united states statistics on exports and imports

United States Statistics on Exports and Imports

William S. Lofquist

Collection and reporting of U.S. import and export data have been continuously refined to better serve the publishing industry and to be compatible with the efforts of other nations. Despite these efforts, limitations remain on the ways in which international statistics can be used. These limitations arise from problems of categorization, exemption of low-valued shipments from reporting requirements, the difficulties of dealing with transshipments, and the inadequacy of reporting on translations and sales of foreign rights.

G overnments have a keen interest in foreign t rade statistics. Such statistics are not only a measure of a country 's progress, but also the basis for the

accumula t ion of revenues. For the wor ld ' s less deve loped countries, tariffs on impor t s - - a s de te rmined by impor t s ta t is t ics--represent a principal source of g o v e r n m e n t income. Taxes on exports pe r form the same function. In its early years, the Uni ted States readily subscribed to this revenue p roduc t ion view of its trade data.

As a revenue source, the wor ld ' s trade in pr in ted products is tradit ionally subject to severe limitations. Its vo lume is small: for the Uni ted States, well u n d e r one-half of one percent of total U.S. trade. This relative percentage holds for m a n y other countries, imply ing that revenues are more easily raised by seeking out other commodit ies . It is as a source of a country ' s p rog re s s - - economic and cul tura l - - tha t statistics on trade in pr in ted materials (in this report, books) have undeniable merit.

Background

The earliest years of U.S. t rade data show just a single ca tegory- - t i t l ed "pr in ted m a t t e r ' - - f o r exports and impor ts of newspapers , books, periodicals, and the g rowing array of products from commercia l printers: labels, decals, t rade adver t is ing material, calendars, p laying cards, etc. It was not long before g rowth of U.S. t rade with other countr ies required a more detai led account ing of these items, especially for impor t purposes .

The vast size of the U.S. marke t for p r in ted products deve loped a pr in t ing and publ i sh ing indus t ry far more sensitive to domest ic rather than interna-

William S. Lofquist is the Printing/Publishing Industries Specialist in the Office of Consumer Goods of the U.S. Department of Commerce. Address for correspondence: U.S. Department of Commerce, International Trade Administration, Room 4312, Washington, D.C. 20230.

Lofquist 25

tionaI sales. With U.S. book exports, for example, representing little more than 2 to 3 percent of total U.S. book shipments, the U.S. book publishing industry had little incentive to fine-tune U.S. export categories for marketing purposes. Although U.S. export categories, then as now, have been relatively easy to change, the U.S. book industry showed little interest in determining what types of books found overseas markets. Thus, as late as 1947 the United States showed only three categories of book exports: (1) textbooks, (2) books, not textbooks, and (3) books, unbound in sheets.

The classification of U.S. book imports was quite another matter. Until the 1950s, many of the largest U.S. book publishing companies owned their own manufacturing facilities. U.S. publishers, at least those with a printing orienta- tion, tended to view book imports from somewhat the same perspective as their printing suppliers: U.S. book imports were competitive products. As such, they should be restricted and duties levied. Tariffs of 5 percent ad valorem on U.S. book imports ended in February 1966, shortly after the United States became signatory to the Florence Agreement.

U.S. book imports had yet another dimension: their classification was deter- mined by the economics of copyright. The Chace Act of 1891 gave U.S. copyright protection to the works of foreign authors, but exacted a price from U.S. authors: an embargo was placed on U.S. imports of books authored by U.S. citizens but printed abroad (the so-called manufacturing clause). Thus, between 1891 and 1986--when the manufacturing clause expired--the classifications of U.S. book imports was subject to legislative permutations of the Chace Act. Book import categories for 1986, for example, were limited to five classifications: (1) bibles and hymnals, (2) books in a language other than English, (3) books authored by a U.S. national or domiciliary, (4) children's picture and toy books, and (5) all other books.

The Harmonized System

By the 1970s, rapid expansion of the world's trade in commodities and mer- chandise demanded a more coherent system of data tracking. The international organization responsible for this activity was the Customs Cooperation Council (CCC), consisting of virtually all countries involved in foreign trade. The U.S. representative to the CCC is the U.S. International Trade Commission (known until the mid-1970s as the U.S. Tariff Commission). The goal was to standardize the classification of trade data such that (1) statistics on a country's exports could be better aligned with statistics on its imports, and (2) one country's export/import data could have a commonality to (or be in harmony with) another country's export/import data. Thus was born the Harmonized System (HS), adopted by most countries in 1988 and by the United States in 1989.

Under the harmonized system, statistics on U.S. exports of books became categorized as follows:

26 Publishing Research Quarterly / Fall 1992

U.S. Book Export Classifications

HSNumber

4901910020 49O191004O 4901990010 4901990040 4901990050 4901990055 4901990070 4901990075 4901990093

4903000000 4904000040

4905910000

Description

Dictionaries (including thesauruses) Encyclopedias Textbooks Bibles, testaments, prayer books, and other religious books Technical, scientific, and professional books Art and pictorial books Hardbound books Rack-size paperbound books Other books, containing 49 or more pages each (excluding covers) Children's picture, drawing, or coloring books Music, printed or in manuscript, whether or not bound or illustrated Maps and hydrographic or similar charts of all kinds, including atlases, wall maps, topographic plans and globes, printed: in book form

Care was taken to see that U.S. book import categories were closely aligned to the export categories. Thus, statistics on U.S. book imports were classified as follows:

U.S. Book Import Classifications

HSNumber

4901910020 4901910040 4901990010 4901990040 4901990050 4901990060 4901990065 4901990070 4901990075 4901990091

4903000000 4904000040

4905910000

Description

Dictionaries (including thesauruses) Encyclopedias Textbooks Bibles, testaments, prayer books, and other religious books Technical, scientific, and professional books Art and pictorial books, valued under $5 each Art and pictorial books, valued $5 or more each Hardbound books Rack-size paperbound books Other books, containing 49 or more pages each (excluding covers) Children's picture, drawing, or coloring books Music, printed or in manuscript, whether or not bound or illustrated Maps and hydrographic or similar charts of all kinds, including atlases, wall maps, topographic plans and globes, printed: in book form

Lofquist 27

These new HS categories were formed in the mid-1980s by an interagency group led by the U.S. International Trade Commission and the Bureau of the Census. Chairman of the group was Eugene A. Rosengarden, director of the Office of Trade Affairs and Trade Agreements, U.S. International Trade Com- mission. The U.S. book categories shown above resulted from consultations with executives of the U.S. printing and publishing industry, and various federal government officials.

The following information on U.S. trade in books is collected each month under these HS categories:

1. Country of origin or destination

2. Aggregate dollar value of the shipment

3. Aggregate number of books shipped or received

4. U.S. Customs district of entry or exportation

5. Method of transportation (air, water)

However, mere collection of this information should not presume availability. The U.S. Bureau of the Census makes available selected data on dollar value shipments and units in monthly publications, but information on Customs district or methods of transportation are available only by computer runs, compact disks, or magnetic tapes.

Although the new HS statistical operation provides far better data on the book trade, a statistical glitch appeared when the HS was combined with the FTA. The U.S.-Canada Free Trade Agreement (FTA) became effective January 1, 1989. Among its provisions was the goal of improving data collection on trade between the two countries. To accomplish this, Canadian import data would be used as a proxy for U.S. exports: i.e., most U.S. exporters would no longer be required to fill out U.S. detailed export declarations; their exports to Canada would be picked up as Canadian imports, with the government of Canada sending copies of their import data to the government of the United States in order to show U.S. "exports." In turn, the United States would supply Canada with U.S. import data, which would be used by Canada as a proxy for their exports to the United States.

This use of trade proxies would work to maximum advantage only if both countries had identical trade categories. As regards books, it is clear that they do not. Both countries have equal categories for total book exports/imports, but each country has differing views as to what individual book categories should exist. This category inconsistency was resolved in 1991, when Canada and the United States agreed to collect book data consistent with each other's individual book categories. Trade data for 1992 and the years beyond will thus be consistent with data for 1991.


Data Limitations

International trade statistics are used in a variety of ways, depending on the observer and audience: government economists view such data as essential to the formulation of economic policy; a company's sales managers view the data as necessary for the allocation of marketing resources. In any case, it is impor- tant to note possible limitations on the ways in which international statistics are employed.

Identifiable Categories. The U.S. interagency group responsible for setting up international trade categories for U.S. books took their lead from the then existing domestic classifications. Over the years, predecessors of the Association of American Publishers, Inc. (AAP)--a trade organization representing 70-80 percent of U.S. book publishing revenues--had established book categories reflecting the marketing needs of their members: textbooks, religious books, trade books, etc. In turn, the U.S. Department of Commerce's Bureau of the Census generally followed the AAP's book classification system in collecting federal government data on U.S. book shipments.

But the interagency group found that certain domestic book categories did not easily lend themselves to the international HS system. A guiding principle in establishing international trade categories is that the world's customs au- thorities be able to readily identify goods in trade. Thus, customs agents are able to open a shipment of textbooks, religious books, rack-sized paperbound books, encyclopedias, and technical, scientific, and professional books and- - by examining these books--generally determine to which book category the shipment belongs. But this identification process cannot easily be applied to shipments of adult and juvenile trade books, university press books, book club books, and mail order publications, for example. Because these books are more representative of a book's channel of distribution and less representative of identifiable book markets, customs agents are able to classify such books only by their physical characteristics--hardbound, paperbound, etc.--and not by their contents.

Two additional limitations are placed on U.S. trade data: disclosure and minutiae. The U.S. government makes every effort not to report trade transactions that would disclose company information with regard to individual shipments. Thus, trade categories might be aggregated in order to prevent disclosure of a company's shipments. Second, the U.S. government places minimum dollar value requirements on the establishment of trade categories. This value is generally in the range of several million dollars in annual trade. This prevents the establishment of a plethora of trade categories of relatively insignificant dollar value.

Paperwork Burden on Exporters. In order to reduce the substantial quantities of paper documentation generated by international trade, the U.S. government exempts the filing of shippers' export declarations or formal import entry documents if the value of the individual shipments are under $2,500 (exports)

Lofquist 29

TABLE 1 Exemption Levels for Low-Valued Shipments

U.S. Exports

Prior to September 30, 1969 $ 100

October 1, 1969 250

March 1, 1969 500

June 1, 1985 1,000

January 1, 1987 1,500

October 1, 1989 2,500

U.S. Imports Prior to June 30, 1965 $ 100

July 1, 1965 250

January 1, 1985 1,000

October 1, 1989 1,250

or $1,250 (imports). Table 1 shows the progressive raising of these exemption values since 1965.

By permit t ing U.S. trade in low-valued shipments to move wi thout formal statistical documentat ion, the government assists industry by reducing paperwork requirements. But in the process it fails to capture data on these move- ments, thus understat ing the amount of trade in such shipments. In order to assure itself that few data are lost through this exemption process, the government samples low-value shipments to determine h o w significantly the trade data are understated. Recent samplings indicate that total low-value shipments of all goods represent less than 2.5 percent of total U.S. exports and less than 5 percent of total U.S. imports.

However , no government studies have been done to indicate the estimated value of low-valued shipments for an individual commodi ty (such as books). The fact that books are rarely dutiable, are generally low in price, and can be easily sourced has given rise to the opinion that U.S. government statistics significantly understate their volume in international trade. Estimates of this unders ta tement range from 5 percent to 50 percent, or even higher.

Transshipments. A principal weakness in the use of trade statistics for marketing purposes results from the possibility of transshipments. In numerous in- stances, the country of destination shown in the government ' s trade data is not the ultimate destination of the product shipped. This problem is most effectively described by the following example: At a 1970s White House briefing for U.S. book publishers, an assistant secretary of commerce--f i rs t briefed by incompetent staff--told the assembled publishers that al though the USSR appeared to be an attractive market for their products, the trade data showed that U.S. shipments of books to the USSR for the most recent year came to just $25,000.


A U.S. publisher in the audience rose and informed the secretary that the expenses incurred on his most recent trip to the USSR came to approximately $25,000. He went on to describe U.S. book sales to the USSR as most assuredly over $1 million per annum. Taken aback, the secretary was further informed that--at that time--U.S, books reached the USSR after having first been shipped to either the United Kingdom, the Netherlands, or [West] Germany. It was these entry points that were being recorded in the U.S. trade data as the "country of destination" for U.S. book exports, not the "ultimate" destination of the USSR. Later that day, incompetent staff was appropriately "briefed."

Transshipments present a formidable obstacle to trade analysts in pinpointing export markets. Indonesia, for example, may represent an attractive market for U.S. books. But if most U.S. book exports to Indonesia are first shipped to warehouses in Singapore and thence transshipped to Indonesia, this second transaction goes unrecorded--except in the export data compiled by the government of Singapore. Even access to Singapore's trade data on book exports might prove inconclusive. Assuming that Singapore's domestic book publishing industry is an unenthusiastic exporter, it might be difficult to prove that Singapore's book exports were evenly or unevenly divided between books of U.S. or U.K. origin. Access to the foreign trade data on books compiled by the United Nations could shed some light on the origins of Indonesia's book imports, but inconclusiveness would still be prevalent. In fact, it could be argued that reading Singapore's tea leaves would be considerably easier than determining the U.S. content of books exported from the United Kingdom, the Netherlands, and Germany.

Foreign Rights and Translations. Although no statistics are available on U.S. trade in book royalties, it would be a mistake not to discuss briefly the rapid rise in this primarily export activity. Until recent years, foreign royalty payments to U.S. publishers from the sale of rights was minuscule. If U.S. book exports in 1970 were $170 million, sales of rights may have been $17 million: a ratio of ten to one. Two decades later, this ratio is probably closer to four to one: U.S. book exports in 1990 were $1.4 billion and estimated foreign royalty payments between $300 and $400 million.

The Bureau of Economic Analysis (BEA), an agency of the U.S. Department of Commerce, collects information each year on foreign royalty payments to U.S. industry from the sale of patents, trademarks, and copyrights. The BEA's annual data are available only in aggregate. For example, foreign royalties from the sale of U.S. copyrights are not allocated among books, records, and movies.

But as foreign royalty payments become a larger part of the international trade pie, demand will build for their breakout. The terms "exports" and "imports" will broaden from their historical commodity connotations to embrace financial transactions as well.

Lofquist 31

Summary

The United States has come a long way from its early days of collecting trade statistics on books. Trade categories are fine-tuned consistent with the changing needs of the U.S. book industry. An interagency committee is in place, chaired by Eugene Rosengarden, to respond to these needs.

Since 1965 U.S. book imports incur no U.S. tariffs. Therefore, changes in U.S. book import classifications can be more easily accomplished. Changes in the export data must meet identification, disclosure, and minutiae considerations, but are frequently adjusted in line with the U.S. book industry 's requirements.

Statistics, especially on cultural items, are in no way boring. They reflect a country 's progress. U.S. trade data on books indicate the competitive factors of the world 's knowledge industry. The United States remains among the leaders in this industry: our statistics prove it.

united states statistics on exports and imports

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