandise trade statistics are used extensively by governments, businesses, organisations, researchers and other individuals in Australia and overseas. The way the statistics are used varies from monitoring the value and quantity of particular products exported from or imported into Australia, to the development of national and international trade policy. The statistics are a key input to Australia's balance of payments, national accounts and producer price indexes.

1.4 Users of Australia's international merchandise trade statistics should read this publication to gain a deeper understanding of the: 

• conceptual framework under which the statistics are compiled
• data sources and methods used to compile the statistics
• data quality and any limitations on the use or analysis of these statistics
• main statistical outputs and their relationship to other economic statistics produced by the ABS and other statistical organisations.

1.5 The ABS first published international merchandise trade statistics in 1907 with the publication: Trade and Customs and Excise Revenue of the Commonwealth of Australia, 1906 (cat. no. 5409.0). The annual publication contains 449 pages, covering detailed information for the year 1906, and comparative tables for the years 1902-1905. These statistics were originally compiled from information provided by the Department of Trade and Customs and are now provided by the Department of Home Affairs. Values in pounds, quantity, duty rates and duty paid by commodities traded between Australia and its trading partners were included in the publication. Surpluses and deficits were also calculated.

1.6 In August 1917, monthly statistics about Australia's imports and exports were first published. Over the years the statistics were gradually refined with improvements to composition, timeliness and accessibility.

1.7 An important date in the history of Australia's merchandise trade statistics is 1 January 1988, which marks the introduction of the Harmonized Commodity Description and Coding System (HS) for classifying import and export commodities. Most of Australia's trading partners introduced the HS at the same time, which was a vital step towards enabling consistent international comparisons of merchandise trade statistics. To ensure its continued relevance the HS is updated every five years. Time series users of detailed commodity data should note that there were changes to the HS 6-digit classification in January 1992, July 1996, January 2002, January 2007, January 2012 and January 2017.

1.8 From April 1992, exports are recorded on a month of departure basis. To enable a consistent time series this change is backdated to January 1988 with some backcasting to July 1981 for broader aggregates. Prior to this, exports were recorded in the month the declarations were processed by then Australian Customs Service (now Department of Home Affairs).

1.9 In December 2005, the Australian Government announced that all statistics on the ABS website could be accessed free of charge as an ABS Centenary tribute to the people of Australia. This includes all post-1998 publications (including copies of some annual historical publications) and spreadsheets. Access to free statistics for international merchandise trade is via International Merchandise Imports, Australia (cat. no. 5439.0) and International Trade in Goods (cat. no. 5368.0).

1.10 For more information about the early history of international merchandise trade statistics see the Feature article: 100 Years of International Trade Statistics published in the October 2007 issue of International Trade in Goods and Services, Australia (cat. no. 5368.0).

1.11 For more information about changes which affect time series see Appendix 2 under the Data Downloads section of this publication.

1.12 The ABS considers the primary purpose of international merchandise trade statistics is to provide a high quality essential input to Australia’s balance of payments, and other macroeconomic statistics. The ABS also recognises the ongoing demand for international merchandise trade statistics from a wide variety of organisations. These include: government departments (for developing and monitoring of economic, trade or infrastructure policies); research conducted by the public, private and academic sector; and international organisations, such as the United Nations Statistics Division (UNSD) and the Organisation for Economic Co-operation and Development (OECD), for the creation of global datasets.

1.13 The conceptual framework followed for Australia's international merchandise trade statistics is largely consistent with the international standards set out in the UN publication International Merchandise Trade Statistics: Concepts and Definitions Series M, No. 52, Rev. 3 (IMTS 2010). International merchandise trade statistics are an important part of the body of macroeconomic statistics produced by the ABS. The compilation of international merchandise trade statistics is therefore also influenced by the requirements of the international standards adopted for these statistics i.e. System of National Accounts, 2008 (2008 SNA) and Balance of Payments and International Investment Position Manual sixth edition (BPM6).

1.14 The majority of changes to the international standards introduced with IMTS 2010 move the international merchandise trade concept closer to the balance of payments basis. The ABS considers that in order to meet the range of users needs, it is important to maintain the statistical series of merchandise trade on the basis of International Merchandise Trade Statistics: Concepts and Definitions, Revision 2. Changes to align with a balance of payments basis would result in statistics that no longer cater for the needs of many data users. For a fuller explanation of the different bases see the Relationship with Other ABS Macroeconomic Statistics chapter (paragraphs 12.3-12.9) of this publication.

1.15 The main purpose of this publication is to provide users with an in-depth understanding of international merchandise trade statistics as an aid to more effective use and interpretation of the statistics. A detailed understanding of the underlying conceptual framework, and of the sources and methods used to compile the statistics, should enable users to make better judgements about the economic significance, quality and accuracy of the statistics. To achieve this aim, this publication provides an updated account of the concepts, sources and methods used to compile Australia's international merchandise trade statistics.

1.16 While some users may only require a broad understanding of the conceptual framework and how the data are compiled (e.g. school students or journalists), other users - such as the Department of Foreign Affairs and Trade - will use the publication to obtain a detailed understanding of the conceptual framework and methods used to compile the statistics (and how these differ from related statistics in the balance of payments).

1.17 The following paragraphs broadly describe the contents of each chapter. Users can navigate to these chapters by clicking on the relevant links in the navigation list on the left hand side of the Summary tab. Included throughout this publication are links to external websites but as these can quickly get out of date, the link provided is to the nearest main page. Users who have difficulty accessing links should send an email to: international.trade@abs.gov.au.

1.18 A number of appendices are also included to provide supplementary information about the classifications or definitions and to summarise detailed information about the statistical framework and statistical outputs. The Appendices may contain tables which can be viewed online or printed.

1.19 Scope, Coverage and Treatments describes the scope and coverage of Australia's international merchandise trade statistics. The treatment of unusual or complex cases is also explained.

1.20 Trade System, Valuation and Time of Recording explains the general and special trade systems, valuation, currency conversion and time of recording of Australia's import and export statistics.

1.21 Data Sources and Compilation Methods describes the data sources and methods used to compile Australia's international merchandise trade statistics, including the statistical details obtained from the Department of Home Affairs for the processing, editing, and aggregation of data.

1.22 Classifications describes the commodity and industry classifications used to collect, compile and disseminate international merchandise trade statistics.

1.23 Country, Overseas Port, State and Australian Port defines country of origin, country of final destination and country of consignment. It also explains the classifications used to collect, compile and disseminate country, state and port statistics.

1.24 Mode of Transport describes the mode of transport information collected by the Department of Home Affairs and defines the classification used in the dissemination of these statistics.

1.25 Quantity Measurement explains how the quantity for a commodity is determined; the relationship between quantity and gross weight; unit values and how these differ from price indexes.

1.26 Data Confidentiality outlines how international merchandise trade statistics are confidentialised prior to their release. It explains the legal basis for confidentiality, the method of confidentiality imposed, the procedures used to manage confidentiality, and the effect of confidentiality on the statistics produced. 

1.27 Data Dissemination describes the dissemination of international merchandise trade statistics. It details the release practices used, the revisions policy, what data are available free on the ABS website and how it can be accessed, and other ways to access the statistics.

1.28 Data Quality examines the quality of Australia's international merchandise trade statistics in terms of the seven quality dimensions defined in the ABS Data Quality Framework: institutional environment, relevance, timeliness, accuracy, coherence, interpretability and accessibility.

1.29 Relationship with other Macroeconomic Statistics explains the relationships between Australia's international merchandise trade statistics and balance of payments, national accounts and other related ABS macroeconomic statistics.

1.30 There are 10 appendices that can be accessed from the Downloads tab. 

• Appendix 1: Summary table explaining Australia's compliance with IMTS 2010 recommendations
• Appendix 2: Impact of major changes to concepts, sources, methods or classifications on international merchandise trade time series, January 1988 onwards
• Appendix 3: Hypothetical LNG project
• Appendix 4: List of export FOB currency codes
• Appendix 5: Relationship between the Department of Home Affairs input data items and ABS output data items
• Appendix 6: AHECC and HTISC historical correspondence spreadsheets
• Appendix 7: Correspondence between UN location country codes and international merchandise trade country codes
• Appendix 8: Countries and ports pivot table
• Appendix 9: List of international merchandise trade publications and tables available free from the ABS website
• Appendix 10: Definitions and metadata for import clearances duty related fields.

1.31 This publication also includes a Glossary, an Abbreviations list and a list of references (in the Bibliography) used in the preparation of this manual. 

2.1 Australia's international merchandise trade statistics record goods which add to, or subtract from, the stock of material resources of Australia by entering (imports) or leaving (exports) its territory. Goods are 'physical, produced objects for which a demand exists, over which ownership rights can be established and whose ownership can be transferred from one institutional unit to another by engaging in transactions on markets' For more information see the United Nations Statistics Division's 2008 SNA (paragraph 6.15).

2.2 Goods simply transported through Australia (goods in transit), and goods entering or leaving Australia on a temporary basis e.g. for repair or for exhibition, do not add to or subtract from Australia's stock of material resources and are not included in Australia's international merchandise trade. Where such goods are entered on an import or export declaration they are included in Australia's international non-merchandise trade.

2.3 This chapter explains the categories of goods included in, or excluded from, Australia's international merchandise trade statistics. A detailed explanation of Australia's treatment of unusual or complex transactions and other situations where the practical treatment is based upon available information is included at the end of the chapter.

2.4 In international merchandise trade statistics, the objective is to record goods which add to or subtract from a country's stock of material resources by entering or leaving its economic territory. Australia's economic territory is the geographic area under the effective economic control of the government. This includes the: 

• land area, airspace, territorial waters, and continental shelf lying in international waters over which Australia enjoys exclusive rights or over which it has, or claims to have jurisdiction over fishing rights and rights to fuels or minerals
• any islands belonging to Australia which are subject to the same fiscal and monetary authorities as the mainland, including Norfolk Island, Christmas Island, Cocos (Keeling) Islands, Heard Island, McDonald Islands, Ashmore and Cartier Islands and the Australian Antarctic Territory
• Australia's territorial enclaves in the rest of the world including embassies or consulates, military bases, scientific stations etc but not the territorial enclaves used by foreign governments which are physically located within Australia.

2.5 Australia uses import and export declarations collated by the Department of Home Affairs as the primary source for compiling international merchandise trade statistics. Many other countries use a similar method for compiling statistics through their national Customs/Trade Agencies. The jurisdiction of the Department of Home Affairs does not extend to goods exported and imported by Norfolk Island, Heard Island, McDonald Islands, Christmas Island, Cocos (Keeling) Islands, Ashmore and Cartier Islands, the Australian Antarctic Territory or Australia's territorial enclaves abroad. As a result these areas are excluded from the statistical territory covered by Australia's international merchandise trade statistics.

2.6 In principle, the scope of international merchandise trade statistics is not limited to goods which are the subject of a commercial transaction, but is intended to cover all goods which add to or subtract from Australia's stock of material resources. In practice, however, coverage is limited to those goods which pass the customs frontier and for which a full customs declaration is required.

2.7 The value thresholds applied by the Department of Home Affairs for goods are: 

• imports - goods with a value exceeding $1,000 require a full import declaration
• exports - consignments of goods with a value $2,000 or more.

These value thresholds do not apply to goods requiring a permit; a customs declaration is required for these goods.

2.8 Some data with values below these thresholds are received by the Department of Home Affairs and provided to the ABS. The ABS treatment of these out of scope records is explained in the Data Sources and Compilation Methods chapter (paragraph 4.22).

2.9 In the past, lower value thresholds were applied by the Department of Home Affairs and the ABS (see paragraphs 2.8 and 2.9 of International Merchandise Trade, Australia, Concepts, Sources and Methods, 2001). For changes to thresholds since 1988 see Appendix 2 in the Data downloads section.

2.10 This section (paragraphs 2.11-2.40) describes the goods included in Australia's international merchandise trade statistics. Any limitations associated with the inclusion of the goods is also explained. A description of those goods which are excluded from Australia's international merchandise trade statistics are described in the Goods excluded from Australia's International Merchandise Trade Statistics section (paragraphs 2.41-2.61).

2.11 Non-monetary gold. Non-monetary gold refers to gold that is traded like any other commodity. It includes unrefined gold, gold powder, semi-processed, other unwrought or semi-manufactured gold, coins, bullion and bars. Such gold might be for industrial use, jewellery making, or use as a store of value. These are regarded as commodities, rather than financial assets, as they principally derive their worth from either their gold content or their value as collectors pieces.

2.12 Banknotes, securities and coins, unissued or not in circulation. These are regarded as commodities rather than financial assets and are valued at their production cost, not face value. Banknotes are classified to the HS heading number 4907 while coins are classified to heading number 7118 (unless presented as coin collections, or as separate pieces clearly intended for a particular collection, when they are classified to heading number 9705). The ABS investigates significant export and import declarations to determine the nature of the transaction, that is, financial or trade in goods. Any financial transactions are removed.

2.13 Goods traded in accordance with barter agreements. The exchange of goods under barter agreements involves payment in kind rather than through a financial transaction. These goods are included when the Department of Home Affairs determines that the value is in excess of the customs value threshold.

2.14 Goods traded on government accounts. These include government purchases and sales of civilian and military use goods which cross Australia's customs frontier. Goods supplied under foreign aid programs (including goods permanently traded under grants, loans, barter or transfer arrangements). War reparations are also included.

2.15 Humanitarian aid, including emergency aid. Articles of food, clothing, medicine and other goods entering or leaving Australia under aid programs or as emergency assistance, whether provided by governments, international organisations or non-government organisations are included.

2.16 Goods for military use. Military goods that cross the customs frontier are included in Australia's international merchandise trade statistics, unless they are used by the Australian Defence Force overseas, or are excluded under an inter-governmental agreement.

2.17 Goods acquired by travellers, including non-resident workers and international students. These goods are included when the amounts or values of such goods exceed the customs value thresholds or other legal requirements as defined by Australian law for reporting to the Department of Home Affairs. Most of the goods purchased by Australians travelling overseas or non-resident travellers in Australia fall below the customs value thresholds. These are recorded as travel services (credits and debits respectively) in the balance of payments but they are not included in international merchandise trade statistics.

2.18 Goods on consignment. These are goods, such as diamonds, pearls, artworks, exported or imported for sale by an agent. Although title for the goods is held by the consignor until the goods are actually sold, it is expected that consigned goods will be sold, rather than returned after export or import.

• Customs declarations are required for goods on consignment. The way these goods are reported to Department of Home Affairs and their treatment in international merchandise trade depends on the owner's or their agent's (generally a customs broker acting on behalf of the actual importer) understanding of the concepts of international merchandise or non-merchandise trade and their confidence of a sale occurring. Where the transaction has a value in excess of the edit value thresholds applied by the ABS it will be checked by an ABS editor to determine the most accurate classification (i.e. merchandise or non-merchandise trade)
• If the goods are subsequently returned after initially being included in merchandise trade, the treatment upon return will be either
  • to include the goods as a merchandise trade (effectively balancing the initial treatment). This treatment reflects the difficulty matching the returned goods with the initial transaction if part of the consignment is sold (and the quantities and values are different), (see paragraph 2.22 on Returned goods below).
  • to include the goods as non-merchandise trade and revise the initial export/import to non-merchandise trade. While this treatment is more accurate it is often difficult to apply in practice as the initial transaction may be outside the revision period (see paragraph 10.16 in the Data Dissemination chapter) or cannot be identified.

2.19 Media whether or not recorded. CDs, DVDs and other media with software, video or audio recordings developed for general use (not customised) are included in Australia's international merchandise trade statistics at their full transaction value. Media containing original recordings, customised software (software created for a specific client), or data with fixed-period use licences are excluded as these are treated as services in the balance of payments (defined in paragraph 2.34 below, paragraphs 2.49 and 2.55 in the Goods Excluded from Australia's International Merchandise Trade Statistics section and paragraphs 2.71-2.72 in the Special Cases and their Treatment section).

2.20 Goods for processing with or without a change of ownership. Goods for processing enter or leave a country to undergo specific operations or manufacturing.

• In Australia, some goods for processing are identified:
  • at the time of importation as goods for processing by ABS editors who allocate treatment code 721 to indicate that the goods are being imported to undergo processing. At the time of exportation the owner or their agent may use Australian Harmonized Export Commodity Classification (AHECC) 98050000 (goods re-exported from Australia after industrial processing).
  • at the time of exportation when the exporter or their agent uses AHECC 98060000 (goods exported from Australia which are to be re-imported after industrial processing). However, these goods will not be separately identifiable from all other re-imports at the time of re-importation.
• ABS editors attempt to identify large value transactions of goods for processing where there is no change of ownership. These goods are included in international merchandise trade statistics at their full value but they are excluded from goods in the balance of payments. The manufacturing service fee, however, is included in international trade in services.

2.21 Goods which cross borders as a result of transactions between related parties (e.g. parent corporations and their direct investment enterprises (affiliates/branches)). These include capital equipment and other goods provided by foreign multinational companies to their Australian subsidiaries or Australian companies to their foreign subsidiaries.

2.22 Returned goods. If previously exported Australian produced merchandise is subsequently returned to Australia, the inward transaction should be recorded as a merchandise re-import (see paragraph 3.4 in the Trade System, Valuation and Time of Recording chapter) at the time the good is returned. Similarly, where merchandise previously treated as imported into Australia is subsequently returned overseas, the outward transaction should be recorded as a merchandise re-export (see paragraph 3.5 in the Trade System, Valuation and Time of Recording chapter). Where identifiable, the value of the returned goods is the same as the initial transactions value. This treatment maintains the equilibrium between the incoming and outgoing transaction, albeit increasing the overall volume of both merchandise exports and imports.

2.23 Electricity, gas, oil and water. Australia's valuation of these goods is the net of any delivery charges.

2.24 Goods dispatched or received through postal or courier services. These are included if the value of the goods being traded exceeds the customs value threshold.

2.25 Migrants' effects - imports. Migrants to Australia are required to lodge an import declaration or Self Assessed Clearance (SAC) for the following goods:

• cars, motorcycles, or other vehicles
• parts for cars, motorcycles or other vehicles
• goods which are intended for sale
• goods purchased from overseas after the migrant has arrived in Australia
• goods which were bequeathed to the migrant.

2.26 Where an import declaration is completed and the value of goods exceeds the customs value threshold the goods are included in Australia's international merchandise trade statistics. Migrants' effects are excluded from goods in the balance of payments as there is no change of ownership between a resident and a non-resident. The Department of Home Affairs does not require export declarations for personal or household effects of passengers (including emigrants) meaning these goods are not included in international merchandise exports.

2.27 Goods transferred from or to a buffer stock organisation. These organisations try to influence the supply, demand and price of certain commodities by maintaining a large stock. Where these organisations or schemes operate and goods are imported to, or exported from, Australia the goods are included in Australia's international merchandise trade statistics. A buffer stock scheme was operated by the Australian Wool Corporation during the 1970s and 1980s.

2.28 Goods under financial lease. Goods are considered to be under financial lease if the lessee assumes the rights, risks, rewards and responsibilities in relation to the goods, and from an economic point of view can be considered the de facto owner. Goods entering, or departing from, Australia under financial lease are included in Australia's international merchandise trade statistics (see paragraphs 2.85-2.86 in the Special Cases and their Treatment section).

2.29 Ships and aircraft. These are included if there is a change of economic ownership between an Australian resident and a non-resident and the ship or aircraft enters or leaves Australia's territory. Ships and aircraft remaining in international waters or used in international flights are excluded (defined in the Goods Excluded from Australia's International Merchandise Trade Statistics section (paragraph 2.51 and paragraph 2.58) and Special Cases and their Treatment section (paragraphs 2.68-2.70)).

2.30 Goods delivered to, or dispatched from, offshore installations located in Australia's territory (from, or to, the territory of another country). For example, exports of oil are often shipped directly from an offshore facility. Export declarations are lodged electronically or at the nearest Department of Home Affairs office and the goods are included in Australia's international merchandise trade statistics.

2.31 Fish catch, minerals from the seabed and salvage. These goods are included if they enter or leave Australia's territory and the value exceeds the customs value threshold.

2.32 Bunkers, stores, ballast and dunnage. When supplied to foreign vessels or aircraft in Australia these goods are included. The value of bunkers is estimated as export declarations are not required for these goods. Imports declarations including the value of fuel on foreign vessels are included in imports.

2.33 Satellites and their launchers. These are only included when there is a change of ownership between an Australian resident and a non-resident, the goods enter or leave Australia's territory and the Department of Home Affairs receives an export or import declaration.

2.34 Goods in electronic commerce. These are goods which are ordered and paid for electronically and physically enter or leave Australia's territory. The goods are included when their value exceeds the customs value threshold requiring a full declaration. Packaged software, e-books and other products bought and received electronically are excluded (defined in the Goods Excluded from Australia's International Merchandise Trade Statistics section (paragraph 2.55), and the Special Cases and their Treatment section (paragraphs 2.71-2.72)).

2.35 Gifts and donations. Included are gifts and donations with values exceeding the customs value threshold. Financial donations are excluded.

2.36 Power lines, pipelines and undersea cables. Since June 2014, these goods are included in Australia's international merchandise trade statistics when they are dispatched from Australia for installation in another country (export) or dispatched from another country for installation in Australia (import). Where the goods are to be installed in international waters they are included in international merchandise trade only if there is a change of ownership between an Australian resident and a non-resident. Temporary imports and exports of equipment for the installation of the pipelines or cable have always been excluded from Australia’s international merchandise trade statistics.

2.37 Prior to June 2014, pipelines and undersea cables which were installed in international waters were included whether or not there was a change of ownership between an Australian resident and a non-resident. This treatment was determined before guidance was provided in the international standards for compiling merchandise trade statistics (i.e. no guidance was provided in the IMTS 2010, Rev. 2. Exports of undersea cable laid en route between two countries were attributed to the 'country' receiving the predominant share of the cable or 'International Waters' when the majority of the cable was laid there. For example, an undersea cable laid between Australia and the USA would have been assigned to 'International Waters', as the majority of the cable would be laid outside the territories of all countries along the route. No re-allocation was made for the small portion of the cable laid in either Australia's or the USA's territory.

2.38 Used goods. These include industrial equipment, cars, computer equipment and goods entering or leaving Australia under commercial recycling arrangements.

2.39 Waste and scrap. Metal or other materials to be recycled or otherwise disposed of are included if they have a positive value and are not temporary trade.

2.40 Goods received or sent abroad by international organisations. These goods are included in Australia's international merchandise trade statistics when a customs declaration is lodged.

2.41 The following goods are excluded from Australia's international merchandise trade statistics. Most of the goods are excluded as recommended by the international standard but some goods are excluded because there is either no available data source or their exclusion is consistent with the scope of the statistics.

2.42 Goods simply being transported through Australia e.g. goods in transit (including transhipments). Goods entering or leaving a country with the sole purpose of reaching a third country are excluded, since they do not add to or subtract from the stock of material resources of the country through which they pass. Goods leaving a country, to return after crossing another country, are excluded from both countries' imports and exports. International transportation routes are such that goods may be transported via one or more countries on their way to or from Australia. Alternatively, goods may transit Australia on their way elsewhere. The Department of Home Affairs does not require full import or export declarations for goods in transit.

2.43 Goods temporarily admitted or dispatched. Goods are sometimes brought into a country, or dispatched from it, with a reasonable expectation of subsequent withdrawal or return within a limited time without any change (except normal depreciation). These include art exhibits, specialised equipment used in particular projects, vehicles, race horses, the belongings of competitors who participate in sporting events, and animals for breeding. Where the transaction has a large value as determined by ABS editing processes it will be checked by an ABS editor to ensure that it is accurately classified to international non-merchandise trade (and therefore excluded from Australia's international merchandise trade statistics).

2.44 Goods for repair or maintenance. This comprises goods temporarily crossing international borders so they can be repaired - this is an activity that reinstates the quality of impaired goods and does not result in the creation of a new product. It includes goods that must be repaired abroad because of warranty arrangements or unavailability of Australian services, and goods brought to Australia for repair. For more information about the treatment of specific repairs see the Special Cases and their Treatment section (paragraphs 2.64-2.70). Goods entering or leaving Australia for repair do not add to, or subtract from, the stock of resources so they are excluded from international merchandise trade statistics but the repair services are recorded separately for inclusion in services in the balance of payments.

2.45 Monetary gold. Monetary gold is gold that is exchanged between national or international monetary authorities or authorised banks. These authorities include the Reserve Bank of Australia (RBA) and other central banks, which hold gold as part of an economy's official reserves (a financial asset). Exchanges of monetary gold between monetary authorities are treated as financial transactions and are excluded from Australia's international merchandise trade statistics. When the RBA sells or lends gold to non-monetary authorities, which may then be exported, it is said to demonetise the gold, turning it into non-monetary gold. Any export of non-monetary gold is recorded in international merchandise trade statistics. Likewise, when the RBA receives gold from abroad (e.g. the repayment of a gold loan) it is said to monetise the gold, turning it into monetary gold. Any import of the gold prior to monetisation is recorded in international merchandise trade statistics.

2.46 Issued banknotes and securities and coins in circulation. Where these goods flow into and out of the Australian economy as payments and receipts for international transactions, they are treated as financial assets as they represent a financial claim. These items are not included in Australia's international merchandise trade statistics.

2.47 Goods consigned to and from territorial enclaves. The economic territory of Australia includes Australian embassies, military bases and other installations that are physically located within the geographic boundaries of other countries, and excludes the enclaves of other nations and international organisations located within Australia's geographic boundaries. The movement of goods between Australia and Australian enclaves abroad is considered an internal flow, and therefore these goods are excluded from international merchandise trade statistics. Goods supplied to foreign embassies or military bases in Australia are also excluded. If a customs declaration is received for these goods, the ABS treats it as out of scope and excludes it from international merchandise trade statistics.

2.48 Non-financial assets, ownership of which has been transferred from residents to non-residents, without crossing borders. These assets are land, structures, equipment and inventories which are excluded from international merchandise trade because they changed ownership without entering or leaving Australia. The acquisition or disposal of land and buildings for Australian embassies overseas are examples of the assets to which this category applies.

2.49 Goods treated as part of trade in services. The boundary between goods and services is sometimes blurred. Items classified as goods may include some service element, and vice versa. For example, personal goods acquired by travellers are included in travel services in the balance of payments and not included in international merchandise trade statistics. The value of transportation services to the border of the exporting country is included in the value of goods exported (see diagram 3.1 in the Trade System, Valuation and Time of Recording chapter). Goods treated as services in the balance of payments and national accounts are: 

• Media with stored computer software and / or data developed to order; and audio and video containing original recordings and customised blueprints and the like. These goods are included in services in the balance of payments because their value is in the creative content, not the physical good used as the storage medium.
• Goods acquired by non-residents for their own use while travelling, working or studying in Australia and by residents while travelling, working or studying abroad not exceeding amounts established by Australian Customs law. These goods are included in travel services in the balance of payments.
• Goods purchased in Australia by foreign governments for their own use in Australia and equivalent expenditure abroad by Australian governments. These goods are included in government goods and services n.i.e. in the balance of payments.
• Goods purchased in Australia by foreign government employees and their dependants while stationed in Australia and goods purchased abroad by Australian government employees and their dependants while stationed abroad. These goods are included in government goods and services n.i.e. in the balance of payments.
• Newspapers and periodicals sent under direct subscription. These goods, which come through the post or via couriers, are included in telecommunications, computer and information services in the balance of payments.
• A service transaction which includes goods incidental to the main transaction. For example, a business consultancy which includes the consultant providing low value items such as pens, coffee mugs or computer mouse mats advertising their services - these low value goods are included in trade in services.

2.50 Goods under merchanting. Merchanting occurs when an Australian resident purchases goods from a non-resident and subsequently resells the same goods to another non-resident without the goods entering Australia's customs territory. These goods are included in the category Net exports of goods under merchanting in the balance of payments and not included in Australia's international merchandise trade statistics.

2.51 Goods under operating lease. This category comprises goods shipped under operating, that is non-financial, leasing arrangements. It may include particular ships or aircraft depending on individual circumstances. While these goods are mostly excluded from Australia's international merchandise trade statistics occasionally the length of an operating lease will cover the economic life of the good. In these instances the lease is considered to be more like a financial lease and is included in international merchandise trade statistics (see paragraphs 2.85-2.86 in the Special Cases and their Treatment section).

2.52 Goods lost or destroyed after leaving the economic territory of the exporting country, but before entering the economic territory of the intended importing country, whether or not ownership has been acquired by the importer. Loss or destruction during transit may be sustained as a result of misadventure, inclement weather, rough handling, or theft. Products with a limited shelf life may simply perish. These goods are not included in Australia's import statistics (but goods lost after export from Australia are included in Australia's export statistics).

2.53 Satellites and their launchers. When these goods are produced and launched in a foreign country on behalf of Australia they are excluded from international merchandise trade statistics because the goods do not enter Australia's territory. Also excluded are satellites and their launchers transported into or out of Australia without a change of ownership between an Australian resident and a non-resident.

2.54 Goods functioning as a means of transport. These include aircraft and ships (except those specified in paragraph 2.29 of the Goods Included in Australia's International Merchandise Trade Statistics section) and the containers used to transport cargo. These goods are not included in Australia's international merchandise trade statistics.

2.55 Content delivered electronically. When goods are downloaded, emailed, streamed or electronically received they are excluded from international merchandise trade statistics. These include online books, periodicals, directories and mailing lists, musical audio downloads, streamed audio content, films and other video downloads, streamed video content, system software downloads, application software downloads, online games etc. Electronically delivered or downloaded material is included in services in the balance of payments.

2.56 Waste and scrap. Waste and scrap with no commercial value are excluded from Australia's international merchandise trade statistics.

2.57 Goods entering or leaving Australia illegally. This includes smuggled goods, like drugs. Illegal goods that are detected by authorities are usually destroyed and are not included in Australia's international merchandise trade statistics.

2.58 Mobile equipment (including ships and aircraft) that changes ownership while outside the country of residence of its original owner. This includes goods which were initially temporarily imported or exported e.g. for construction work, offshore drilling or disaster relief but subsequently involve a change of ownership between a resident and a non-resident. These goods are not included in Australia's international merchandise trade statistics.

2.59 Fish caught on the high seas by Australian registered vessels and landed in Australian ports. These goods are not included in Australia's international merchandise trade statistics as they are considered to be of Australian origin. Measurement is also made difficult as customs declarations are not required. Fishing on the high seas by Australian registered vessels require a high sea permit.

2.60 Fish catch, minerals from the seabed and salvage landed by Australian vessels in foreign ports or acquired by foreign vessels on the high seas from Australian vessels. These goods are not included in Australia's international merchandise trade statistics. An example is fish caught in Australian waters and shipped directly to Japan; a coverage adjustment is included in goods in the balance of payments.

2.61 Bunkers, stores, ballast and dunnage that are acquired by Australian vessels or aircraft, outside Australia. These goods are not included in Australia's international merchandise trade statistics.

2.62 The majority of international merchandise trade transactions are straightforward - the classification and treatment in international merchandise trade statistics can be clearly determined by following the rules defined in the UN standard. However, conceptual or statistical questions and problems can arise. These are addressed through: a thorough examination of the issues; consultation with international statistical colleagues; and application of the basic principles to the available information. Solutions are often based upon the limited information available at the time.

2.63 The following paragraphs explain in greater detail the treatment of some of these types of transactions and events in international merchandise trade statistics.

2.64 There are difficulties in consistently treating exports and imports of aircraft engines and parts due to the sometimes limited information supplied about these transactions and the different circumstances under which they cross the customs frontier. These include: 

• Short-term loan of aircraft engines and parts for aircraft emergencies, where the engines and parts are expected to be returned or replaced. Both transactions should be recorded as international non-merchandise trade.
• Swaps of engines and parts at required maintenance intervals or at the end of their shelf life. Both transactions should be recorded as international non-merchandise trade.
• Obtaining (through purchase or financial lease) new parts and spares, or shedding (through sale or disposal) of excess engines and parts by Australian-owned airline companies. These transactions should be recorded as international merchandise trade. When these items are imported by foreign airline companies for their aircraft in Australia, or are at the end of an operational lease to Australian-owned airline companies, they should be recorded as international non-merchandise trade.
• Faulty engines and parts returned for repair or replacement. Both transactions should be recorded as international non-merchandise trade.

2.65 Australian owned aircraft used on international routes sometimes return to Australia after undergoing repairs. If customs import declarations are received the aircraft and repairs (recorded separately) are treated as non-merchandise trade but the value of the repair will be included in the balance of payments under maintenance and repair services. There is normally no corresponding non-merchandise export declaration as the aircraft were functioning as a means of transport (see paragraph 2.54 of the Goods Excluded from Australia's International Merchandise Trade Statistics section). Where identifiable, any parts shipped from Australia to assist with the repairs are recorded as international non-merchandise trade.

2.66 Large value customs declarations relating to imports and exports of aircraft engines and parts are identified by the ABS during editing. The ABS editors use the identity of the importer or exporter to help determine treatment and if necessary the customs agent or owner are contacted to confirm entry details and obtain additional information useful for correctly classifying the goods.

2.67 Values vary substantially depending on the nature of the parts and the aircraft in which they are used. Shipments occur reasonably frequently and sometimes contribute significantly to international merchandise trade statistics. The ABS attempts to record large value shipments and the overall exports and imports of aircraft engines and parts in a consistent manner.

2.68 Repair and maintenance activities reinstate or maintain the quality of the product. Vessel repairs do not result in the creation of a new or a substantially improved vessel. When a vessel crosses the customs frontier for repair purposes, the movements into and out of the country should be recorded as international non-merchandise trade. Any parts exported from the country of the vessel's owner to assist with the repair (usually only identifiable if the value is in excess of the ABS edit value threshold - see the Glossary in the Explanatory Notes tab) are also recorded as international non-merchandise trade. However, low value parts are unlikely to be identified and would be treated as merchandise trade.

2.69 Where substantial improvements are made to the vessel, resulting in a significant increase in its value, the type and value of the improvements are recorded as international merchandise trade. Improvements which have the effect of moving the vessel from one statistical code to another, will also be recorded as international merchandise trade. These improvements are not considered to be repairs.

2.70 Australian components exported for incorporation into a new vessel, to be subsequently imported to Australia, should be recorded as international merchandise trade. Their value upon return to Australia will be included in the overall value of the vessel.

2.71 The recording of international merchandise exports and imports of computer software for statistical purposes is complicated by the fact that computer software often consists of a good (to be included) and a service component (to be excluded) that are difficult to quantify separately. This is further complicated by the growth in online delivery of software and other goods (to be excluded). Accordingly, Australia's treatment of computer software in international merchandise trade statistics is:

• Media whether or not recorded for general use (not customised) is included at its full transaction value (the value of both the carrier medium, that is, the CD or DVD and the software).
• Media containing customised software or software written for a specific client is excluded. The value of such software is included in services in the balance of payments. Although the value of customised software includes the cost of the software medium (i.e. the CD or DVD), the predominant portion of value is usually a service component (i.e. design, modification, development and programming services; maintenance and repair services; or licence fees, distribution fees, copyright, patent fees and trademarks).
• Non-customised software downloaded or otherwise electronically delivered is excluded. Software which is delivered electronically is not reported to the Department of Home Affairs and not included in Australia's international merchandise trade statistics.

2.72 The ABS investigates Australia's international computer software transactions and attempts to separate general use from customised (non-standard) software, as this distinction is not made possible by the Harmonized System. While both exports and imports are investigated, greater attention is given to imports due to their greater relative volume. Tailored edits, contact with the customs agent, exporter or importer, and other information are used including the nature of business undertaken, the per unit value of software, and other goods involved in the transaction. Transactions which are found to contain customised computer software are not included in international merchandise trade but are referred to balance of payments compilers for inclusion in services in the balance of payments.

2.73 Australia has abundant natural gas resources in north west Australia, Queensland, the Timor Sea and Bass Strait. The production and export of natural gas as liquified natural gas (LNG) requires significant investment in infrastructure in what is often referred to as an LNG project. The value of an LNG project usually encompasses the design, construction and engineering costs, as well as the LNG plant, LNG train and related infrastructure e.g. vessels or pipelines.

2.74 LNG 'trains' are refrigeration units which cool and condense the natural gas into a colourless and odourless liquid (LNG) for transportation and storage. An LNG train contains a range of components e.g. gas compressor, pumps, filters and storage tanks. An LNG plant can comprise onshore and offshore infrastructure including an LNG train, accommodation modules (for workers involved in the construction and production phases), trunkline, flowline, jetty, treatment plant, pipeline, jacket and platform.

2.75 Included in international merchandise imports are all goods imported for inclusion in the LNG project. The goods are reported to the Department of Home Affairs in the normal way close to the time that they enter Australia. Because the transactions are usually high in value, ABS editors confirm with the importer all the details including the value, quantity and gross weight. These import transactions are included in international merchandise trade statistics in the month that the import transaction is finalised by the Department of Home Affairs. Machinery and equipment imported temporarily for the construction phase are excluded from Australia's merchandise trade and included in international non-merchandise trade.

2.76 Goods for an LNG project can appear in different periods in Australia's international merchandise trade, balance of payments and gross fixed capital formation (GFCF) in the national accounts statistics. Goods imported into Australia are recorded in the balance of payments when ownership changes. Change of ownership for large value projects can occur progressively. In the case of an LNG project, this means that the Australian resident company has accepted the risks and responsibilities associated with ownership prior to and sometimes more than a year ahead of the arrival of some imported components. For example, ownership change may occur progressively as major imported components like a storage tank or gas compressor are completed and the expenditure occurs. The recording of large capital imports for LNG projects is the same in the balance of payments and GFCF in the national accounts.

2.77 Where the design, construction or engineering services for the LNG project are provided by a non-resident company the transactions are included in services in the balance of payments.

2.78 When the LNG plant commences production, LNG which is exported is recorded in international merchandise export statistics in the month that it is shipped (or transported via pipeline) from Australia.

2.79 Appendix 3 (see the Data downloads section) shows the treatment of transactions for a hypothetical $1b LNG Project in international merchandise trade, balance of payments and private gross fixed capital formation statistics. The Feature Article: Mining Investment in ABS Publications was included in the March 2012 issue of the ABS publication, Private New Capital Expenditure and Expected Expenditure, Australia (cat. no. 5625.0). The article explains in detail the recording of mining investment across ABS economic statistics.

2.80 Floating, Production, Storage and Off-loading (FPSO) vessels are used to extract oil or gas from below the seabed, and to process and store it on-board for later off-loading onto tankers or transportation through a pipeline. An FPSO vessel can be either a converted oil tanker or purpose built and may provide accommodation. Processing occurs in modules, known as topsides, and storage occurs in the hull. The FPSO vessel is not fixed to the seabed but is designed to be moored on location (via a turret) for an extended period of time. FPSO vessels are relatively easy and less expensive to relocate compared with fixed platforms.

2.81 To enable oil or gas production there is a range of associated equipment including: subsea equipment which is used to bring the oil onto the FPSO vessel; the manifold which connects the wells; and flexible risers to connect the FPSO vessel to the seabed wells.

2.82 Imported FPSO vessels and any associated equipment (like the turret and wells) are included in Australia's international merchandise trade statistics in the month that the imported goods are initially finalised by the Department of Home Affairs. Usually the goods will be transported to Australia as needed and may therefore be recorded in international merchandise trade statistics over a number of months. Components for the FPSO vessel may also be produced in several countries (including Australia), and assembled prior to being imported. Australian produced components which are exported for assembly are included in international merchandise trade exports and subsequently included in the value of the imported FPSO vessel. The time of recording for an FPSO vessel and its components can be different in international merchandise trade statistics (when the customs declaration is finalised) compared to the balance of payments and national accounts (change of ownership).

2.83 Occasionally an FPSO vessel may be exported for refurbishment. If this involves a significant transformation (not simply maintenance or repair) the FPSO vessel will be included in export statistics when it leaves Australia and included in import statistics when it returns. The value of the refurbished FPSO vessel will include the cost of the refurbishment. FPSO vessels which are temporarily exported for maintenance or repair are recorded as international non-merchandise trade and the value of the maintenance or repair is included in services in the balance of payments.

2.84 When the FPSO vessel commences production, exported petroleum or gas is recorded in international merchandise export statistics.

2.85 Often goods like aircraft, ships, FPSO vessels and other capital equipment are leased rather than purchased. There are two kinds of leases, financial and operating. Financial leases are included in international merchandise trade statistics and operating leases are excluded. Under financial leases the lessee assumes the rights, risks, rewards and responsibilities associated with the goods and can be considered the economic owner. Operating leases do not have these characteristics. When it is difficult to determine which type of lease is in place the duration of the lease is used in conjunction with the economic life of the goods:

• Where the owner of the good being imported or exported advises that a financial lease is in place, the goods are included in international merchandise trade.
• Where the owner of the good advises that an operational lease is in place the ABS checks the duration of the lease. If the lease duration is considered to cover the remaining economic life of the good, the lease will be treated as a financial lease and the goods included in international merchandise trade. If the lease does not cover the economic life of the good, the goods are included in international non-merchandise trade.
• Bare boat charters had been treated as financial leases until March 2014 when it was recognised that not all the risks and rewards of ownership were transferred to the charterer.

3.1 The scope and coverage of Australia's international merchandise trade statistics are explained in the Scope, Coverage and Treatments chapter. This chapter on the Trade System, Valuation and Time of Recording, covers the remaining aspects of the conceptual framework: the trade system; valuation; and time of recording of imports and exports. Statistical users should use both chapters to gain a full appreciation of the basis upon which the statistics are compiled.

3.2 There are two internationally recognised systems for compiling international merchandise trade statistics: the general trade system; and the special trade system. The difference between them lies mainly in the way goods passing through the Department of Home Affairs warehouses (or 'customs free zones') are treated. The alternative systems give rise to differences in the timing of recording trade flows.

3.3 The general trade system used by the ABS records the movement of goods as they enter or leave the country. Under this system, imports comprise goods entered directly for home consumption, including re-imports, together with goods imported into Department of Home Affairs warehouses. Exports include all goods moving out of the country and comprise both domestic goods and re-exports of foreign goods.

3.4 Re-imports are goods originally exported, which are subsequently imported in either the same condition in which they were exported, or after undergoing repair or minor operation which leaves them essentially unchanged. Minor operations include blending, packaging, bottling, cleaning and sorting.

3.5 Re-exports are goods originally imported, which are exported in either the same condition in which they were imported, or after undergoing repair or minor alterations which leave them essentially unchanged. Re-exports are not considered the production or manufacture of the country which originally imported the goods. Minor operations include blending, packaging, bottling, cleaning and sorting.

3.6 In Australia's international merchandise trade statistics, re-imports are identified as the data item where Country of Origin is recorded as Australia and re-exports are identified with a State of Origin of Re-exports.

3.7 The special trade system records the clearance of goods by the Department of Home Affairs authorities. Imports are recorded at the point when the goods are cleared for home consumption. Under this system, imports comprise goods entered directly for home consumption, together with goods cleared from the Department of Home Affairs warehouses. Exports include all goods exported and comprise both domestic goods and re-exports of foreign goods.

3.8 The special trade system is used by the European Union and Indonesia. An Australian export to a warehouse in the European Union is not declared as an import until the imported goods are released for free circulation or consumption. Goods exported to Indonesia's Batam Island bonded processing zone are not recorded as Indonesian imports unless the goods are released for use in the rest of Indonesia. A number of other countries have established similar processing zones.

3.9 Australia's international merchandise import statistics are available on the special trade basis if statistics are required on imports entering the statistical territory for home consumption. These are called import clearances (see paragraph 10.22 of the Data Dissemination chapter). While there are some instances where a valid export declaration is required to be submitted before goods for export can be released from a Department of Home Affairs warehouse, Australia does not separately compile or publish statistics about these movements.

3.10 The WTO Agreement on customs valuation defines the rules on customs value for imported goods. Broadly speaking the rules say that the customs value is the transaction value, which is the price actually paid or payable for the goods when sold for export to the country of importation, provided that certain conditions for a fair, uniform and neutral valuation are met. This is usually the market price (the basic valuation reference in the system of national accounts), or a very close approximation to it, which is recorded in the accounts of the transactors or in the administrative records used as data sources. The market price is the amount of money that a willing buyer pays to acquire something from a willing seller, when such an exchange is between independent parties and involves only commercial considerations.

3.11 For Australia's international merchandise trade statistics the transaction value is used. If the transaction value reported by the exporter/importer does not meet the conditions described in the preceding paragraph (see paragraph 3.10), the WTO Agreement prescribes a hierarchy of valuation methods (see paragraph 3.17 in the Customs Value section below).

3.12 Delivery of goods by the exporter to the importer may occur at any time and place, from the point at which the goods are produced, to the point at which they are finally used. The UN guidelines recommend the use of a cost, insurance and freight (CIF) type valuation for imports (i.e. the value at the border of the importing country) and a free on board (FOB) type valuation for exports (i.e. the value at the border of the exporting country). The point of valuation is independent of the time payment is made or received, but may occur at the same time.

3.13 In Australia, import statistics are published using the customs value, (described below) which is a FOB type value, but imports on a CIF basis are also available (see paragraph 3.19 in the Other Import Values section below). Export statistics are published on a FOB type basis, and the transaction values reported are assessed to be the most practical approximation of market price.

3.14 A FOB price at the customs frontier includes the transaction value of the goods, the value of outside packaging (other than international containers used for containerised cargo), and related distributive services used, up to and including loading the goods onto the carrier at the customs frontier of the exporting country. A FOB type point of valuation applies whether the goods are transported by sea, air or pipeline. The CIF price is equal to the FOB transaction value, plus the cost of freight and merchandise insurance involved in transporting the goods beyond the place of export to the customs frontier of the importing country. The movement of goods across customs frontiers and the appropriate points of valuation are shown in Diagram 3.1.

* The Fob valuation point for gas being transported via pipeline is as it enters the pipeline although this may depend on contractual agreements.

3.15 The point of valuation for goods transported via pipeline can also be considered in terms of the FOB or CIF type valuation. These goods while not loaded onto a ship or aircraft for international transportation can still be valued at the time they enter the pipeline (approximation for valuation point at the frontier of the exporting country (FOB type)) and their arrival at the frontier of the importing country (CIF type).

3.16 The conceptual basis for the Australian customs value is defined by the Department of Home Affairs. The starting point for establishing the customs value is the price actually paid or payable to the supplier (transaction value), provided a number of conditions are met. The most important of these is that the buyer and seller are not related, or where they are related that the relationship has not affected the price of the imported goods.

3.17 If the Department of Home Affairs determines that the reported transactions value does not meet the requirement for a fair, uniform and neutral valuation they will use one of the following methods to replace the value. These methods are consistent with the rules in the WTO Agreement on customs valuation.

• identical goods value - the value of identical goods sold for export to Australia
• similar goods value - the value of similar goods sold for export to Australia
• deductive value - the price of identical or similar goods placed for sale in Australia. To determine the deductive value the price must be reduced by the value of costs incurred between the place of export and the time of sale in Australia
• computed value - a method to calculate the value of producing the goods, plus any costs relating to importation including profits
• fall-back value - if in the event that there is no suitable method for valuing the goods, the Department of Home Affairs will decide on the value by taking into account the above methods and any other related information.

3.18 The customs value (which in Australia's case is a FOB valuation) does not include the international freight and international insurance costs involved in transporting the goods from the place of export (see the Department of Home Affairs publication, Valuation of Imported Goods). However, any inland freight and inland insurance costs incurred by the purchaser before the goods leave the place of export are included in the customs value.

3.19 Importers who import goods with values above the customs thresholds described in the Scope, Coverage and Treatments chapter (paragraph 2.7) are required to complete a full imports declaration. Included on all import declarations are the customs value for each commodity as well as the total customs, FOB and CIF values for the consignment. The ABS processing system models the CIF and FOB per line item (commodity) using the ratio between customs, FOB and CIF values for the entire consignment. All three imports values are available in international merchandise trade statistics, however only customs value is available on Imports Clearances, see Table 10.1 in the Data Dissemination chapter.

3.20 The compilation of international merchandise trade statistics can be complicated by the fact that transaction values may initially be expressed in a variety of currencies. The conversion of these values into a single currency is a prerequisite for the compilation of consistent and meaningful statistics. In Australia's case, the data are presented in terms of Australian dollars, though for international comparisons it is customary to convert to US dollars. For countries where the exchange rate is volatile it may be more meaningful to present the time series in US dollars.

3.21 In Australia, import values are reported to the Department of Home Affairs in the invoice currency of the transaction. The Integrated Cargo System (ICS) automatically converts the values to Australian dollars, using exchange rates applicable on the date of export. The rates used are the daily average selling rates of currencies against the Australian dollar, as advised by the Reserve Bank of Australia (RBA). The ABS receives details of the reported invoice currency, together with the value of the import transaction in Australian dollars.

3.22 From October 2004, for export transactions, the FOB value must be reported to the Department of Home Affairs in the currency used on the invoice for the goods, provided it is one of twenty-eight allowable foreign currencies or Australian dollars. Appendix 4 (in the Downloads tab) shows the twenty-eight foreign currencies that the Department of Home Affairs allows export reporters to report in. Goods invoiced in all other currencies need to be converted to Australian dollars by the exporter or their agent.

3.23 The ABS receives export data as reported to the Department of Home and converts any values reported in one of the accepted foreign currencies to Australian dollars. This conversion uses an indicative reference rate supplied daily by the RBA that applied on the date of departure of the goods from Australia. The invoice currency in which the transaction was negotiated and sold is also reported to the Department of Home Affairs.

3.24 Australia's exported goods are generally recorded at the time of shipment. Imports are recorded when the Department of Home Affairs first finalises the processing of the relevant import declarations. The time of recording of exports and imports is explained more fully in Table 3.2 below.

4.1 In Australia, data from the Department of Home Affairs (and its predecessors) has been the primary source of international merchandise trade statistics for over 100 years. The ABS uses information from the Department of Home Affairs which has been provided to them by importers, exporters, shipping companies, airlines, freight forwarders, or agents on behalf of these businesses, so that the goods can be cleared for entry to, or export from, Australia.

4.2 This chapter describes the exports and imports information which is collected by the Department of Home Affairs and transferred to the ABS. The way the ABS receives, transforms, quality assures and aggregates data for dissemination is explained. The small number of non-Department of Home Affairs data sources are also described.

4.3 The Department of Home Affairs is the federal authority responsible for the collection and management of export and import documentation. The documentation is used by the Department of Home Affairs to assess and collect duty and other revenue payable on imported goods, and to monitor and control the physical movement of goods into and out of Australia.

4.4 For exports, declaration information must be lodged by exporters (or their agents) with the Department of Home Affairs prior to, and up to six months before, the departure of the goods. In mid-2013, 99.7% of all export declarations were submitted electronically. Electronic cargo manifests are mandatory for each international voyage and flight.

4.5 For imports, a declaration must be lodged with, and cleared by the Department of Home Affairs before access to the goods can be obtained. Import declarations may be lodged well in advance of the expected arrival of the goods. Over 99.5% of import declarations are reported electronically to the Department of Home Affairs.

4.6 The system used by the Department of Home Affairs to collect and process export and import information is known as the Integrated Cargo System (ICS). When a declaration is entered into the ICS a range of checks are applied to ensure that only valid codes for the commodity, country, port etc are used and that all mandatory information has been entered. Warning messages are sent to alert importers and exporters of possible errors. The Department of Home Affairs checks are aimed at ensuring compliance with customs laws in an environment of self-regulation and risk assessment. In practice, this means that while most declarations are processed without intervention, compliance is assured through the Department of Home Affairs legislative power to monitor and intercept cargo and to audit company records and practices. Where evidence of non-compliance with customs legislation is identified, compliance can be enforced by imposing sanctions or fines or by prosecution.

4.7 Every day (including weekends and public holidays) the ICS produces a file that includes export declarations and manifests processed on the previous day and transmits the file to the ABS overnight. Table 4.1 lists the export data items received from the Department of Home Affairs in the daily files. While some data items have been grouped in the table below, for example, quantity has been grouped with the unit of quantity, each item included in the grouping is listed in the description. In addition to the data listed below, the ABS also receives management information, to verify the full receipt of Department of Home Affairs data files. Appendix 5 lists these data items and explains whether they are available in ABS aggregate output.

4.8 After midnight each day the ICS produces a file of import and clearance records which were finalised by the Department of Home Affairs in the previous 24 hours. The file is transmitted to the ABS overnight. Table 4.2 below lists the import data received daily from the Department of Home Affairs. While some data items have been grouped in the table, for example, duty calculation fields, each item included in the grouping is listed in the description. Appendix 5 (in the Data downloads section) lists these data items and explains whether they are available in ABS aggregate output.

4.9 The relationship between the ABS and the Department of Home Affairs is defined in a signed agreement between the two agencies. Meetings between the deputies of both agencies are held annually and regular discussions occur at the work level. Together these arrangements ensure that both agencies understand the requirements of the other agency and ensures that the relationship remains strong.

4.10 The ABS receives a range of information about the customs procedures applied to transactions. This includes the line nature type, treatment code, duty fields and GST fields. The information supplied by Department of Home Affairs can be used to ensure the correct treatment of transactions in ABS statistics.

4.11 In 2001 when the concepts, sources and methods (CSM) for international merchandise trade statistics was first published, ABS statistics were processed on a mainframe computer. Between 2003 and 2006 the international merchandise trade system was re-designed, tested and transferred to a new platform. Over a similar period the Department of Home Affairs were re-engineering their systems for collecting exports and imports information. While these system changes were significant in terms of the way data are collected, delivered and processed there was only minimal impact on statistical output (see Appendix 2 in the Data downloads section). If users of the statistics are interested in the previous systems and methods they should read the 2001 version of the CSM.

4.12 The IMT system uses standard ABS statistical infrastructure and tools with adaptations to cover the type of data (export and import declarations, not survey questions and answers) and the volume of data received on a daily basis.

4.13 The IMT system has a separate test environment for testing changes or new functionality prior to implementation in the production environment. The test environment is also used as a training environment.

4.14 The timing of the processing cycle differs between exports and imports due to exports being compiled on a departure date basis and additional time allowed for the finalisation of export manifests. Consequently, for exports the commencement of the new processing month normally occurs around the middle of the reference month. For imports the commencement of the new processing month happens earlier, generally on the sixth working day.

4.15 Threshold edit values are set to manage processing workloads. These are used to ensure that all records with values above the thresholds and records with fatal or warning error messages are checked by ABS editors.

4.16 Before processing commences it is necessary to ensure that metadata changes taking effect from the current reference month have been implemented correctly. For example, if a new 10 digit commodity code is active in the ICS from 1 January 2014 this new code must be loaded to the IDW metadata before processing of January 2014 data commences.

4.17 The IDW is a key database in the processing of international merchandise trade data. It is the repository for all export/import data and metadata, including:

• all the source data (including all versions of each transaction) from the Department of Home Affairs
• all amendments
• information added by ABS editors about the amendments
• all the metadata used by the IMT system (e.g. commodity, country and port codes and descriptions) and some metadata which can be used to link international merchandise trade data to other ABS economic surveys e.g. ABN
• additional transactions which are added when customs data are not available, see the Other Data Sources section (paragraphs 4.55-4.56).

4.18 The data load processes initially re-format and map some customs data items to ABS data items. The most important re-mapping is for any fields which use the UN/Locode (i.e. the country, port and state fields). This is because when the Department of Home Affairs introduced the UN/Locode in their system (with the introduction of the ICS) the ABS decided to minimise changes to the IMT system and statistical output by continuing to use the previous country, port and State codes, (see Diagram 6.1 in the Country, Overseas Port, State and Australian Port chapter).

4.19 Processing stage codes are added to records in the data load to IDW. These codes are used throughout the IMT system to identify particular record types and their status at particular processing points.

4.20 The load process identifies out of scope transactions which are not edited but are still loaded to the IDW for analytical purposes. The following record types are out of scope of international merchandise trade statistics.

• Consular records: These are transactions covering goods sent to Australian diplomats overseas (do not subtract from Australia's stock of material resources) or brought to Australia for foreign diplomats stationed here (do not add to Australia's stock of material resources). These transactions are internal flows and are out of scope for international merchandise trade statistics (see paragraph 2.47 in the Scope, Coverage and Treatments chapter).
• Customised software records: Some goods transactions are considered services. Where possible these are identified in the load e.g. computer software with a calculated unit value (reported customs value divided by reported quantity) greater than $10,000.00 is an indication that the software is customised and not an off the shelf product (see paragraph 2.49 in the Scope, Coverage and Treatments chapter).
• Value below the threshold: The customs thresholds which require the lodgement of a customs declaration are described in the Scope, Coverage and Treatments chapter (paragraph 2.8). Import consignment lines which are below the threshold ($1,000) are often received because they are part of a consignment of goods which includes lines above the threshold or because the goods for import are tobacco and alcohol which require a full declaration regardless of value. These low value lines are treated as out of scope. Export consignments with values below the consignment threshold ($2,000) are also received as an export permit may apply to the commodity. These are also treated as out of scope. This treatment ensures a consistent approach as the records identified as out of scope only represent a small proportion of the value and volume of goods below these thresholds. Value estimates for goods below the thresholds are included in Australia's balance of payments statistics.
• Outside the revision period: Amendments for records which are outside the ABS revision period (see paragraphs 10.15-10.16 in the Data Dissemination chapter).
• Bank notes in circulation: These are out of scope when they are valued at their face value and represent a financial transaction (see paragraph 2.46 in the Scope, Coverage and Treatments chapter). As these records are not easily identified in the load process it is more likely that they are changed to out of scope by an ABS editor.

4.21 Replacement or amendment records which alter an out of scope record to in-scope record are edited and included in international merchandise trade statistics.

4.22 Once the export and import data are loaded to the IDW, all in-scope records are passed through their respective edit process (exports or imports edit). The edit process checks the details of each transaction against a set of edit conditions which are categorised as fatal, warning (notifiable) or informative. Transactions which fail fatal or warning edits then have messages sent to the edit/amendment system for investigation by an ABS editor. The investigation may require contact with the exporter, importer or agent to resolve. Informative edits usually indicate an automated system adjustment has been applied. Transactions which fail informative edits are not viewed by an ABS editor unless they also contain a fatal or warning edit.

4.23 The following list describes the most common edit checks applied to both export and import data:

• identification of all transactions with values equal to or above a large value threshold. These transactions are subject to detailed checks including confirmation with the exporter, importer or their agent if necessary
• internal consistency checks e.g. if the mode of transport is reported as sea, the Australian and overseas ports should not be airports
• unit value and for exports gross weight unit value edits are applied. These edits are generally informative and are only assigned to editors if they fail a warning or fatal edit
• automatic adjustment of certain import records, where the unit values fall well outside the expected range for the relevant HS classification. The quantity is assumed to be in error and is estimated

4.24 To ensure that ABS editors focus on the most significant transactions, and to minimise contact with exporters, significance editing is used in conjunction with many of these edit checks. Significance editing gives a score to all transactions to indicate how the reported value (exports FOB value, imports customs value) differs from a predicted value. The size of the score is an indication of the potential error. Transactions with scores beyond the significance score thresholds are flagged for review by an ABS editor. The score is allocated based on data calculated by the input editing benchmarks. The input editing benchmarks use the previous 12 months of data to determine if quantity or gross weight is the best predictor of value.

4.25 The re-edit process is essentially the same as the edit process but occurs following editor amendment whereas the edit process occurs when a new transaction (or revised version of a transaction) is received from the Department of Home Affairs.

4.26 Chart 4.3 below shows the imports data load where the IDN information from the Department of Home Affairs is re-formatted and loaded to the IDW. Earlier versions of an IDN which are already on the IDW are identified (to ensure that the new version is not loaded as a new transaction) and up-dated in the Load to the IDW process. In Chart 4.3 below, this is shown as data moving from the IDW back to the 'Load to IDW' stage and then through to the IDW again. The metadata which is used in the Reformat and Imports edit processes includes the edit checks and country/port metadata. After the edit check a new version of the transaction with any relevant alerts is created in the IDW (shown as a two way arrow between the IDW and Imports edit).

4.27 There are many similarities in the exports and imports data load processes. However, they are separate processes involving different data items and metadata and there are some aspects which are unique to the exports load. The unique export processes are described in the following sections.

4.28 Exporters must complete an export declaration (EDN) with the Department of Home Affairs in advance of the goods arriving at the wharf for export. The EDN is an intention to export and includes preliminary information about when the goods will leave Australia and on what carrier the goods will be transported. The actual departure details are listed on the ship or aircraft manifest. When the ABS receives both the EDN and its manifest, the transaction is said to be acquitted 'matched' and the goods exported.

4.29 The exports matching process matches EDNs and manifests and adds the departure details from the manifest to the EDN information. In most cases the EDN is received by the ABS before the manifest. The EDN will be loaded to the IDW and identified as an EDN awaiting acquittal. Once the corresponding manifest is received the EDN is acquitted and, if the transaction has not been reported in Australian dollars, the Reserve Bank of Australia exchange rate for the day of departure will be used to convert values to Australian dollars. If the manifest is received first it is also loaded to the IDW but identified as a manifest record. When the EDN is received, the matching process retrieves the manifest from the IDW and the EDN is acquitted. This process of retrieving EDNs/manifests from the IDW and matching them with their corresponding manifests/EDNs is depicted with a two way arrow between the exports matching process and the IDW.

4.30 A small number of records are 'self acquitting'. This means the EDN is marked as acquitted (and therefore exported) without being shown on a manifest. Self acquitting EDNs are those export declarations which do not get recorded on a manifest. These are postal records, ships and aircraft exported under their own power, ship and aircraft stores and spares and unaccompanied baggage, identified by the relevant export goods type.

4.31 Because EDNs are lodged and passed to the ABS in advance of export, the exchange rate can be for a future date (and is therefore unknown). When these EDNs are loaded to the IDW the FOB value is estimated using the latest available exchange rate. To update these estimated records the load process checks for new exchange rates and retrieves the estimated records from the IDW. These records are passed through the load process again to update the information. In Chart 4.4 below, this is shown as data moving from the IDW back to the Match and 'Load to IDW' stages (with input of exchange rates) and then through to the IDW again.

4.32 Towards the end of the processing month, a report is produced showing all unacquitted (no manifest received) large value EDNs with expected departure dates within the processing month. If the report shows an abnormally high value of unacquitted EDNs sometimes a decision to load more daily files to the IDW is made in the hope that manifests to acquit the EDNs are received. However, there comes a point where meeting the publication deadline means that no more data is loaded.

4.33 The edit/amendment system is used to view and, if necessary, amend transactions that have been flagged by the edit process as requiring examination by an ABS editor. The system is also used to view and, if appropriate to do so, amend unusual transactions identified as requiring ABS editor attention (e.g. by output edit processes). Amendments are applied as a result of contact with the exporter or importer, identification of a repeated mis-reporting error or other information provided in the transaction or similar transactions. Any amendment of a transaction requires the ABS editor to include comments (which are appended to the transaction) to explain the change(s) made. All amended transactions go through the re-edit process to ensure data integrity and transactions failing re-edit checks are returned to the edit/amendment system for re-examination. The system also provides the means to view any transaction using its unique identifier. The system is also used by ABS editors and managers to monitor work flow e.g. the number of transactions awaiting editor attention (because they have failed fatal or warning edits).

4.34 Aggregate editing is an important component of statistical compilation and finalisation of output for release. Aggregate editing involves creating monthly totals by particular levels of commodity (HS 6-digit or SITC 2-digit), country, state, mode of transport and unit of quantity and comparing these to previously released aggregates. Significance scoring (scoring the current month aggregates against a benchmark derived from the previous 12 months of data) is used to highlight the most significant aggregate movements and to set workloads. Where necessary further follow-up with exporters and importers is undertaken and transactions amended. Records of any investigations and findings are kept and reviewed by more senior staff during the finalisation of output.

4.35 Output editing involves examining the data for particular commodities or 2-digit chapters of the HS. Examination of data at these levels may reveal a significant change. When this occurs the transactions contributing to the change are identified and scrutinised.

4.36 The trade query tool is an integral component of aggregate and output editing. The query tool allows staff to retrieve data from the IDW using a defined set of criteria. Simple reports can be produced, data aggregated and sorted to help ABS editors to understand movements or to resolve mis-reporting errors in the data. The trade query tool is also used in editing and verifying individual transactions. Where mis-reporting errors are found the relevant transactions are amended using the edit/amendment system.

4.37 International merchandise trade statistics are based on a large number of individual transactions and are released at a very detailed aggregated level e.g. 8-digit exports and 10-digit imports by Australian port, country and overseas port. As the ABS has limited resources available for ensuring the quality of international merchandise trade statistics, resources are focussed on the data required for macroeconomic statistics.

4.38 Once editing is finalised and prior to the public release of international merchandise trade statistics, data are prepared for inclusion in the balance of payments.

4.39 The preparation of data for the balance of payments signals the first approval stage in the release of international merchandise trade statistics. The export and import data supplied for the balance of payments includes totals on a SITC and, for imports only, a BoPBEC basis, information about significant month to month movements and other information used to compile goods data on a balance of payments basis. More information regarding classifications such as SITC and BoPBEC and how data is prepared for the balance of payments is presented in the Classifications and Relationship with Other ABS Macroeconomic Statistics chapters respectively.

4.40 International merchandise exports statistics are first released on a balance of payments basis in International Trade in Goods (cat. no. 5368.0). Goods credits and debits on a balance of payments basis are closely related to international merchandise exports and imports but have been adjusted to take account of the principles of economic ownership and residence. More information can be found in the Relationship with Other ABS Macroeconomic Statistics chapter (paragraphs 12.4 to 12.7).

4.41 Australia's balance of payments is published quarterly in Balance of Payments and International Investment Position, Australia (cat. no. 5302.0). In this publication, the quarterly estimates of goods and services credits and debits are the sum of the months published in the corresponding release of International Trade in Goods (cat. no. 5368.0) without any changes. The quarterly exports and imports statistics which are included in the Expenditure on GDP estimates in the publication Australian National Accounts: National Income, Expenditure and Product (cat. no. 5206.0) are the same as those published in the quarterly balance of payments (so they include both goods and services and are on a balance of payments basis). Detailed exports and imports data on an international merchandise trade basis are supplied to the National Accounts Branch for use in compiling the annual supply-use tables, for input-output analysis and for other analytical purposes.

4.42 On a quarterly basis, data for the Prices Branch of the ABS are also prepared. The data include detailed Harmonized System commodity level data (8 digit export and 10 digit import) by country, value, quantity and gross weight. The data are used in the compilation of the International Trade Price Indexes, Australia (cat. no. 6457.0).

4.43 International merchandise trade data provided to the areas of the ABS which compile the balance of payments, national accounts and prices statistics include aggregates and some transactions level data so that the compilers of those statistics are able to fully understand and interpret the data for their

4.44 The ABS Information Warehouse (ABSIW) is the repository for data available for dissemination, including international merchandise trade statistics. Also stored on the ABSIW are all the metadata which make the statistics meaningful e.g. international merchandise trade commodity and country codes and descriptions and associated information. The ABSIW was created to enable all ABS data to be captured, defined and delivered in a consistent way.

4.45 At the end of the processing month after the data have been finalised and the output files created, international merchandise trade statistics are loaded to the ABSIW User database (an intermediate database where data are checked prior to release). The publication tables, time series spreadsheets and data cubes found on the ABS website are all extracted from the ABSIW User database. At 11.30am (Canberra time) on the day of release, the publication, all storage tables involving international merchandise trade data and metadata for the particular collection, time series spreadsheets and data cubes are copied from the ABSIW User database to the ABSIW Output database (output environment) and ABS Website.

4.46 Consultancy and subscription data are created from the ABSIW Output database from 11.30am on the day of release of the publication.

4.47 There are only a small number of regular non-Department of Home Affairs data sources used in the compilation of international merchandise trade statistics. These data sources are:

• RBA exchange rates - these are used to convert exports FOB values to Australian dollars using the exchange rate applicable on the date of departure from Australia (or in some cases the expected date of export), see paragraph 4.34 in the ABS Compilation Methods section above
• public information - newspapers and websites are used to verify unusual transactions
• other ABS surveys or compilation areas - occasionally more up to date or additional information about goods being exported or imported might be provided by another ABS survey, for example, the quarterly Survey of New Capital Expenditure.

4.48 Export declarations are not required for fuel provided to foreign airlines and ships in Australia. The value of these transactions is estimated and included in Australia's merchandise export statistics using price and historical quantity data while alternative data sources are explored. In addition, because exports are recorded on a date of departure basis, occasionally research shows that a significant export has occurred for which no details have yet been received from the Department of Home Affairs. These transactions are added to the IDW towards the end of the processing month and processed in the same way as customs records i.e. once added the transaction(s) are passed through the edit process, subject to output editing and included in the final results.

5.1 ABS international merchandise trade statistics are compiled and disseminated according to several different, but linked, detailed classifications. These classifications are used to identify and compile details of internationally traded goods in a consistent way for statistical and analytical purposes.

5.2 Due to the variety of uses, the different classifications feature different levels of detail and classification criteria, such as the level of manufacturing or processing, the main end-use of the goods or the industry most likely to have produced the goods. The statistics can also be classified by country or country groups, mode of transport and state of origin or destination, to enable detailed analysis of Australia's international merchandise trade.

5.3 The purpose of this chapter is to briefly describe the main classifications used to collect, compile and disseminate the statistics.

5.4 Correspondences describe the relationship between different classifications or different versions of the same classification.

5.5 The most detailed international merchandise trade classifications used by the ABS are the Australian Harmonised Export Commodity Classification (AHECC) for exports and the Combined Australian Customs Tariff Nomenclature and Statistical Classification (Customs Tariff) for imports. To assist in the analysis of Australia's international merchandise trade statistics, the ABS maintains a series of correspondences from the most detailed level of the AHECC and Customs Tariff to the most detailed level of the other ABS classifications used to disseminate these statistics.

5.6 When there are changes to a classification a correspondence showing the link between the new code and old code or codes is created. These correspondences are provided by the ABS for the users of these classifications. See Appendix 6 in the Data Downloads section.

5.7 The relationships between items in the correspondences may be 'one to one', 'one to many', 'many to one' or 'many to many'. The example of 'fresh apples' has been used throughout this chapter to illustrate how international merchandise trade data may be classified and presented to suit the preferences of the user.

5.8 ABS correspondences are reviewed and updated to permit comparison of data over time.

5.9 The ABS uses the following classifications to present its international merchandise trade data: 

• Harmonized Commodity Description and Coding System (Harmonized System or HS) is a six digit classification. The HS is used as the basis for the eight-digit AHECC and the ten-digit Customs Tariff
• Standard International Trade Classification (SITC), Revision 4 (Rev. 4)
• Classification by Broad Economic Categories (BEC)
• Balance of Payments Broad Economic Categories (BoPBEC) (for imports and import clearances only)
• Australian and New Zealand Standard Industrial Classification (ANZSIC), 2006 (Revision 2.0)
• Supply Use Product Code (SUPC) and Input Output Product Code (IOPC).

5.10 SITC (Rev.3) and ANZSIC 93 are used to disseminate historical international merchandise trade data (prior to July 2005 and July 2009 respectively). Upon request, export and import data for periods prior to January 2012 can be supplied by the Australian Transport Freight Commodity Classification (ATFCC). A correspondence from the AHECC and Customs Tariff codes to the ATFCC has not been maintained since January 2012.

5.11 The SUPC is used in the compilation of the annual supply use benchmarks which are used internally by the ABS to balance the three measures of Gross Domestic Product. International merchandise trade data by SUPC are not available for release. The IOPC is used in the compilation and release of the annual Input-Output Product Tables, Australian National Accounts Input-Output Tables (Product Details) (cat. no. 5215.0.55.001).

5.12 Table 5.1 shows the number of statistical items at each level of the major classifications used for international merchandise trade statistics. The AHECC and Customs Tariff use the HS to the six digit level except for:

• AHECC Chapter 98 - Special Transactions and Commodities Not Classified According To Kind:
• AHECC Chapter 99 - Commodities and Transactions Not Included In Merchandise Trade:
• Customs Tariff Chapter 99 - Special Transactions and Commodities Not Classified According To Kind; and Commodities and Transactions Not Included In Merchandise Trade;
• One AHECC code in Chapter 26 and one Customs Tariff code in Chapter 29 used by the ABS for confidentiality purposes (see Table 9.1 in the Data Confidentiality chapter for further information).

5.13 The HS was adopted by the World Customs Organization (WCO) in June 1983 and it entered into force on 1 January 1988. Australia began using the HS on that date as the basis for the AHECC and the Customs Tariff and for the compilation and dissemination of international merchandise trade statistics. The HS is used by over 200 countries or economies as the basis for their Customs Tariffs and for their international merchandise trade statistics. Approximately 98% of world merchandise trade is classified in terms of the HS.

5.14 The HS is a hierarchical classification and is arranged in a logical structure and supported by well-defined rules and explanatory notes to assist in classification decisions and to clarify the scope of the particular headings or sub-headings. As part of the classification the WCO provides Section Notes, which have information relevant to classifying goods in that section, and Chapter Notes, which outline the broad structure of that chapter and provide information specific to classifying goods within that chapter. Where appropriate the Department of Home Affairs add Additional Notes to the Chapter Notes, further clarifying which goods should be classified to that chapter. The HS generally groups commodities according to their degree of manufacture; material of which the goods are composed; and by similar generic description. For example, live animals are classified within Chapter 1, animal hides and skins within Chapter 41 and leather footwear within Chapter 64.

5.15 The HS is reviewed every five years and updated by the WCO to ensure it remains relevant given developments in technology and changes in patterns of international trade. There have been five revisions to the HS since the first edition was implemented in January 1988, with the latest revision being implemented by Australia on 1 January 2017. The previous revisions to the HS by the WCO were implemented in Australia in 1996, 2002, 2007 & 2012, there were minor amendments in 1992. The next revised edition is scheduled for implementation in January 2022.

5.16 Australia has expanded the HS to create the AHECC and the Customs Tariff to provide further commodity detail for its exports and imports.

5.17 Since 1 January 1988, all goods requiring an export declaration have been classified according to the eight-digit AHECC code. The first six digits of the AHECC are taken from the HS, with the seventh and eighth digits (statistical code) added by the ABS to satisfy Australian statistical requirements.

5.18 AHECC codes provide the most detailed breakdown of exported goods and are used to analyse exports of particular commodities. The ABS has responsibility for maintaining the AHECC documentation. Due to the smaller number of statistical codes, the absence of duty, and the comparatively less diverse export trade, amendments to the AHECC are made less frequently than to the Customs Tariff.

5.19 The ABS generally only releases updates to the AHECC in January and July reference months. Before updates to the AHECC are released they are advertised on the ABS website under International Trade in Goods (cat. no. 5368.0).
5.20 An example of the hierarchical structure of the AHECC is included below:

5.21 The detailed AHECC is available electronically in the form of Excel spreadsheets on the ABS website from the Data downloads section of the publication, Australian Harmonized Export Commodity Classification (AHECC) - Electronic Publication (cat. no. 1233.0).

5.22 Since 1 January 1988, all goods requiring a full customs declaration for import into Australia are classified according to the ten-digit Harmonized Tariff Item Statistical Code (HTISC) of the Customs Tariff. The first six digits of the code are taken from the HS and match the first six digits of the AHECC codes. The seventh and eighth digits are added by the Department of Home Affairs to allow for different rates of duty applied to particular goods. The ninth and tenth digits (statistical codes) are added by the ABS to satisfy Australian statistical requirements.

5.23 HTISCs provide the most detailed breakdown of imported goods and are used to analyse imports of particular commodities. The Department of Home Affairs has responsibility for maintaining the HTISC documentation and distributes replacement pages containing classification amendments.

5.24 The ABS generally only updates statistical codes in the Customs Tariff in July reference month,. Updates to the Customs Tariff are advertised on the ABS website under International Trade in Goods (cat. no. 5368.0).

5.25 An example of the hierarchical structure of the Customs Tariff is included below:

5.26 The ABS has responsibility for the maintenance of all aspects of the statistical code components of the AHECC and the Customs Tariff. The ABS does not make changes to either classification at the two, four or six-digit levels which are part of the HS, or to the eight-digit level of the Customs Tariff which is maintained by the Department of Home Affairs through their relevant legislation. The only exceptions are the inclusion of two extra commodity codes for the Broad Commodity Details confidentiality restrictions and the use of non HS chapters 98 and 99.

5.27 An ABS Information paper: International Trade Classification Feasibility Studies, 2001 (cat. no. 5499.0.55.001) contains more information for applicants seeking classification changes.

5.28 Most countries use the SITC, in addition to the HS, for the dissemination and analysis of merchandise trade statistics according to user requirements. While the HS classification groups commodities by the material of which the goods are composed, the SITC groups goods according to their level of manufacturing or processing. The ABS uses the HS based classifications for the compilation and dissemination of detailed commodity information but the SITC is the primary classification used for the publication and dissemination of broad level commodity information in ABS' international merchandise trade statistics.

5.29 The third revision of the SITC (Rev. 3) was developed to better align the SITC with the HS. It was implemented by the ABS at the same time as the HS based classifications, on 1 January 1988.

5.30 The fourth revision of the SITC (Rev. 4), released internationally on 1 January 2007, along with the updated edition of the HS, was necessary because of the large number of significant changes to the HS since January 1988. SITC (Rev. 4) retains the overall structure of SITC (Rev. 3) and consists of the same number of one-digit sections and two-digit divisions and has one additional 3 digit group level code. Changes at the five-digit basic heading levels resulted in the deletion of 247 SITC (Rev. 3) basic headings and the addition of 84 new basic headings. As a result of the changes, strict period to period comparability was lost for a number of series.

5.31 The ABS implemented SITC (Rev. 4) with the release of the July 2008 reference month. Two information papers: Changes to International Trade Statistics July 2008, 2007 to 2008 (cat. no. 5368.0.55.009) and Impact of Introducing Revision 4 of the Standard International Trade Classification, 2008 (cat. no. 5368.0.55.010) were released prior to the changes in the classification. These information papers detailed how the changes would occur, the impact on the data, correspondences from old to new SITC codes and correspondences to the AHECC and Customs Tariff codes. To assist users in the interpretation of the data after the changes to the classification, export and import statistics were compiled on both the SITC (Rev. 3) and the SITC (Rev. 4) basis for financial years 2005-06 and 2006-07 and published in the second information paper specified at the beginning of this paragraph (cat. no. 5368.0.55.010).

5.32 Users of time series data should be aware that Australia's international merchandise trade statistics are presented on a SITC (Rev. 4) basis from July 2005 but prior to this the series are on a SITC (Rev. 3) basis. Statistics are available at the five-digit (the most detailed level), three-digit, two-digit and one-digit levels. It is possible to link data (with the exception of refined petroleum products) at the five-digit SITC level to the six-digit level of the HS classification. Refined petroleum products can only be linked from the five-digit SITC to codes at the most detailed HS levels i.e. eight-digit AHECC and ten-digit HTISC. The international HS to SITC correspondence are not always released along with updates to HS. ABS do not always predict the correct correspondences, so changes are sometimes needed to concordances at a later date.

5.33 The majority of countries and international organisations continue to use SITC for a variety of purposes, such as the study of long term trends in international merchandise trade and the aggregation of traded commodities into classes more suitable for economic analysis.

5.34 An example of the hierarchical structure of the SITC (Rev. 4) is included below:

5.35 The BEC classification was introduced by the UN in the early 1970s. It is a three-digit classification that groups commodities according to their main end use, that is, consumption goods, capital goods and intermediate goods. The BEC was designed as a means for converting data compiled in terms of SITC into these end-use categories.

5.36 The BEC categories are aligned as far as practicable with the System of National Accounts (SNA) framework. The BEC classification is suitable for the general economic analysis of international merchandise trade statistics and facilitates the use of this data in conjunction with other national and international economic statistics.

5.37 The BEC classification groups goods into nineteen categories. Sixteen of these basic categories make up the three broad end-use categories:

• consumption goods
• capital goods
• intermediate goods

A fourth category (other goods) includes the three remaining basic categories: 321 (Motor spirit); 51 (Passenger motor cars); and 7 (Goods not elsewhere specified). These three basic categories cannot be assigned to a single broad end-use category i.e. motor spirit and passenger motor cars are used by both industry (as intermediate consumption and capital goods respectively) and households (as consumption goods), and goods not elsewhere specified can be a mix of all three end use categories. For output presentation purposes, the ABS has combined the other goods category with the intermediate goods category.

5.38 There is a link available between the BEC three-digit level and the HS codes at the most detailed level i.e. the eight-digit AHECC and ten-digit HTISC. Correspondences are also available for the BEC three-digit level to the SITC five-digit level. When SITC (Rev. 4) was released the UN provided a new correspondence between the six-digit level of the HS and BEC. A correspondence between SITC (Rev. 4) and BEC is planned by the UN. Further information on BEC can be found in the information papers: Changes to International Trade Statistics July 2008, 2007 to 2008 (cat. no. 5368.0.55.009) and Impact of Introducing Revision 4 of the Standard International Trade Classification, 2008 (cat. no. 5368.0.55.010)

5.39 An example of the hierarchical structure of the BEC classification is included below:

5.40 The BoPBEC is a classification used by the ABS to disseminate import and import clearance data since 1994. It is based on the three end-use categories of the BEC classification: consumption goods, capital goods and intermediate and other goods and provides more detail than the BEC classification. There are some minor variations which affect motor spirit, passenger motor cars, a range of military equipment, video recording or reproducing apparatus, and certain types of other imports which are not classified according to kind. The three end use categories are further split based on SITC into 26 merchandise imports commodity groups.

5.41 By corresponding SITC categories to particular BEC categories, the classification attempts to classify international merchandise trade statistics, for general economic analysis, according to the main end-use of the commodities. However, it does not achieve complete alignment with the particular end-use to which commodities are put in specific circumstances. For example, passenger motor cars are classified as consumption goods in BoPBEC although some are acquired by businesses. If they were identifiable they could be classified to capital goods, and some parts and accessories of capital goods, which are classified as other goods, are in fact acquired as capital equipment.

5.42 The 26 merchandise imports commodity groups have been designed so that they: result in meaningful groupings which have sufficient value to warrant separate identification; provide an appropriate spread across all end-use categories without any unduly large residual components; and provide detail for major import commodities. The 26 merchandise imports commodity groups are further sub-divided into 107 commodity sub-groups for more detailed analysis.

5.43 Merchandise imports on a BoPBEC basis are published on the ABS website in International Trade in Goods (cat. no. 5368.0). Table 34 contains data at the detailed commodity sub-group level, as a monthly time series commencing from July 1989.

5.44 An example of the hierarchical structure of the BoPBEC classification is included below:

5.45 The ANZSIC was developed jointly by the ABS and Statistics New Zealand (SNZ). One of the guiding principles in the development of the ANZSIC was to align it as closely as possible to the International Standard Industrial Classification of All Economic Activities (ISIC). However, the degree of alignment is sometimes adversely affected by competing classification principles e.g. a different organisation or structure of Australian or New Zealand industry, or a lack of significance of some internationally recognised economic activities in the two economies.

5.46 The ANZSIC is used in Australia and New Zealand for the collection, compilation and dissemination of statistics on an industry basis. While it is designed for compilation of statistics on a standard industry basis, it can also be used to produce statistics on an industry of origin basis. ABS international merchandise trade statistics are most commonly presented according to the industry of origin but some export data are compiled on a standard industry basis.

5.47 Monthly export and import statistics are released on an industry of origin basis in the ABS publication: International Trade in Goods (cat. no. 5368.0):

• Table 32a contains ANZSIC 2006 export data, by FOB value, as a monthly time series commencing from July 2005
• Table 32b contains ANZSIC 1993 export data, by FOB value, as a monthly time series commencing from January 1988 and ending in June 2009
• Table 35a contains ANZSIC 2006 import data, by customs value, as a monthly time series commencing from July 2005
• Table 35b contains ANZSIC 1993 import data, by customs value, as a monthly time series commencing from January 1988 and ending in June 2009.

5.48 Industry of origin statistics are compiled by allocating statistical codes from the AHECC and the Customs Tariff to an ANZSIC industry class based on the primary activities of the industries with which they are most commonly associated i.e. commodity codes are assigned to industry classes by matching the commodities to the defined primary activities of classes in the ANZSIC. These are the industries most likely to have produced the traded items. All trade in a commodity is assigned to one industry class (which may or may not be the only industry which produces the goods). This is because international merchandise trade data are compiled from customs records which are based on the commodities traded and not the actual industry which produced the goods.

5.49 There are correspondences available from ANZSIC to the HS and the SITC codes (and vice versa) at the most detailed level of the classifications, see Appendix 6 in the Downloads tab.

5.50 An example of the hierarchical structure of ANZSIC 2006 is included below:

5.51 In international merchandise trade statistics, all apples and pears (which are primary to ANZSIC 2006 class 0134) will be classified as shown above irrespective of the industry undertaking the production. 

5.52 International merchandise trade data was first presented, on an industry of origin basis, according to the ANZSIC, in July 1993. In February 2006, a new version of ANZSIC (ANZSIC 2006) was released. The ABS began disseminating international merchandise trade data by ANZSIC 2006 in July 2009. To enable analysis over time the ABS compiled international merchandise trade data using both versions of ANZSIC so that:

• ANZSIC 2006 data is available for all periods from July 2005
• ANZSIC 1993 data is available for all periods from January 1988 to June 2009.

For more information, see the ABS information paper: Changes to International Trade in Goods Industry Statistics, July 2009 (cat. no. 5368.0.55.011).

5.53 The IOPC is an industry of origin product classification that has been specifically developed for the compilation and application of Australian Input-Output (I-O) tables. Because the I-O system describes the production and subsequent use of all goods and services, an I-O product classification needs to be defined in terms of characteristic products of industry sectors. The overall principles for the preparation of such an industry of origin product classification include:

• Homogeneity of inputs - each product or product group should consist of items that have similar input structures or technology of production. This principle is generally applied through the definition of each IOPC item in terms of the ANZSIC industry in which it is mainly produced.
• Homogeneity of disposition - each product or product group, having satisfied the first criterion, should consist of items that have similar patterns of disposition or usage. This principle is applied by reference to the description of source data items and information about the transport, distribution and product taxation margins applying to particular products.

5.54 The IOPC used in the annual release of Input-Output Product Tables in Australian National Accounts: Input-Output Tables (Product Details) (cat. no. 5215.0.55.001), is consistent with the 2006 edition of the Australian and New Zealand Standard Industrial Classification (ANZSIC) (cat. no. 1292.0).

5.55 Detailed HS product information (the 8 digit AHECC and the 10 digit HTISC) is assigned to IOPCs. This assignment is determined by forming judgements regarding the ANZSIC class(es) to which a HS item is primary.

6.1 International merchandise trade statistics by partner country are of significant analytical value. The statistics are used to calculate trade shares and analyse trade patterns and product markets. This information is used for business planning and for government trade policy and negotiations.

6.2 For attribution of partner country, the ABS classifies imports and import clearances according to the country of origin of goods and exports by country of final destination (this is the same concept as country of last known destination). Additionally for imports, the ABS receives port of loading and for exports overseas port of discharge from The Department of Home Affairs. In some cases, the country reported in these fields may be the country of consignment.

6.3 In compiling international merchandise trade statistics, Australia, like most other countries, uses customs records as the primary data source. Consequently the Department of Home Affairs' definition of Australia and foreign territories (a narrower definition than economic territory) is used. Australia's economic territory is defined in the Scope, Coverage and Treatment chapter (paragraph 2.5) and in the Glossary (see the Explanatory Notes tab). The definition of the economic territory of Australia's trading partners is defined by the Department of Foreign Affairs and Trade. In most cases these align with the trading partner's definition.

6.4 This chapter defines country of origin and country of final destination. It also explains the classifications used to collect, compile and disseminate country, state and port statistics.

6.5 The country of origin of a good (for imports) is determined by Rules of Origin (ROO) established by each country. In Australia, the ROO are established in the Customs Tariff, Customs Tariff Act 1995, Customs Act 1901 and Customs (International Obligations) Regulation 2015. These rules, in addition to determining the country of origin of a good, also determine the base level of duty applicable on imported goods.

6.6 There are two common types of ROO depending upon application, the non-preferential and preferential ROO. Section 153Q of the Customs Act 1901 makes provision for non-preference ROO. For goods imported from a non-preference country, the country of origin is determined by whether the goods: 

• are wholly manufactured in the country or
• if partly manufactured, the last process in the manufacture of the goods was performed in the country and the allowable factory cost (materials, labour and overheads) is not less than the specified percentage of their total cost. The specified percentage depends on whether the goods are of a kind commercially manufactured in Australia.

6.7 In relation to preferential ROO, Australia has entered into a number of Free Trade Agreements (FTAs) with other countries. These agreements provide preferential rates of duty (often free) for goods traded between these countries and Australia. When goods are imported, the importer or agent may be eligible to claim a preferential rate of duty under a particular trade or preference agreement. The importer is responsible for making the initial ROO self-assessment and the Department of Home Affairs will only review this application if specific intelligence indicates that the ROO has been applied incorrectly.

6.8 In Australia, rules of origin exist for all FTAs and preference schemes in order to distinguish eligible 'originating goods' of preference countries from the ineligible produce of that country and goods from other countries. Entitlement to preference is determined in accordance with Part VIII Division 1A - 1K of the Customs Act which provides the criteria for determining the origin of goods based on 'produce or manufacture of' a country. There are various rules of origin used in Australia's FTAs and preference schemes. The most common rules are:

• Wholly obtained - this is common to all agreements. If a product is a naturally occurring product of the country, or is made entirely in that country out of materials from that country, the good is considered to have originated in that country.
• Change in Tariff Classification - this refers to the Harmonized Commodity Description and Coding Classification System (HS) used in the Customs Tariff Act. The HS system categorises all goods and assigns them a code so that goods can be consistently identified internationally. This ROO requires that the HS classification of the final good imported from the preference country is different from the HS classification(s) of the materials imported into that country that were used to make the good. The ROO may require a small shift from a different Tariff Subheading or Heading, to a large shift from a different Tariff Chapter. If the necessary Change in Tariff Classification shift is met, then the goods meet the ROO.
• Regional Value Content (RVC) - this rule requires that a threshold amount of the final value of the good is attributable to production costs within the country. RVC rules can be calculated in various ways and these are specified in each agreement that uses them. RVC is a form of Value-Added rule and is sometimes known by that term.
• Process Rule - this requires the final good to have undertaken a particular manufacturing or processing operation in the preference country.

Other common rules which the Department of Home Affairs may apply include:

• Final process of manufacture - this rule requires goods to have undergone their final process of manufacture in the preference country prior to importation into Australia.
• Consignment - these provisions allow for the transport, and certain minimal procedures, of final goods through other countries on their way to Australia so that the final process of manufacture rule is not breached.
• De minimis - this rule allows for a specific amount of foreign/non-originating material. The amount is defined in the relevant legislative provisions for each FTA or preference scheme.

6.9 While the Department of Home Affairs' objective in applying different types of ROO is to limit preferential rates of duty to goods which meet their origin criteria, from a statistical perspective the rules ensure the country of origin is accurately recorded for goods subject to import duty.

6.10 The application of ROO may differ between countries as the concepts and definitions are generally not symmetrical. Where the rules are different it may lead to discrepancies in country attribution when imports recorded by one country are reconciled with the corresponding exports of a trading partner. For this reason, international guidelines on the criteria for establishing ROO are included in the Revised Kyoto Convention (RKC) which can be accessed from the UN Trade Statistics website.

6.11 The Department of Home Affairs has accepted and abides by the rules of the RKC but they have not adopted Annex K. This is because Annex K has a single set of rules governing the origin of goods while Australia's FTAs and preference schemes contain more specific rules. Nevertheless Australia's ROO follow the principles defined in the RKC. More detailed information is available in the Preferential Rules of Origin Publication and the official Free Trade Agreement documents, both available on the Department of Home Affairs website.

6.12 Country of consignment is not part of the ABS merchandise trade dataset. However it is an important international partner country attribution, alongside country of origin, a concept worth understanding and how it relates to ABS port information. 'The country of consignment (in the case of imports) is the country from which goods were dispatched to the importing country, without any commercial transactions or other operations that change the legal status of the goods taking place in any intermediate country. If, before arriving in the importing country, goods enter one or more further countries and are subject to such transactions or operations, that last intermediate country where such transactions or operations took place should be taken as the country of consignment', see Footnote 1 (in the Footnotes section below).

6.13 In some cases, country of consignment may be the same as the country reported in the overseas port of loading field, which is the place where the goods are loaded onto an aircraft or ship for the purpose of being transported to Australia. Depending on the circumstances (the transportation details that are known by the importer and the accuracy of reporting), different information may be provided to the Department of Home Affairs. Three possibilities are described below. The overseas port of loading reported to the Department of Home Affairs is usually determined by the information contained in the bill of lading.

6.14 Goods wholly manufactured in China are exported to Australia. The goods are shipped direct from a Chinese port to an Australian port. In Australia's import statistics the country of origin should be recorded as China, the overseas port of loading should be a Chinese port and country of consignment (were it required by the Department of Home Affairs) should be China.

6.15 Goods wholly manufactured in China are exported to Australia but repackaged and consolidated in Singapore. In Australia's import statistics the country of origin should be recorded as China, the overseas port of loading should be Singapore and the country of consignment (were it required by the Department of Home Affairs) should be Singapore (as the repackaging and consolidation would be considered a commercial transaction that changes the legal status of the goods).

6.16 Goods wholly manufactured in China are exported to Australia but in Singapore the goods are unloaded and re-loaded onto a different carrier. In Australia's import statistics the country of origin should be recorded as China, the overseas port of loading should be Singapore (but could be reported on the import declaration as a Chinese port) and the country of consignment (were it required by the Department of Home Affairs) should be China (as the loading and re-loading of goods for export is not on its own a commercial transaction that changes the legal status of the goods).

6.17 The ABS defines the country of final destination as 'the last country, as far as it is known at the time of exportation, to which goods are to be delivered. This is irrespective of where they have been initially dispatched to and whether or not, on their way to that last country, they are subject to any commercial transactions or other operations that change their legal status', see Footnote 2 (in the Footnotes section below).

6.18 Although country of consignment is not part of Australia's export statistics, it is an important international attribution. The country of consignment (in case of exports) 'is the country to which goods are dispatched by the exporting country, without - as far as it is known at the time of exportation - being subject to any commercial transactions or other operations that change the legal status of the goods taking place in any intermediate country', see Footnote 3 (in the Footnotes section below). Significant additional data reporting and data processing burden would be involved as countries often do not differentiate the country of final destination and the country of consignment.

6.19 In Australia, country of consignment in some cases may be the same as the country reported in the overseas port of discharge field, which is the place where goods are unloaded from an aircraft or ship after it leaves Australia. Depending on the circumstances (the transportation details that are known by the exporter and the accuracy of reporting), different information may be provided to the Department of Home Affairs. Three possibilities are described below.

6.20 Goods wholly manufactured in Australia are exported to China. The goods are shipped direct from an Australian port to a Chinese port. In Australia's export statistics, the country of final destination should be recorded as China, the overseas port of discharge should be China and the country of consignment (were it required by the Department of Home Affairs) should be China.

6.21 Goods wholly manufactured in Australia are exported to China but repackaged and consolidated in Singapore. In Australia's export statistics the country of final destination should be recorded as China, the overseas port of discharge should be Singapore and the country of consignment (were it required by the Department of Home Affairs) should be Singapore (as the repackaging and consolidation would be considered a commercial transaction that changes the legal status of the goods).

6.22 Goods wholly manufactured in Australia are exported to China but in Singapore the goods are unloaded and re-loaded onto a different carrier. In Australia's export statistics the country of final destination should be recorded as China, the overseas port of discharge should be Singapore (but could be reported on the export declaration as a Chinese port) and the country of consignment (were it required by the Department of Home Affairs) should be China (as the loading and re-loading of goods is not on its own a commercial transaction that changes the legal status of the goods).

6.23 The recording of imports by country of origin shows the direct relationship between the producing country (the country in which the goods originate) and the importing country. This information is regarded as essential for matters of trade policy and negotiations, for administering import quotas or tariffs, and for related economic analysis.

6.24 There are, however, limitations to the use of data compiled on a country of origin basis. In principle, export and import statistics will only match between two countries when exports are shipped directly from the country of origin to the country of final destination. Discrepancies occur when third countries are involved, for example re-exports of merchandise traded through intermediate countries.

6.25 For example, goods produced in China, sold and shipped to Australia, are later resold and dispatched to New Zealand. China's statistics would most probably show these as exports to Australia, if at the time of export the goods are expected to remain in Australia. After a period of time has elapsed, Australia may then export the goods and record them as a direct transaction between Australia and New Zealand. New Zealand statistics would most likely not attribute the imports to Australia, but indicate that goods were imported from China (the country of origin). These trade movements complicate data comparability between partner countries.

6.26 Where countries also compile data by country of consignment this information can be used to explain differences in partner country statistics since it promotes the recording of the same transactions by importing and exporting countries. This offers the possibility of obtaining reasonably comparable statistics since goods recorded as imports by one country are to be recorded as exports by another.

6.27 For the calculation of country trade balances, Australia's international merchandise trade statistics are classified by country of origin for imports and country of final destination for exports. Some country trade balances, consistent with the standard, are published in the Excel version of the country table i.e. Table 14 of International Trade in Goods (cat. no. 5368.0). The time series spreadsheets of Table 14 available on the ABS website do not include country trade balances but these can be easily calculated by subtracting Australia's imports from a country (Table 14b) from Australia's exports to that country (Table 14a).

6.28 Users should be aware that international merchandise trade statistics by country include the category 'Country not available for publication'. The category represents goods affected by confidentiality restrictions from September 2008 for imports, and from June 2013 for exports. More detail is contained in paragraph 9.24.

6.29 DFAT also publish a full range of country balances in its Composition of Trade, Australia publication. Interested users should refer to the DFAT website.

6.30 Three classifications are used in producing international merchandise trade statistics by country and overseas port. They are: 

• UN location code at country and port level (used in export and import declarations reported to the Department of Home Affairs
• International merchandise trade country code (used in ABS publications and other outputs)
• International merchandise trade overseas port code (used in ABS publications and other outputs).

6.31 A correspondence table which links the input and output codes is used to allocate the UN location country and port codes supplied on customs records to the international merchandise trade country and overseas port codes. This process is shown in the Diagram 6.1 below.

6.32 The United Nations Code for Trade and Transport Locations (commonly known as UN location code) is a list of countries and locations within countries developed and maintained by the United Nations Economic Commission for Europe (UNECE). As at June 2014, the UN location codes identify over 85,000 locations in 250 countries and installations in international waters. This classification is updated periodically to include new codes, amend existing codes and delete codes no longer required. A list of countries included in the UN location code is available in this link: UN Location code list by country. When goods for export or import are declared to the Department of Home Affairs the country of final destination/country of origin and overseas port are reported using a UN location code.

6.33 The ABS maintains a table for the correspondence between the UN location country code and international merchandise trade country code where each two letter UN location country code is corresponded to an international merchandise trade country code of up to four letters (e.g. BR corresponds to 'BRAZ' with label 'BRAZIL'). In the ABS correspondence table, more than one UN location country code can be corresponded to a single international merchandise trade country code. Prior to the adoption of the UN location country code by the Department of Home Affairs in July 2003, the Department of Home Affairs and the ABS maintained a joint list of major country codes. A list of countries where the correspondence is not one UN location code to one ABS country is provided in Table 6.2 below.

6.34 The ABS continues to maintain its own country and overseas port classifications:

• to facilitate analysis across time
• to minimise potential confidentialisation of data
• to avoid extensive changes to ABS processing systems and output formats.

6.35 The international merchandise trade country code is the output code used for the dissemination of international merchandise trade statistics by country. Changes to the international merchandise trade country codes are applied as soon as practicable after they have been:

• included in the UN location code classification
• recognised by DFAT
• implemented by the Department of Home Affairs in export and import documentation (e.g. included in Schedule 1, if relevant).

6.36 In some cases a new country is added to the UN location code classification but the country is not recognised by DFAT. In such instances, the new country code is corresponded to an existing international merchandise trade country code.

6.37 Appendix 7 (in the Data downloads section) provides the correspondence between UN location country codes and international merchandise trade statistics country codes. A list of countries used in the dissemination of international merchandise trade statistics is also provided in the pivot table in Appendix 8 (in the Data downloads section).

6.38 It is worth noting the concept of re-imports as it relates to country referring to goods originally exported, which are subsequently imported in either the same condition in which they were exported, or after undergoing repair or minor alteration which leaves them essentially unchanged. In Australia's international merchandise trade statistics, re-imports are published in a separate category in the country of origin classification. Re-imports are identified in ABS statistics as country of origin 'Australia'.

6.39 The overseas port of loading (imports) and the overseas port of discharge (exports) are collectively referred to as overseas ports and are reported to the Department of Home Affairs using the 5 digit UN location port code. The ABS corresponds each five letter UN location port code to a six-digit international merchandise trade overseas port code (e.g. BRRIO, name of Rio de Janeiro corresponds to ABS overseas port code 076001 with label 'Rio de Janeiro'), see Diagram 6.1 above.

6.40 For international merchandise trade overseas port codes, some ports are not separately identified due to the low volume of trade that occurs in those ports. Where a port is not separately identified, it is included under 'Other and Unspecified ports' for the particular country e.g. FRAVN - Avignon is corresponded to 'Other and unspecified ports-France' with ABS overseas port code 250399. Where no ports are separately identified within a country the trade is included under 'All Ports' for the particular country e.g. AFJAA - Jalalabad is corresponded to 'All Ports-Afghanistan' with ABS overseas port code 004399.

6.41 International merchandise trade port codes are maintained using the UN location port code. In some cases more than one UN location port code can be corresponded to a single international merchandise trade port code. Tejgaon (BDTEJ), Dhaka (BDDAC) and Kamalapur/Dhaka (BDKAM) are corresponded to Dacca, Bangladesh with ABS overseas port code 050100.

6.42 The ABS undertakes ad hoc overseas port reviews to identify changes in trading patterns. Where the volume of trade for a port that is not separately identified has increased significantly it will become separately identified. Where there has been a significant decline in trade for a separately identified port it will cease to be separately identified and grouped with ‘Other and Unspecified ports’ for the country or 'Other and Unspecified ports' for the country may also close and 'all ports' for the country may be opened. Historical data outside the 6 month revision period is not amended to reflect these changes.

6.43 The overseas ports used in Australia's international merchandise trade statistics are included in the country and port pivot table in Appendix 8 (in the Data downloads section). Similar to International Merchandise Trade by country, the overseas port 'Confidential Overseas Port' represents for imports goods affected by confidentiality restrictions from September 2008. For exports the 'Confidential Overseas Port' also represents goods affected by confidentiality restrictions (see paragraph 6.28 in the Country Trade Balances section).

6.44 For imports the following are provided in respect of state:

• State of final destination is the Australian state in which the imported goods are released from customs control. It does not necessarily equate to the state in which goods were discharged or the state in which they were consumed. The state in which the goods were consumed would be more relevant for some economic analysis but this information is not available. The ABS derives the state of final destination from the customs field 'port of final destination' which is reported to the Department of Home Affairs using a UN location code. The port of final destination field is not used in any other way in ABS processing and is not available in output.
• State of discharge is the Australian State/Territory in which imported goods are unloaded from the international carrier. This state field is derived from the reported field Australian port of discharge. International merchandise trade statistics by state of discharge can only be obtained by aggregating data for all ports within a state.

6.45 Analysis of recorded merchandise imports for financial years 1996-97 to 2011-12 indicates that between 94% and 98% (on average 96%) of imports have identical state of discharge and state of final destination.

6.46 A list of state codes is included in Table 6.3 below.

6.47 Users should be aware that international merchandise trade statistics by state include the category 'State not available for publication'. For imports, the category represents goods affected by confidentiality restrictions from September 2008. More detail is contained in paragraph 9.24.

6.48 For exports the following are provided in respect of state:

• State of loading is the Australian state in which the goods are loaded onto an international carrier for export. This state field is derived from the reported Australian port of loading. International merchandise trade statistics by state of loading can only be obtained by aggregating data for all ports within a state.
• State of origin has a similar meaning to country of origin as it is the Australian state in which the whole of production occurs or the final stage of production or manufacture occurs. It does not necessarily equate to the state in which goods were loaded onto the international carrier. The state of origin of the good is specifically reported to the Department of Home Affairs with the code used for reporting spelt out in the explanatory notes of the ABS publication Australian Harmonized Export Commodity Classification (AHECC) - Electronic Publication (cat. no. 1233.0).

6.49 The state of loading and the state of origin may be different e.g. goods produced or manufactured in Tasmania may be loaded onto an international carrier for export in Victoria.

6.50 The concept of re-exports (i.e. goods originally imported which are exported in either the same condition in which they were imported, or after undergoing repair or minor alterations which leave them essentially unchanged) is important to note as it relates to state of origin. In Australia's merchandise trade statistics, re-exports are published as a separate category in the state of origin classification (see Table 6.3 below).

6.51 Users should be aware that international merchandise trade statistics by state include the category 'State not available for publication'. For exports, the category represents goods affected by confidentiality restrictions from June 2013. More detail is contained in paragraph 9.24.

6.52 In Australia's international merchandise trade statistics Australian ports are derived from the UN location codes provided on the export and import declarations. The ABS corresponds each five letter UN location code to a three-digit international merchandise trade Australian port code (e.g. AUSYD corresponds to ABS Australian port code 101 with label 'Sydney'). The ABS Australian port code list includes combined offshore ports for Western Australia and the Northern Territory. These combined ports include a number of offshore facilities. For exports, the Australian port is the port of loading and for imports the Australian port is the port of discharge. The ABS maintains the international merchandise trade Australian port classification.

6.53 When changes to the international merchandise trade Australian port classification are necessary they will generally take effect from 1 July. Since July 2007, when changes are implemented to ABS port codes, statistics are recompiled for data within the revision period (see paragraphs 10.15 and 10.16 in the Data Dissemination chapter).

6.54 A list of port codes used in Australia's international merchandise trade statistics is included in the pivot table in Appendix 8 (in the Downloads tab). Similar to International Merchandise Trade by state, the Australian port 'Confidential Australian Ports' represents for imports goods affected by confidentiality restrictions from September 2008. For exports the 'Confidential Australian Ports' also represents goods affected by confidentiality restrictions (see paragraph 6.28 in the Country Trade Balances section).

6.55 The Standard Australian Classification of Countries (SACC) 2016 (cat. no. 1269.0), available on the ABS website, is the Australian statistical standard for social statistics classified by country. The SACC is a four-digit hierarchical classification, essentially based on the concept of geographic proximity. It groups neighbouring countries into progressively broader geographic areas on the basis of their similarity in terms of social, cultural, economic and political characteristics.

6.56 The SACC can be directly corresponded to the International Organization for Standardization country codes. The classification is intended for use whenever social, demographic and labour statistics are classified by country. The SACC, and UN location code have been broadly aligned at the most detailed level. The international merchandise trade country code classification aligns as far as practicable to the SACC. However, because international merchandise trade statistics are not fully aligned with the UN location code, consistent international merchandise trade statistics classified by the SACC list of countries cannot be easily produced.

7.1 The mode of transport describes the manner in which goods enter or leave Australia. The availability of international merchandise trade data by mode of transport is very important for many purposes, including the monitoring of international transport routes, the formulation of transportation policy and the assessment of the impact of trade on the environment.

7.2 The mode of transport is included on exports and imports declarations. The Department of Home Affairs accepts air, sea, post and other for imports or air and sea for exports as valid forms of mode of transport. When mode of transport air or sea is specified an airline code or a vessel name and vessel id must also be provided. Mode of transport post is only valid for imports; exports by post are identified through the goods type field. Mode of transport other applies to imports which are hand carried by a passenger but the ABS re-classifies these to air or sea as shown below. The mode of transport is used by the ABS to verify other information about the transaction e.g. the overseas port information, and it is aggregated and available for release at the most detailed commodity level.

7.3 The mode of transport classification defined below is used to disseminate international merchandise trade statistics. There are four categories in this classification. A description of what is included in each of the categories follows. 

• A - Air. Mode of transport A is used for goods entering or leaving Australia on an aircraft. It is also used for the import and export of aircraft which enter or leave Australia under their own power and imported goods which are hand carried on aircraft by passengers. Goods which use a postal service are excluded.
• S - Sea. Mode of transport S is used for goods entering or leaving Australia on a ship or vessel. It is also used for the import and export of ships and vessels that enter or leave Australia under their own power and for imported goods which are hand carried on ships by passengers. It also includes goods moved through pipelines. Goods which use a postal service are excluded.
• P - Post. Mode of transport P refers to goods that enter or leave Australia, either by sea or air, using a postal service.
• U - Unknown. Mode of transport U is used for imports when the data are not available for publication.

8.1 Quantity is an important dimension of international merchandise trade statistics. It is essential for various policy and analytical purposes including for the planning of transport infrastructure, the compilation of energy, agricultural and commodity statistics, assessing the impact of international trade on the environment, verifying trade values and compiling trade volume and price indexes.

8.2 This chapter will describe quantity measurement in Australia's international merchandise trade statistics, how the unit of quantity for a commodity is determined, the relationship between quantity and gross weight, and the difference between unit values and price indexes.

8.3 In 1995, the World Customs Organisation (WCO) adopted the use of standard units of quantity to promote international comparison and analysis of HS statistics. The WCO standard units of quantity are shown in Table 8.1 below.

8.4 In Australia's international merchandise trade statistics, the unit of quantity shown against a particular commodity code is that specified in the AHECC (8 digit level) or Customs Tariff (10 digit level) classification. Where feasible this is the WCO standard unit as specified in the HS. Where the WCO standard unit is not used for that commodity in the Australian industry, the unit of quantity will generally be the normal unit of quantity used for a particular commodity in the associated industry. For example, commodities which are exported in bulk have a unit of quantity of tonnes rather than kilograms.

8.5 In some cases, a single commodity code covers a diverse range of goods e.g. 'parts'. In these instances the unit of quantity is NR (Not Recorded) and quantity data are not provided.

8.6 For duty purposes and to meet the needs of users of the data, some commodities have second units of quantity. This is catered for in output by creating a companion tariff code against which only the second quantity is recorded. Only import commodity codes in Chapter 22 have a second unit of quantity, i.e. Litres (L) where the first unit of quantity is Litres of alcohol (LA).

8.7 Net weight is only recorded where that is the specified unit of quantity, but gross weight is recorded for all export transactions and all import declarations (see paragraphs 8.11 - 8.13 in the Quantity and Gross Weight section below). Conversion factors to the WCO standard units of quantity are not provided.

8.8 Where new statistical codes are added following a Classification Feasibility Study, the unit of quantity will be the WCO recommended unit unless it is not used or recognised in the Australian industry. In that case the unit of quantity will be determined in consultation with importers and exporters.

8.9 Table 8.2 below lists the units of quantity used in Australia's international merchandise trade statistics. Some of these units of quantity are used in historical output only (marked with an *).

8.10 Because the unit of quantity is recorded against the most detailed classification code, any quantity aggregation must be undertaken with care. For example, aggregating data for commodities with mixed units of quantity (as in the table below) will produce meaningless quantity totals.

8.11 Quantity is the measure of how many or how much of a commodity is imported or exported. A measure of quantity can include tonnes, kilograms, number, litres (and other units of measurement). Where quantity is recorded by weight e.g. kilograms, it does not include the weight of packaging. This is an important distinction from gross weight. Gross weight is the shipping weight of goods (measured in kilograms for ABS output) in the packaged state, excluding the weight of shipping containers. It includes the weight of moisture content, wrapping, crates, boxes and outside packages.

8.12 In Australia's merchandise trade statistics, net weight is not included on all transactions, except those where the unit of quantity is grams, kilograms or tonnes. Net weight excludes any outside packaging, inner containers or wrappings or any carrying medium (e.g. liquid) surrounding the goods.

8.13 Australia's international merchandise trade gross weight statistics are not used to estimate net weight. Gross weight is recorded for each commodity on a customs export declaration. For imports, gross weight is not recorded at the individual commodity level but total gross weight is reported for all the commodities on a customs import declaration. There is no reliable method to apportion gross weight to diverse commodities recorded within a declaration. ABS assign gross weight to one line/commodity on the declaration to enable commodity estimates to be produced. Therefore gross weight statistics for imports are only reliable when aggregated at the port or state level and not at the commodity level.

8.14 There are two indexes that can be produced to reflect changes in import and export prices: unit value indexes based primarily on customs documentation and price indexes based on survey data.

8.15 The average unit value of a commodity for any given period is the total value of shipments divided by the corresponding total quantity. This is often considered to be an average price at a given point in time but it represents the average unit value of a mixture of goods at a point in time.

8.16 Unit value indexes measure changes in the average unit value of individual commodities over time. The goods that comprise the shipments are not necessarily homogeneous and the indexes may be affected by changes in the mix of goods as well as by changes in their prices. For this reason unit value indexes may not provide a good measure of average price changes over time for groups of non-homogeneous goods. However, when goods are homogeneous and quality change is minimal (e.g. basic mining and agricultural goods) the index is more reliable.

8.17 The ABS does not publish average unit values or unit value indexes. Average unit values can be calculated from detailed commodity data released by the ABS but they should be used with caution as they are not a good measure of price change over time.

8.18 Price indexes for imports and exports using a variety of international classifications are published by the ABS in International Trade Price Indexes, Australia (cat. no. 6457.0). These indexes are primarily based on survey data but use international merchandise trade value and quantity information to calculate price movements for selected commodities, to identify units to sample and to derive weights for samples.

9.1 This chapter outlines how international merchandise trade statistics are confidentialised prior to their release. It explains the legal basis for confidentiality, the method of confidentiality imposed, the procedures used to manage confidentiality, and the effect of confidentiality on the statistics produced.

9.2 The ABS collects data from individuals and organisations as a routine part of statistical compilation. There is a legal and ethical responsibility for the ABS to respect and maintain the secrecy, privacy, and identity of those providing the information.

9.3 The majority of ABS data are collected under the Census and Statistics Act 1905 (C&S Act). The C&S Act empowers the ABS to direct persons, businesses, and other entities to provide the data requested. As such, the ABS has procedures in place to protect the identity of data providers. This enables and maintains public trust in the ABS and high-quality national statistics.

9.4 The confidentiality of the data collected is protected by provisions in the C&S Act which prescribe the way statistical information can be disclosed. Section 12 of the C&S Act prohibits publication or dissemination of statistics "in a manner that is likely to enable the identification of a particular person or organisation".

9.5 International merchandise trade statistics provided under the C&S Act are subject to the Census and Statistics (Information Release and Access) Determination 2018 (The Determination). The Determination provides for the release of a restricted range of information, including identifiable information about businesses and organisations, under special circumstances.

9.6 Under The Determination, foreign trade statistics derived wholly or in part from customs or imports documents, are subject to "passive confidentiality".  This means that international merchandise trade statistics are permitted for release without explicit regard to confidentiality, unless and until an individual or organisation demonstrates that such disclosure would be likely to enable the identification of that individual or organisation in the statistics. These individuals and organisations are referred to as “claimants” and their identifiability is protected through the application of an appropriate “restriction”.

9.7 The ABS recognises that detailed commodity statistics for exported and imported goods play an important role in the analysis of Australia's trade with the rest of the world. However, this need for detailed information must be balanced with a claimant's entitlement to data confidentiality.

9.8 Where confidentiality is required in international merchandise trade statistics, a restriction method is applied which reduces the risk of disclosure through re-classification of the identifiable data to a confidential commodities grouping.

9.9 The ABS determines the type of restriction by balancing the impact of statistical information available and the claimants' legal entitlements.

9.10 A variety of restrictions are available to protect the confidentiality of a claimant's data and each type of restriction is designed to protect a particular aspect of the data. The most appropriate restriction depends on the extent to which the claimant’s activities are identifiable. Restrictions are placed at the commodity level, and the data is restricted for all trade in that commodity, not just the data relating to the particular claimant/s.

9.11 The various confidentiality restrictions used are described in Table 9.1. These are presented in order of their impact – from most to least restrictive.

9.12 Table 9.2 sets out confidentiality restrictions that were previously used but have been discontinued prior to November 2023.

9.13 To demonstrate an example of a commonly applied confidentiality restriction and associated impact on the statistics, Tables 9.3 and 9.4 provide a comparison of a set of state by commodity synthetic aggregates with and without the application of a ‘No State Details’ restriction.

9.14 For a complete list of all the confidentiality restrictions applied to merchandise trade statistics since January 1988, refer to Table 92 of ABS publication International Trade in Goods – located in the ‘Data downloads’ section.

9.15 Where data are presented on an annual or year-to-date basis, users should take special care when interpreting the data in case there has been a change in confidentiality restrictions during the period.

9.16 For example, if a 'No Country Details' restriction is applied to a commodity for the first half of the year, and removed for the second half of the year, country data for that commodity for the full year will only reflect trade in the second half of the year. Data for the first half of the year will be included in the item 'combined confidential items' in statistics for that country. Complete data may not be presented for trade in the restricted item with any individual country, however any excluded data will be included in the individual country and commodity at the total level.

9.17 Users need to be aware that more highly aggregated statistics may also be affected by confidentiality restrictions. Using the example in the previous paragraph, not only will annual country statistics for the specific commodity be potentially incomplete, but country statistics for broader classifications such as ANZSIC, SITC or BEC, which include the confidential item, may also be incomplete.

9.18 Export and import concordances are accessible from the ‘Data downloads’ section of this publication. The historical correspondence for AHECC can be found in Appendix 6.1, and Customs tariff in Appendix 6.2. For an explanations of abbreviations, please see this link.

9.19 If an individual or organisation (the claimant) is concerned that the release of international merchandise trade data may identify their trade, they may submit a confidentiality ‘claim’. This is a request for an investigation to be undertaken into the identifiability of their data. If you wish to make such a request/claim, please download the ‘Confidentiality request form’ (available from the 'Data downloads' section of this publication) and return the completed form as per the included instructions.

9.20 After a claim has been received, the ABS will investigate the number of traders for the relevant commodity and the respective significance of their trade. If the investigation confirms that the claimant’s trade is likely to be identified, an appropriate restriction will be implemented from the next available reference month.

9.21 The application of a restriction for a particular commodity does not mean that it will be applied to all future statistics. Restrictions are reviewed at least every two years to determine whether they are still appropriate in their current form. When changes in trading patterns are identified, a restriction may be removed or amended.

9.22 In the lead up to a review, the ABS will contact the claimant (via the relevant contact officer) to request an updated ‘Confidentiality request form’ if the confidentiality claim is still required. If after multiple contact attempts, the claimant does not respond by the deadline, the ABS deactivates the claim, which may lead to the removal of one or more restrictions.

9.23 Outside of regular reviews, there are other scenarios that may lead to restrictions being modified or removed, including: a significant change in the pattern of trade; additional importers/exporters submitting claims for a restricted commodity; and a claimant informing the ABS that they are ceasing their claim for the relevant commodity.

Confidential data removed from country and state totals 

9.24 From September 2008 onwards for imports/clearances and from June 2013 onwards for exports, the method used to confidentialise country and state single dimension statistics changed. Country and state data subject to a 'No commodity details' or 'No value details' restriction are aggregated into a single confidential commodity code. Prior to September 2008 for imports and June 2013 for exports, all data were included in the relevant state total and country total (i.e. there are no excluded data from these totals).

Confidentiality of non-merchandise data for imports

9.25 Additional confidentiality restrictions apply to the non-merchandise trade Customs Tariff item, 9999319902. This code has the following confidentiality restrictions in place: 'No country details', 'No state details', 'No duty details', has been assigned a mode of transport = U (Unknown) and the data has not been added into country or state totals.

9.26 The confidentiality method applied to international merchandise trade statistics causes negative values to be displayed in some outputs. These values are deliberate adjustments for balancing purposes, to prevent double counting of data subject to confidentiality restrictions. For example, trade subject to a ‘No Country Details’ restriction contributes separately at the total commodity and total country levels. To prevent double counting across the totals in the dataset, a negative adjustment is also applied.

9.27 Where a commodity code has been confidentialised, it may be possible to release data aggregated over a longer period (for example quarterly, six-monthly, or annually), and/or aggregated across selected commodities, with a reduced confidentiality restriction. This is known as time and commodity aggregation.

9.28 Reports of this nature are checked to ensure that confidentiality is preserved. Greater level of aggregation often leads to the application of less impactful confidentiality restrictions.

9.29 Supply of these non-standard statistics is on a user pay basis and due to competing priorities, the ABS may not have capacity to supply data on an aggregation basis. Any request for aggregate data should be addressed to the International Trade Section, Australian Bureau of Statistics: international.trade@abs.gov.au.

10.1 Australia's international merchandise trade statistics are important economic statistics which serve a variety of needs. They are extensively used in their own right to measure the value and quantity of Australia's exports and imports of goods, and they are key inputs to the balance of payments, Australian national accounts and producer and international trade price indexes.

10.2 A large number of Australian Government Departments and Authorities and private sector clients use international merchandise trade statistics. Some of these users regularly subscribe to releases of international merchandise trade statistics. The ABS also supplies data to international organisations such as the United Nations Statistics Division (UNSD), the Organisation for Economic Co-operation and Development (OECD), and the International Monetary Fund (IMF).

10.3 To assist and encourage informed decision making the ABS provides open access to statistics available from the ABS website. For example, the precise date when the statistics will be released is announced in advance.

10.4 This chapter will describe the dissemination of international merchandise trade statistics. It will detail the release practices used, the revisions policy, the data available free on the ABS website and how it can be accessed, and other ways to access these statistics.

10.5 In providing a national statistical service, the ABS is committed to a policy of open access to official statistics by all levels of governments and the community. The ABS dissemination objectives are to achieve widespread dissemination of information, while recovering the costs involved in providing products and services obtained for private benefit. The balancing of community service obligations and cost recovery principles underpins the ABS dissemination and pricing policy.

10.6 To fulfil legislative requirements and enhance community access to statistics, all current and a number of previous ABS publications are available free from the ABS website. In addition, the ABS distributes copies of its printed publications to selected libraries including the National Library of Australia, State libraries and Parliamentary libraries.

10.7 The ABS recovers from users the costs of providing more detailed information than that included free on the ABS website. The price charged covers overheads incurred beyond the costs of collection and production of clean unit record files from which the information is produced. In the case of international merchandise trade statistics, the price charged covers the cost of data storage, extraction, confidentialisation, distribution and marketing. For further information see ABS Pricing Policy.

10.8 Release dates for ABS publications are publicly announced six months in advance in publications and on the ABS release calendar on the ABS website. The statistics are embargoed until 11.30 am Canberra time on the day of their release.

10.9 The ABS releases a monthly publication presenting international merchandise trade statistics: 

• International Trade in Goods (cat. no. 5368.0), normally released 23 working days after the end of the reference month.

10.10 To assist analysis and data interpretation the ABS also produces, on a monthly basis, a complete list of confidentiality restrictions applied to merchandise trade statistics.  Refer to Table 92 (located in the ‘Data downloads’ section) in International Trade in Goods.

10.11 On rare occasions the normal release dates may change, for example when major changes to systems or classifications are implemented. When this occurs the revised release date is announced well in advance on the ABS website.

10.12 International Trade in Goods (cat. no. 5368.0) contains monthly estimates of Australia's international trade in goods on a balance of payments basis (including seasonally adjusted data) and merchandise import and export statistics on an international merchandise trade basis classified by commodity, country and state. Once the relevant publications are released, the detailed import and export statistics become available. Products which need to be customised, such as subscriptions and ad hoc data requests, may now be disseminated to clients. This occurs no earlier than 1pm on release days.

10.13 The ABS makes all publications and standard products available free from the ABS website. The release dates and times are also announced in advance and products are released to all users at the same time.

10.14 This policy applies to all ABS data including international merchandise trade statistics.

10.15 Australia's international merchandise trade statistics are subject to revision after they are initially published. Although the revisions made are typically quite small as a proportion of the monthly international merchandise trade results. Revisions may arise because:

• an amending entry is supplied to the Department of Home Affairs
• errors are identified and corrected by the ABS after initial processing
• errors are identified through queries from statistical users about the published data
• time series are recompiled because of major changes to classifications, concepts, sources or methods.

10.16 The previous six months of exports and imports data can be revised. Revisions are usually restricted to the previous six months because:

• analysis shows that revisions for earlier periods are insignificant
• the subscription services are designed to only deliver data for the current month and the previous six months.

10.17 The impact of major changes to classifications, concepts, sources or methods are notified in advance of implementation. In most cases these changes will result in revisions to the entire or a significant part of the time series to retain methodological consistency. However, the time series for the HS classification (i.e. the detailed transactions level dataset used to compile international merchandise trade statistics) are not revised when the classification changes. This is due to the frequency of changes, the lack of information available for revising the series and the cost of doing so.

10.18 To assist users in interpreting the time series data available on the ABS website, Appendix 2 (in the Data downloads section) outlines the major changes to international merchandise trade statistics classifications, concepts, sources and methods since January 1988. The impact of changes is managed in one of the following ways:

• break in series - when changes to data are made from a point in time. A break in series is used for relatively minor changes or when there are no comparable data on both the new and old bases e.g. changes to the HS classification.
• bridging series - a bridging series is included for more significant changes to classifications e.g. the introduction of a SITC revision. A bridging series enables users to see the impact of the new classification for a period of data e.g. six months or one year.
• backcasting - when an entire series of previous published data is revised and put on the new basis as a result of a significant methodological or conceptual change e.g. the introduction of the HS and the change to the timing basis for exports.

10.19 Correspondences provide a link between old and new classifications. Users of international merchandise trade statistics should use correspondences to help understand the impact of any classification change. For more details see the Classifications chapter (paragraphs 5.4-5.14).

10.20 The ABS recognises the importance of international merchandise trade statistics to a wide variety of statistical users. Except where data are protected by confidentiality restrictions, aggregated data are made available at a very detailed level. The output dimensions are included in Table 10.1 below. There are other data that can be disseminated on request (for more details see paragraphs 10.34-10.39 in the Customised Data section below) but users should be aware that such requests attract a fee and are considered on a case by case basis which takes into account the quality assurance of the data and confidentiality.

10.21 International merchandise trade statistics are compiled by the ABS on a monthly basis and data can be extracted for any combination or aggregation of months e.g. quarters, six month periods, calendar or financial years. Some time series back to January 1988 and earlier periods are available on the ABS website (also see Appendix 9 in the Data downloads section). Detailed data on microfiche are available from selected libraries including the National Library of Australia, State libraries and Parliamentary libraries. Earlier data (particularly for periods prior to 1988) may not be comparable with current data due to changes in concepts and coverage over time.

10.22 Statistics are available for exports, imports and import clearances:

• Exports reflect goods that leave Australia. They include
  • goods that have been produced or manufactured in Australia
  • in separately identifiable form, re-exports of imported goods.
• Imports reflect goods that arrive in Australia. They include
  • goods brought into Australia directly for home consumption following the payment of duty (Customs Nature 10 entries)
  • goods which are entered into Department of Home Affairs (bonded) warehouses (Customs Nature 20 entries).
• Import clearances reflect goods that are cleared into the Australian market for home consumption (following the payment of duty). They include
  • goods brought into Australia directly for home consumption (Customs Nature 10 entries)
  • goods cleared from a bonded warehouse (Customs Nature 30 entries).

10.23 Users have a choice of several commodity classifications (i.e. HS, SITC, BEC, BoPBEC (for imports) and ANZSIC (the industry most likely to have produced the goods)) when specifying their data requirements. A detailed description of these classifications is provided in the Classifications chapter. The choice of classification depends on several factors including:

• whether data are required for exports and / or imports
• the level of detail required i.e. data may be required for the total trade in alcohol, or something more specific, such as imports of vodka
• whether only value of trade, or both value and quantity data, are required. Quantity information for SITC and broad level HS items is not standard in output as it is not always meaningful. However, it can be made available on request.

10.24 International merchandise trade statistics are published monthly in:

• International Trade in Goods (cat. no. 5368.0), which presents monthly estimates of Australia's international trade in goods on a balance of payments basis (including seasonally adjusted data) and merchandise import and export statistics on an international merchandise trade basis. International merchandise trade data are adjusted for coverage and timing differences to put them on a balance of payments basis. In this publication, merchandise imports and exports are provided at the one and two digit SITC level with selected commodities at the three digit level. Once this publication is released detailed exports information can be disseminated to users. For analysis including graphs see "Analysis and Comments".

10.25 This publications is available electronically on the ABS website together with Excel time series data and data cubes. The spreadsheets contain a variety of commodity data including import and/or export totals by country or state. All the time series, can be downloaded free of charge. A list of the international merchandise trade time series available on the ABS website is provided in Appendix 9 (in the Data downloads section). Also included with the publications are analysis and explanatory information about the statistics.

10.26 In addition to International Trade in Goods (cat. no. 5368.0), the ABS also produces:

• Australian Harmonized Export Commodity Classification (AHECC) - Electronic Publication (cat. no. 1233.0) which is used in the preparation of export documentation and in the compilation of Australian export statistics
• A list of all import and export commodities which have been subject to confidentiality restrictions since January 1988. See Table 92 in International Trade in Goods (for more details see paragraphs 9.24-9.25 in the Data Confidentiality chapter). 

10.27 Appendix 9 (in the Data downloads section) also lists the international merchandise trade discontinued publications (by catalogue number) available on the ABS website and a description of the types of tables included. The tables are only available as part of the PDF publication.

10.28 Some historical broad level international merchandise trade statistics, commentary and conceptual information are also included in the Year Book Australia (cat. no. 1301.0), available on the ABS website.

ABS.Stat

10.29 The way data is disseminated in the ABS is currently undergoing change. ABS.Stat is a free web tool that presents ABS statistics in a searchable, flexible and dynamic way. It increases the usability of ABS data by providing a versatile interface and integration of data across a range of aggregated ABS statistics. Currently ABS international merchandise trade statistics are available on the website as static Excel spreadsheets and PDF file downloads. In contrast, ABS.Stat provides a dynamic and direct method of accessing ABS data through the use of dynamic tables and intuitive search functionality. ABS.Stat also provides web services in Statistical Data and Metadata Exchange (SDMX) format for automated machine-to-machine data exchange.

10.30 At the time of writing, ABS.Stat is publicly released as a beta version with a limited range of ABS statistics. It is available on the ABS BetaWorks website. This tool is continually being improved so interested users should refer to the ABS website for further developments.

10.31 Users sometimes require more detailed information than that disseminated on the ABS website. Where data are not available at the required level of detail, information consultancy can provide customised data on a fee-for-service basis. Subscriptions take the form of regularly delivered reports. Users can also request one-off (ad hoc) statistical reports. These reports are accompanied by supporting information to assist in interpreting the data. For more information see Information Consultancy Services.

10.32 Information is available on a monthly, quarterly, six-monthly or annual basis and can be supplied on a range of media or via email. At any point in time, the latest version of the data are included in subscriptions.

10.33 Users can submit data requests via the online Information Consultancy Form or contact the National Information Referral Service on 1300135070 or email: client.services@abs.gov.au.

10.34 In addition, the ABS' International Trade in Goods and Services Section can sometimes disseminate more detailed data on a fee-for-service basis as special reports. For example, data that is subject to confidentiality restrictions can sometimes be provided on a more aggregated basis resulting in reduced confidentiality. For more information, see the Data Confidentiality chapter (paragraphs 9.27-9.29).

10.35 A great deal of international merchandise trade statistics are also available from international organisations. Australia, like other countries who are also members of the international statistical community supply trade statistics to the United Nations Statistics Division (UNSD), Organisation for Economic Co-operation and Development (OECD) and the International Monetary Fund (IMF). These statistics are particularly useful when conducting country comparisons as all are on a single currency (normally US dollar) basis. Interested users should visit these organisations' websites for further information.

• United Nations Statistics Division (UNSD)
• Organisation for Economic Co-operation and Development (OECD)
• International Monetary Fund (IMF)

11.1 Among national statistical agencies, quality is generally accepted as "fitness for purpose". Fitness for purpose implies an assessment of an output, with specific reference to its intended objectives or aims. Quality is therefore a multidimensional concept which does not only include the accuracy of statistics, but also includes other aspects such as relevance and interpretability.

11.2 The ABS Data Quality Framework uses seven dimensions of quality, reflecting a broad and inclusive approach to quality definition and assessment. The seven dimensions of quality are institutional environment, relevance, timeliness, accuracy, coherence, interpretability and accessibility.

11.3 There are often trade-offs between the different dimensions of quality. In order to make economic statistics timely enough to be relevant indicators for the analysis of current and recent economic conditions this is likely to be at the expense of some degree of accuracy. The ABS, in consultation with data users, aims to optimise the different dimensions of quality.

11.4 This chapter will assess the quality of international merchandise trade statistics using the seven dimensions of quality. When assessing the quality of statistics the ABS and international organisations recommend that all seven dimensions should be considered together but some statistical users may place more weight on particular dimensions.

11.5 International merchandise trade statistics are produced using administrative by-product information from The Department of Home Affairs. Exports and imports data are collected under the Customs Act 1901 with exporters and importers having a legal obligation to provide documentation to the Department of Home Affairs. The Department of Home Affair's legislation also allows the information to be passed to the ABS for statistical purposes.

11.6 The ABS and the Department of Home Affairs foster a close relationship to ensure ongoing cooperation. An Agency Heads Agreement between the two organisations, signed by the Australian Statistician and the Chief Executive Officer of the Department of Home Affairs, is in place. The agreement formalises the relationship between the two agencies and refers to a set of subsidiary agreements covering a range of issues including: the provision of import and export declarations to the ABS; and management of system changes which affect the provision of data between the agencies. In addition, the Deputy Agency Heads meet annually to review the relationship and discuss strategic issues.

11.7 Australian international merchandise trade statistics are compiled within an institutional environment which focusses on quality and emphasises objectivity and professionalism. The environment in which the Department of Home Affairs operates is similarly underpinned by legislation to ensure the quality of customs declarations and the continued supply of these data to the ABS.

11.8 For information on the legislative obligations of the ABS, financing and governance arrangements, and mechanisms for scrutiny of ABS operations, please see ABS Institutional Environment.

11.9 Relevance refers to how well the statistics meet the needs of users. It can be assessed by considering the purpose or aim of the data collection, compliance against relevant international standards and the use of the statistics.

11.10 International merchandise trade statistics are compiled from customs declarations.

11.11 Details of exports and imports of goods with values greater than or equal to the respective thresholds ($2,000 and $1,000) must be entered on customs declarations prior to exit from or entry to Australia. The detailed information provided on customs declarations ensures the relevance of the data as it includes: the commodity classification and a description of the goods, the value, quantity, gross weight, country of origin or country of final destination, and where appropriate, port of loading, port of discharge, mode of transport export goods type and duty related fields.

11.12 The exclusion of small value records has historically had a limited impact on the relevance of the statistics but the impact has increased in recent years due to the ease of individuals purchasing goods over the internet. Estimates of the value of trade below the thresholds are included in Balance of Payments statistics and the ABS has recently reviewed the quality of those estimates.

11.13 The ABS actively promotes the use of international standards for compiling international merchandise trade and other economic statistics to ensure comparability across its own economic collections and outputs and those of other statistical organisations. The conceptual framework followed for Australia's international merchandise trade statistics is broadly consistent with the international standards set out in the UN publication IMTS 2010. The various editions of this standard have been developed over many years and involved the input of international organisations, national statistical agencies and other experts (academics and users). Periodic updates are necessary to accommodate changes in the way international merchandise trade is conducted e.g. increasing globalisation.

11.14 Australia's international merchandise trade statistics align with many of the recommendations contained in IMTS 2010. The standards are applied with consideration to the availability of timely and accurate information and the requirements of Australian data providers and users. For example, to enable accurate reporting by exporters and importers the unit of quantity required on customs declarations reflects the unit in use and most relevant to the Australian industry.

11.15 A wide variety of organisations (government, business, national and international) and individuals use international merchandise trade statistics. The data use varies from information about a single commodity to access to the complete aggregate (and confidentialised) dataset. While some statistical users access the data periodically, many users of international merchandise trade statistics subscribe to and use monthly data on a regular basis.

11.16 International merchandise trade statistics are based on a large number of individual transactions and are released at a very detailed aggregated level e.g. 8-digit exports and 10-digit imports commodity by Australian port, country and overseas port. The statistics, in conjunction with other related economic statistics, are used to analyse Australia's external trade performance, formulate and evaluate macroeconomic policy (including trade policy, trade treaties and foreign investment policy), analyse trends in income, capital flows and patterns of investment into and out of the economy, and to undertake international comparisons. As the ABS has limited resources available for ensuring the quality of all the detailed international merchandise trade statistics, resources are focussed on the data required for macroeconomic statistics.

11.17 Import and export statistics have been released by the ABS for over 100 years. The longevity of the statistics indicates the ongoing usefulness of the data.

11.18 The relevance of international merchandise trade statistics are enhanced by the inclusion of feature articles or additional releases about the statistics. A list of articles is included on the ABS website.

11.19 Timeliness refers to the delay between the reference period to which the data pertains and the date on which the data become available. There is an important trade-off between the accuracy of the estimates and the timeliness of their release. As international merchandise trade data are important inputs to major economic indicators and there is widespread use of the data for other purposes, there is a need to publish the statistics on a timely basis, consistent with achieving acceptable levels of accuracy.

11.20 To the extent that complete or accurate data are not available within the desired time frame, there will be compromises in data quality. For example, exporters who have been accorded Confirming Exporter Status by the Department of Home Affairs can revise the value, quantity and weight details after the goods have been included in the initial export estimates, see revisions analysis below.

11.21 The timeliness of public release of Australia's international merchandise trade statistics rates favourably against similar, detailed statistics produced by our major trading partners.

11.22 Accuracy refers to the degree to which the data correctly describe the phenomenon they were designed to measure

11.23 The statistics are compiled from export and import declarations and are not collected by sample survey so they are not subject to sampling errors. However, they are subject to reporter error. While the Department of Home Affairs apply various logical and legality checks and are able to audit business records they operate in a self-regulation environment which mainly targets declarations with perceived risk.

11.24 There has been significant growth in the volume of imports with values below the import declaration threshold (see the Low Value threshold update (Technical Note) in the August 2014 issue of International Trade in Goods (cat. no. 5368.0) for more information). Goods valued $1,000 or less are excluded from international merchandise trade statistics. The number and value of export transactions which are excluded from the statistics are much lower despite the higher export declaration threshold ($2,000).

11.25 For details regarding the difference between scope (economic territory) and coverage (statistical territory), refer to Table 2.1 in the Scope, Coverage and Treatments chapter.

11.26 The ABS has implemented best practice input and output processing systems, processes and procedures to ensure the quality of international merchandise trade statistics. These include: 

• Quality strategies to ensure the data is fit for purpose e.g. edit checks, significance editing, data confrontation with other sources.
• In cases where initial unconfirmed estimates of data provided by exporters who have been accorded Confirming Exporter Status by the Department of Home affairs are identified as inconsistent with confirmed data, careful estimates based on previous trends are made. Such estimates replace unconfirmed data until confirmed data are provided.
• Testing and evaluation plans prior to the introduction of any new or updated processes/and or systems to ensure errors and potential quality issues are identified and resolved.
• Training and development of staff to ensure they have the skills and abilities to identify key statistical issues and potential quality impacts.
• Risk mitigation and assessment processes e.g. quality gates and data management information to ensure all data are received, loaded, processed and accounted for at each processing stage.

11.27 Methodological changes can affect the comparability of data before and after the changes are implemented but they are generally directed towards improving the overall quality of the statistics. Historically there have been a small number of significant methodological changes to international merchandise trade statistics. In the last 25 years the most significant changes occurred in 1988 with the introduction of the Harmonized System and in 1992 when exports were converted from a processing date to a departure date basis. Both these changes were significant at the point of introduction but represented major improvements to the quality and international comparability of the statistics.

11.28 Wherever possible the ABS attempts to assist users to understand changes to methods or classifications by:

• notifying changes in advance
• preparing and releasing information about the impact of changes
• preparing correspondences showing the links between the new and old classifications
• providing information on both bases for a limited period or less frequently using look-up tables to re-classify information to the previous classification or method.

11.29 The accuracy and accessibility of international merchandise trade statistics is affected by confidentiality restrictions. International merchandise trade statistics are subject to confidentiality restrictions which means statistics are able to be released unless, and until, an individual or organisation demonstrates that disclosure would be likely to enable the identification of that person or organisation. Where a request has been made to confidentialise data, the full detailed dataset is not available to users, but the value of confidential data is included in total exports and imports.

11.30 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 the Department of Home Affairs and ABS quality checking procedures and may therefore contribute to inaccuracies in the statistics.

11.31 For imports the Department of Home Affairs system uses official exchange rates to convert values at the time of export from the overseas country of export, this minimises currency conversion errors. Exporters are required to declare goods prior to export and these are converted to Australian dollars by the ABS from RBA data.

11.32 Exporters may undertake currency conversions using a different exchange rate, or one applying on a different day to that at the time of exportation. This includes practices such as hedging which are designed to offset adverse currency movements. However, as the majority of exports are negotiated in one of the reportable currencies, any inappropriate conversion practices in the remaining exports will have a very limited impact on the statistics.

11.33 The ABS compiles import and export declarations, as lodged with The Department of Home Affairs through the Integrated Cargo System, for the purpose of creating economic statistics. While The Department of Home Affairs and the ABS apply various logic and quality assurance checks in order to ensure that trade statistics are timely and fit for purpose at aggregate levels, ABS editors focus on the most significant transactions. As such, care should be exercised in the use and interpretation of detailed international merchandise trade estimates. In addition, the ABS International Merchandise Trade statistics are subject to confidentiality restrictions. Any detailed International Merchandise Trade data should be read in conjunction with the Confidential Commodities List which is available in Table 92 of International Trade in Goods (located in the ‘Data downloads’ section).

11.34 A revisions analysis for the period July 2008 to June 2012 (48 months) is included as another way to assess the quality of international merchandise trade statistics. The analysis measures the mean bias and dispersion between the average initial monthly published result for the period and the average final published result.

11.35 Bias is a measure of the extent to which initial estimates are lower or higher than the final estimate and 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 average revision for each category as a percentage of the average initial value of that category for the month, and then calculating the average of these percentage revisions.

11.36 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 of a category 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.

11.37 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.

11.38 Table 11.3 below shows that the revisions to initial published monthly export estimates had on average, a positive bias of $490 million or 2.21% for the period July 2012 to June 2014. Negatively biased revisions indicate that the initial estimate tends to overstate the latest estimate. The dispersion measures were generally 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 also $490 million or 2.21% of the average monthly estimate.

11.39 The main contributors to the negatively biased revisions were Crude materials, inedible, except fuels and Mineral fuels, lubricants and related materials. The unscaled and scaled dispersion measures were also higher for these SITC sections due to:

• relatively higher values and a greater contribution to total exports of the commodities included in these SITC sections.
• at the time of initial reporting to the Department of Home Affairs the quantity and value information for these commodities is estimated and revised in later months when the actual transaction values are available. This contributed significantly to revisions when:
• the timing of export contracts for these commodities changed from annual to quarterly and then monthly
• the exchange rate depreciated significantly
• Commodity prices, in particular Iron Ore depreciated significantly.

11.40 As crude material prices dropped in 2014, reporters initial estimates to the Department of Home Affairs were often overstated. In response, the Australian Bureau of Statistics applied an adjustment to the originally reported data, which was subject to revision, based on historical trends. The figures are revised in subsequent months, once actual transaction values are available. This method yields significantly more accurate results in comparison to solely relying on administrative Department of Home Affairs data, at both aggregate and transactional levels. These changes are not reflected in the current analysis as they were only implemented in January 2015. However, post-January 2015 outputs have shown a significant reduction in data revisions.

11.41 The average revisions for all other SITC sections were downward as shown by the negative bias measures in Table 11.3 below.

11.42 Table 11.4 below shows that the revisions to initial published monthly import estimates had on average a negative bias of $118 million or 0.58% for the period July 2012 to June 2014, indicating that the initial estimate overstated the final estimate. This pattern is also reflected in the revisions at the SITC section level. The dispersion measures were slightly higher, indicating that the individual monthly revisions were both positive and negative.

11.43 Coherence refers to the internal consistency of data at a point in time and over time, as well as its comparability with other sources of information.

11.44 Coherence is an important component of quality as it provides information about any limitations with comparing the data with other data sources. The use of standard concepts and definitions and robust methods promote coherence. Coherence with other statistics does not on its own mean the statistics are accurate, as the statistics that are being compared may suffer from similar sized errors in the same direction.

11.45 International merchandise trade data are almost exclusively compiled from customs declarations. This together with a robust processing system (with separate environments for testing and training) and established processes for receiving, editing, aggregating, confidentialising, finalising and disseminating data ensures a high level of coherence.

11.46 There are a range of checks applied at various stages in the ABS compilation processes to ensure the consistency of the data. For example, there are edits which may identify errors in either the gross weight or quantity when the unit of quantity is grams, kilograms or tonnes. Other edits applied at the individual transaction level check the validity of the relationship between related fields, for example, if the mode of transport is sea but the goods were loaded in Switzerland. These inconsistencies are detected and corrected prior to the release of initial estimates.

11.47 International merchandise imports and exports are one of the first releases of monthly economic statistics so there are limited published sources available to confront against the estimates. Consequently, considerable attention is given to ensuring the consistency of the monthly aggregates at the HS 6 digit and SITC 2 digit level with previous monthly results. Unusual movements may be verified or corrected using publicly available information (e.g. press reports, company websites) or following contact with the exporter or importer.

11.48 Because the ABS publishes a large range of economic data it strives to ensure coherence across these estimates. To achieve this processes have been implemented including regular quarterly meetings between representatives from the various economic collections. At these meetings there are discussions which lead to agreement on the statistical treatment (including valuation, timing and classification) of recent economic events such as major resource projects.

11.49 Any significant changes to the established processes must be reviewed and approved by a Methods Board. The Methods Board consists of a panel of ABS subject-matter experts who are responsible for endorsing new methodologies, and enhancing the coherence of statistics across the ABS.

11.50 The HS was adopted internationally by the Customs and Co-operation Council in 1983 and entered into force in January 1988. The Department of Home Affairs and the ABS have used the HS classification since that time so comparison of the data (up to the 6 digit level) with other countries using the HS is possible from that date. The ABS also publishes international merchandise trade statistics by SITC for comparison at the international level. [Confidentiality restrictions can change the availability of data at any point so care should be taken when comparing data over time and with other countries. Confidentiality restrictions are not applied to the value of total trade (imports, import clearances or exports)].

11.51 Australia's international merchandise trade statistics are compiled substantially in accordance with IMTS 2010 which is also broadly consistent with SNA 2008 and BPM6. Australia, like many of its trading partners, publishes the details of its compliance with the international standards so statistical users are able to make informed decisions about the level of data comparability. Australia's proposed stance against the international standards are set out in the Information Paper: Proposed Implementation of the New International Standard for International Merchandise Trade Statistics (cat. no. 5368.0.55.020). Reasons for differences in the statistics released by each country are also available, for example, IMTS 2010 recommends that imports are valued on a CIF basis. While Australia does compile imports on a CIF basis and have these available for release, the published imports valuation is customs value (a FOB type valuation, see paragraph 3.12 in the Trade System, Valuation and Time of Recording chapter) which is the value on which customs duty is applied and is of a higher quality than the CIF value at the commodity level. In Australia, a FOB type value is used for both international merchandise trade, balance of payments and national accounts statistics so coherence between these data is maintained. However, comparisons of Australia's exports to a country which publishes its imports (from Australia) on a CIF basis will be affected because of the different valuation basis (as well as other differences including timing, coverage (e.g. lower or higher thresholds) and country classification).

11.52 The ABS has conducted bilateral reconciliations of international merchandise trade data with the United States of America, Japan, New Zealand and the European Union. These studies demonstrated that the main reasons for differences in the statistics of Australia and its major trading partners are due to the conceptual and methodological factors underlying the compilation of the data. The ABS does not have the resources to conduct further bilateral reconciliation studies. Statistical users interested in conducting their own bilateral studies should see:

• the International Trade Releases page on the ABS website which contains links to international merchandise trade statistical publications and previous bilateral studies.
• DFAT Trade Publications
• UNdata - Commodity Trade Statistics Database
• the websites of Australia's main trading partners e.g. USA Trade Online.

11.53 Interpretability refers to the availability of information to help provide insight into the data. Interpretability is an important component of quality as it enables the information to be understood and utilised appropriately. Statistical information that users cannot understand, or can easily misunderstand, has limited value and may have negative value. Providing sufficient information to allow users to properly interpret statistical information is therefore essential. Information that describes and defines data is known as metadata. Managing interpretability is primarily concerned with the provision of metadata.

11.54 The information needed to understand statistical data falls under three broad headings: 

• the concepts, definitions and classifications that underlie the data
• the sources and methods used to collect and compile the data
• indicators of accuracy of the data.

The description of methods also serves as a surrogate indicator of accuracy – it allows users to assess suitability for purpose.

11.55 There are close relationships between these three headings and the other dimensions of quality. The underlying concepts and classifications used are also a prime determinant of coherence and the degree to which they conform with national and international standards should be apparent from the metadata.

11.56 This publication defines and discusses the major concepts, definitions and classifications that underlie international merchandise trade statistics. It also describes the methods used to transform input data into statistical outputs and discusses the accuracy of the estimates. Statistical users can draw valid comparisons with merchandise trade data produced by other countries, by taking into account any differences e.g. different thresholds or time of recording.

11.57 Supplementing this publication are an assortment of information papers and feature articles which draw attention to issues impacting on the data such as changes to the classifications, systems, concepts or standards, major data revisions and changes in data dissemination practices. Feature articles and technical notes are written on a regular basis to inform users of emerging issues and method changes and their impact on the statistics. Information papers report on various aspects of research undertaken on topics relevant to Australia's international merchandise trade statistics, see International Trade Releases.

11.58 Accessibility refers to the ease of access to data by users, including the ease with which the existence of information can be ascertained, as well as the suitability of the form or medium through which information can be accessed. The cost of information may also represent an aspect of accessibility for some users. This is a key component of quality as it relates directly to the capacity of users to identify the availability of relevant information, and then access it in a convenient and suitable manner.

11.59 In discussing accessibility of international merchandise trade statistics, the following aspects will be covered: data availability, metadata availability (i.e. information about the data) and the degree of interpretive assistance available to users of the data. Data availability involves issues of data presentation and distribution media as well as the availability of non-standard data. Metadata availability is whether information concerning the concepts, sources and methods associated with the data is provided to statistical users. Accessibility also encompasses whether the information surrounding or supporting the data is openly available to the public.

11.60 Most aspects of accessibility are determined by ABS wide dissemination policies and delivery systems.

11.61 The ABS provides users with ready access to international merchandise trade statistics. All publications and standard products are available free of charge on the ABS website and this includes international merchandise trade information.

11.62 Users requiring more detail than available on the ABS website can submit a data request and if the information is available it will be provided on a fee-for-service basis.

11.63 The ABS has a range of ways of providing users with information about international merchandise trade statistics. This publication explains the concepts, sources and methods which underlie the compilation of Australia's international merchandise trade statistics.

11.64 Each international merchandise trade data release also includes metadata information in the explanatory notes, main features, changes in this issue, feature articles and in the actual tables, spreadsheets and data cubes.

11.65 Changes to classifications or methodologies are advised to users well in advance of implementation through specially prepared information papers and information in the data releases.

11.66 Release dates for international merchandise trade publications are announced well in advance on the ABS website, in publications and in the Release Advice for ABS Publications.

11.67 In releasing statistics, the ABS adheres to long established principles that the results of statistical collections should be made available as soon as practicable and should be available to all users at the same time. An embargo is placed on the release of statistics until 11.30 am (Canberra time) on the designated day of release. There are strict security procedures to ensure that there is no unauthorised access to statistics prior to release.

11.68 Each international merchandise trade release contains information about who to contact if users need more information about the statistics. Depending on the nature of the inquiry ABS staff in the National Information and Referral Service or a subject matter expert can be contacted.

11.69 The National Information and Referral Service provides help to find or access ABS products and services by telephone (1300 135 070) or secure email, see ABS Inquiry Form. Limited free data and information is given over the phone. The National Relay Service provides services for the hearing and speech impaired.

12.1 International merchandise trade statistics are important statistics in their own right, as measures of the nature, quantity and value of trade between Australia and the rest of the world. They are an important data source for other statistics produced by the ABS, such as the balance of payments, the national accounts, and the international trade price indexes. Selected international merchandise trade statistics are also used in and/or to validate other statistics produced by the ABS. For example, international merchandise trade data are used in validating data compiled for the Energy Accounts, Australia (cat. no. 4604.0).

12.2 This chapter begins by briefly describing the conceptual frameworks underlying economic statistics namely the International Merchandise Trade Statistics: Concepts and Definitions (IMTS 2010), System of National Accounts (SNA 2008) and Balance of Payments and International Investment Manual (BPM6). It then explains the relationships between Australia's international merchandise trade statistics and its balance of payments, national accounts and international trade price indexes, which all use international merchandise trade data.

12.3 IMTS 2010 was developed after 2008 SNA and BPM6. It therefore contains recommendations intended to make data compiled on an IMTS 2010 basis as consistent with the requirements of those systems as possible. However, the importance of providing statistics about the physical movement of goods across borders means that the main elements of IMTS 2010 are different to 2008 SNA and BPM6 which are based on the principles of economic ownership and residence. The conceptual differences between IMTS 2010 and BPM6 are fully explained in IMTS 2010, Annex F. These differences are explained in the context of Australia's statistics in Table 12.1 below.

12.4 The balance of payments is a statement that summarises the economic transactions between residents and non-residents of the compiling economy during a specific time period. It consists of the goods and services account, the primary income account, the secondary income account, the capital account and the financial account.

12.5 The goods component of the goods and services account in Australia's balance of payments is largely compiled from international merchandise trade data. To compile goods data on a balance of payments basis adjustments are applied to international merchandise trade data to ensure that the transactions are correctly recorded in terms of coverage, timing and valuation.

12.6 Coverage adjustments are made to: include transactions which are not part of the international merchandise trade data; and remove transactions recorded in international merchandise trade which are not between residents and non-residents. Timing adjustments are made to ensure transactions are recorded in the period in which ownership changed, rather than in the period in which the transaction was recorded in international merchandise trade statistics. Valuation adjustments are made when the value recorded on the international merchandise trade transaction is found to be incorrectly estimated or reported.

12.7 Table 12.1 below lists and explains the differences between Australia's international merchandise trade statistics and the goods component of the balance of payments. These differences can be categorised as: 

• differences between the standards (IMTS 2010 and BPM6)
• differences due to Australia's practical application of the international standards.

The type of adjustment and treatment in Australia's balance of payments is also explained.

12.8 There are also differences in the classification and presentation of goods credits (exports) and goods debits (imports) in the balance of payments. These are shown in Table 12.2 below.

12.9 The balance on goods is published in the monthly International Trade in Goods (cat no 5368.0) This publication presents the major aggregates for, and the balance on, international trade in goods (on a balance of payments basis) in original, seasonally adjusted and trend terms. Each quarter, Australia's balance of payments is published in Balance of Payments and International Investment Position, Australia (cat. no. 5302.0). In this publication, the original quarterly data for the latest quarter is the sum of the monthly data published in International Trade in Goods (cat. no. 5368.0) with any changes kept to a minimum.

12.10 Conceptually, Australia's balance of payments is part of the Australian System of National Accounts (ASNA). The exports and imports series shown in the national accounts are identical to those in the balance of payments.

12.11 The ASNA is designed to provide a systematic summary of economic activity and has been developed to facilitate the practical application of economic theory. At their summary level, the accounts reflect key economic flows: production, income, consumption, investment and saving. At their more detailed level, they are designed to present a statistical picture of the structure of the economy and the detailed processes that make up the domestic production and its distribution. For many analysts, gross domestic product (GDP) is the key economic aggregate. GDP is based on the concept of value added which is the unduplicated value of goods and services produced in the Australian economy in any period.

12.12 In the national accounts, exports and imports are included in the expenditure based measure of GDP. This measure is derived as the sum of final consumption expenditure by government and households, plus investment in fixed capital formation and changes in inventories, plus exports minus imports (of both goods and services). See box 12.3 below.

12.13 The Australian national accounts are compiled according to the 2008 SNA. Australia's application of this standard is described in the Australian System of National Accounts: Concepts, Sources and Methods (cat. no. 5216.0).

12.14 Estimates of expenditure on machinery and equipment (a component of private gross fixed capital formation) is another component of GDP(E). For recent quarters these estimates are compiled mainly from data collected in the quarterly Survey of New Capital Expenditure and published in Private New Capital Expenditure and Expected Expenditure, Australia (cat. no. 5625.0).

12.15 Details of large value capital equipment imports reported in International Trade in Goods (cat. no. 5368.0) are used as a coverage check to ensure all large transactions have been included in the Survey of New Capital Expenditure. There is also regular communication between staff involved in compiling capital expenditure, balance of payments and international merchandise trade statistics to ensure coherent coverage and treatment of machinery and equipment and engineering construction projects.

12.16 Chain volume measures are estimates of growth (or the change in volume) after the direct effect of price changes have been eliminated. Chain volume measures are published, along with other measures of Australia's economy, in the quarterly Australian National Accounts: National Income, Expenditure and Product (cat. no. 5206.0) and Balance of Payments and International Investment Position, Australia (cat. no. 5302.0), and in the annual Australian System of National Accounts (cat. no. 5204.0).

12.17 Chain volume measures for approximately 70% of export commodities are obtained by quantity revaluation using quantity information recorded in the international merchandise trade statistics, on a quarterly basis. The remaining 30% are calculated by deflating current price values using export price indexes. The compilation of chain volume measures is described in detail in the ABS publication Spotlight on National Accounts, July 2011 (cat. no. 5202.0).

12.18 The chain volume measures of coverage and timing adjustments that are made to bring exports as recorded in the international merchandise trade statistics onto the required national accounts/balance of payments basis are derived using relevant implicit price deflators from the underlying quantity data, or the export price index or a combination of both.

12.19 Chain volume measures for import commodities are obtained by price deflation. Chain volume measures for merchandise trade (on a Balance of Payments basis) are also constructed in the Balance of Payments and International Investment Position, Australia (cat. no. 5302.0) publication using a similar methodology.

12.20 Input-output tables also use international merchandise trade statistics. These tables present a detailed picture of the supply and use of all products in the economy and the income generated from production. In simple terms imports are part of the supply of products to the Australian economy and exports are one of the ways that products are used (and so are included in the use table).

12.21 In the compilation of input-output tables, international merchandise trade data are reclassified to Input Output Product Classifications (IOPCs), which are then aggregated to the Input Output Product Groups (IOPGs). To be consistent with the rest of the national accounts the international merchandise trade data (by IOPC and IOPG) are then adjusted to a balance of payments basis.

12.22 Input-output tables are published annually in the Australian National Accounts: Input-Output Tables (cat. no. 5209.0.55.001). Further information about the tables can be found in that publication or for a detailed explanation see Chapter 22 of Australian System of National Accounts: Concepts, Sources and Methods (cat. no. 5216.0).

12.23 Australia's national accounts includes accounts for each of Australia's states and territories. Estimates of the components of state final demand (which includes exports and imports of goods) are published quarterly in the Australian National Accounts: National Income, Expenditure and Product (cat. no. 5206.0). A more complete set of accounts and estimates of gross state product are published annually in the publication Australian National Accounts: State Accounts (cat. no. 5220.0). The exports and imports data in these tables are largely sourced from international merchandise trade statistics.

12.24 Export and import price indexes measure price movements for a subset of Australian exports and imports. Selected international merchandise trade statistics are used to provide coverage checks for updating price samples with new commodities and contributors. The information is also used for annually re-weighting both indexes each September quarter.

12.25 In addition, price samples are supplemented with unit prices for selected homogeneous commodities, calculated directly from international merchandise trade data. Export and import price indexes are released quarterly, categorised by commodity and industry, in the ABS publication International Trade Price Indexes, Australia (cat. no. 6457.0).

12.26 International price pressures can have a significant impact on domestic prices, directly through exchange rates and imports, and indirectly through exports. There is considerable policy interest in import prices as a potential source of inflation and in the impact of export prices on national income. In disaggregated form, the export and import price indexes are used extensively in Australia's system of national accounts and balance of payments to deflate external trade values to provide indicators of the volume of international trade.

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