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Foreign trade statistics: a basic market research tool.

Foreign trade statistics at the detailed product level play a fundamental role in any market research exercise, whether it is carried out by an individual export firm or a trade promotion organization. Although trade statistics are one of the basic tools for a market researcher, they are not always easy to use, as they are produced in many different forms, have varying coverage and require specific skills for interpretation. The rapid development of new computerized techniques and other means for storing and accessing trade statistics further complicates the choice of the most suitable source. Using such data effectively therefore requires an understanding of how the statistics are prepared, the information that they contain, the sources from which they are available and the forms in which they can be obtained.

How compiled

Trade statistics are a byproduct of customs procedures. They are prepared from customs declarations filled in by exporters and importers and verified by customs authorities. The customs department transfers the data to the statistics department, which sorts the information according to product, country and time period.

In many countries the ministry of trade has established a direct link to the customs. Trade officials therefore obtain the raw data at the same time as the statistics office. This has considerably reduced the time lag in the availability of the statistics. Furthermore, it has enabled the government to monitor trade at a more detailed ("disaggregated") level.

Standard format

The types of information covered by foreign trade statistics reflect the data collected through the customs forms. Many countries use a standard format for customs declarations, the UN Layout Key for Trade Documents. Standardization reduces the costs of processing the information and is essential for electronic data interchange (see article on page 10).

The following seven types of information are generally obtained from each customs declaration, which then are used to prepare the trade statistics broken down by product and country:

* Date of the transaction.

* Type of transaction (export or import).

* Commodity code.

* Country code.

* Value.

* Unit of measurement.

* Quantity.

When the customs department is computerized other types of data may also be available in the database with the primary foreign trade data:

* Local exporting or importing company and the person making the declaration.

* Foreign importer or exporter.

* Mode of transport.

* Gross and net weight of the goods.

* Number and kind of packages.

* Customs office.

* Currency of transaction.

* Customs regime.

* Terms of delivery and payment.

Many of these details can be useful for market researchers involved in their country's trade promotion activities. Although this additional information is not in general contained in the published versions of the national trade statistics, it can in some cases be obtained from the customs, statistics or trade departments.

Product nomenclatures

The more detailed the breakdown in product nomenclatures, the more useful the statistics are for market research. Detailed figures are especially important for analyzing changes in demand patterns and in average export and import values.

The tariff nomenclature most frequently used by governments to record their foreign trade transactions is the Harmonized Commodity Description and Coding System, or Harmonized System (HS), which has replaced the Brussels Tariff Nomenclature (BTN) and the Customs Cooperation Council Nomenclature (CCCN). The Harmonized System was developed by the Customs Cooperation Council (CCC) in Brussels in line with the requirements of customs procedures. To a large extent it classifies products by the materials used to produce them.

For economic analysis, however, the stage of processing of the products and their economic use are as important as the type of material that goes into them. This led to a parallel product nomenclature, developed by the UN, called the Standard International Trade Classification (SITC). The SITC categorizes products primarily by the degree of processing and the end-use.

In the HS, for instance, both wood charcoal and wooden statuettes are classified in the same general category, whereas under the SITC wood charcoal falls under one category and wooden statuettes under another.

While many national statistics departments present their trade figures according to a tariff-oriented nomenclature (CCCN or HS), international trade statistics produced by the UN and various other international institutions use the SITC.

Harmonized System:

Since 1988 more than 60 countries have adopted the Harmonized System. The HS is a numerical six-digit code. It has 21 sections (in Roman numerals), 97 two-digit chapters, 1,241 four-digit headings and 5,019 six-digit subheadings.

Most countries have added one or two more digits to the HS to highlight products of particular national interest. The European Community (EC), for instance, adds two digits to arrive at the eight-digit Combined Nomenclature for intra-Community trade (which may be modified from year to year). A ninth digit is added for national trade statistics, and imports from non-EC countries have to be reported in the EC's 11-digit Integrated Tariff (TARIC), of which only the first six digits are the standard HS codes. Because of its detailed breakdown, the Combined Nomeclature is particularly useful for market research.


For a broader analysis of exports and imports into a given country, SITC classifications are suitable. The SITC (Rev. 3) has ten sections, each subdivided into 67 two-digit divisions, 261 three-digit groups, 1,033 four-digit subgroups, and 3,118 five-digit basic headings. Because the SITC has significantly less categories than the HS, the HS can be converted into the SITC (from six-digit HS into five-digit SITC codes), but not vice versa.

Some institutions group the SITC categories into four types of products, namely:

* Food, live animals, beverages and tobacco (SITC sections 0 + 1).

* Nonfood primary commodities (SITC sections 2 + 4).

* Fuels (SITC section 3).

* Manufactures (SITC sections 5, 6, 7 and 8).

Alternatively, the first three groups can be classified into agricultural products (SITC sections 0, 1, 2 and 4 minus division 27) and mining products (SITC sections 3 and divisions 27, 28 and 68).

When trade statistics on industrial products are required, SITC sections 5 to 8 are sometimes further refined by subtracting iron and steel and nonferrous metals listed in SITC divisions 67 and 68.


For a general analysis of international trade trends, the commodity classification "Broad Economic Categories" (BEC), developed by the UN, is useful. Its three-digit numerical code classifies products into 19 different categories. The BEC basically distinguishes between food products, industrial supplies, fuels, capital goods, transport equipment and consumer goods. Tables exist for identifying the corresponding HS and SITC numbers. Trade statistics broken down according to the BEC are available in International Trade Statistics Yearbook, published by the UN Statistical Office.


Another classification system of interest to market researchers is the International Standard Industrial Classification (ISIC), also developed by the UN. It does not classify products but rather the principal economic activity of the producer. The ISIC, which is a numerical four-digit code, is of special relevance for preparing national accounts statistics and international input-output tables. For market researchers, trade statistics broken down by ISIC codes are particularly useful for analyzing the role of trade intermediaries -- for instance the wholesale sector -- and for examining the imports of a given sector. On the export side, there is obviously a close link between the economic activity of the direct exporter and the products. The Organization for Economic Cooperation and Development (OECD) provides trade statistics broken down according to the ISIC.

Quantity and value

Statistics on trade volumes (or quantities) rather than values are essential for analyzing broad trends in international trade. Value figures alone may sometimes distort real trade developments because of inflation and exchange rate variations. For market research on specific products, figures on the volume trade, in combination with average unit values, are often more reliable indicators than values alone. (Average unit values should not be confused with prices. They do not refer to one specific transaction, but rather to averages over a given period.)

Trade terms

In view of the significant costs of transport and insurance, the recorded value of exports depends to a considerable extent on whether these two elements are included.

In international trade statistics export value is usually given in "free on board" (FOB) terms, which implies that the exporter assumes all costs up to the point of shipment. This valuation is generally applied irrespective of whether the transaction was concluded under FOB or other terms. Imports are usually valued in "cost, insurance and freight" (CIF) terms, which includes the international transport and insurance costs.

The same transaction recorded by the exporter's and importer's statistics departments will therefore differ considerably because of the transport and insurance factors.


No trade statistics are perfect. Market researchers should be aware of this and take precautions accordingly. Mistakes in the statistics may occur through:

* Omissions, arising because of nonreporting. In some countries, the magnitude of unreported trade is similar to that of reported trade. In general, however, omissions are specific to given products. For example, the existence of traditional trade relations between countries with open borders may lead to unrecorded trade in some items (for instance cattle in West Africa).


* Erroneous classification of the goods, values or quantities.

* Discrepancies in the declarations of destination and origin by the exporter and the importer.

Compared with other economic data (such as statistics on production or savings), however, merchandise trade statistics tend to be more reliable, as they are the byproduct of customes controls of goods moving physically from one location to another, which have to pss through ports, airports and other border stations.

Checking statistics

Whenever possible, a market researcher should screen trade statistics for mistakes before using them. This can be done in two ways -- through common sense by looking at the plausibility and consistency of the figures, and by comparing the figures with other data.

For instance exports of tropical fruit from Norway are as unlikely to occur as are unit values below $100 for new automobiles. Common sense can be used in such cases to determine obvious mistakes in statistics.

Even more useful for verifying figures is the comparison of data from different sources. This may include detailed balance-of-payments statistics from central banks, information on export and import licenses, and production and trade data from industrial surveys. In general, however, such information is difficult to obtain.

Mirror statistics:

More readily available are "mirror" statistics, which can be useful for checking national export figures. These are import statistics that correspond to the export statistics of the partner country. For many countries that do not publish their own trade data, mirror statistics are the only trade figures available.

Discrepancies occur between national and mirror statistics for a number of different reasons. One is that while exports are usually recorded in terms of FOB prices, imports are generally given in CIF terms (as mentioned above). Different exchange rates also lead to differences in the final results. Furthermore, the definition and coverage of merchandise categories may differ from one country to another.

An approximate match, however, between export statistics and their mirror import statistics is a good sign of the reliability of the data. Because of the inclusion of freight and insurance costs, import figures should usually be somewhat higher than the corresponding export figures. Although freight and insurance costs obviously vary between products, one may assume an average difference of about 10% between import and export figures for comparable goods because of these two cost factors.

While mirror statistics are the most readily available source for assessing the reliability of trade data, a market researcher should not underestimate the time required to make a comparison


of this type. The sources have to be found, values have to be converted into a common currency and a correspondence has to be established between the commodity nomenclatures and coverages.

The exercise of comparing national export figures with mirror statistics can be facilitated with ITC's statistical tables referred to as "Profilimport." These tables present a given country's exports (over a five-year period and by SITC Rev. 2 four- or five-digit codes) on the basis of import data of approximately 30 major importing countries. The statistics become available with a time lag of about one year. Developing countries may request a Profilimport table of their own export performance free of charge. In other cases tables are prepared by ITC upon request for a fee of $50. (See "Analyzing Your Export Efforts" by Bernard Ancel, FORUM, October-December 1978, page 15.)


Numerous sources exist for foreign trade statistics. Those providing data by broad categories should be distinguished from those giving detailed product breakdowns.

Aggregated statistics:

For some market research applications, full product details are not necessary and time series on total exports and imports and trade by partner countries are sufficient. Cases in point are assessments of the importance of a particular target market or the development of intraregional trade.

"Aggregated" foreign trade statistics (i.e. statistics giving totals rather than specific breakdowns) with a wide geographical coverage can be obtained from international sources. They become available earlier than those giving product breakdowns.

For OECD countries, for instance, the series Monthly Statistics of Foreign Trade, "Series A," which is available in printed form and on diskette, provides data on most member countries with a delay of three to four months only. The monthly publication Direction of Trade Statistics of the International Monetary Fund (IMF) covers exports and imports of more than 130 countries broken down by partner countries. Both sources are useful for analyzing recent general trends in trade between selected countries. Also the "Stars" statistics of the World Bank, available on diskette for less than $100, are a useful source of general economic data and aggregated trade statistics.

Disaggregated statistics:

Product-level trade statistics (detailed, or "disaggregated," statistics) are available for individual countries or groups of countries. In the case of groups of countries, the number of separate sources required is fewer, and the comparison of trade data between countries is facilitated.

The major producers of detailed foreign trade data covering several countries are the UN Statistical Office (its Comtrade database); OECD ("Series C"); and Eurostat, the EC's statistical office (its "Comext" database). Each of these sources offers the trade data in various forms.

The following overview of sources for detailed trade statistics distinguishes between printed sources, microfiche series and machine-readable (i.e. on computer) sources. This may help users to obtain statistics that are adapted to their technical facilities and in line with their budgets.

Printed sources: National trade statistics in published form are useful for analyzing trade with important partner countries. Maintaining a documentation centre with published trade statistics from all countries is a time-consuming and expensive undertaking, however, which only a few major libraries, research centres and specialized international institutions can afford.

As an alternative, various international organizations publish trade statistics with a worldwide or regional coverage. Publications covering several countries facilitate comparisons, as they often convert all trade into the same currency, nomenclature, periodicity and so on. In addition, they frequently include more analytical tables than national trade statistics. However such publications become available later than national trade statistics and usually are less detailed.

ITC's forthcoming publication on which this article is based provides a comprehensive listing of national foreign trade statistics published by governments of over 150 countries and territories around the world. Information is provided on the title of the particular statistical publication, the organization producing and distributing the publication, the nomenclature used, frequency of issue, latest date of issue, whether the statistics are available in computer-readable form and the price.


Microfiche series: Statistics on microfiche have the advantage of being less bulky than printed publications. This has prompted various organizations to disseminate their trade data on microfiche. In contrast to information on diskettes and computer tapes, however, microfiche data cannot be easily transformed and processed. Reading and printing microfiche information requires special equipment and paper. Microfiche series are a substitute for publications rather than for computer-based systems.

The UN Statistical Office makes available a microfiche series of national trade statistics in SITC form, referred to as "Series D." In 1989, for instance, this series covered around 30 countries with a publication lag time of about one year. The annual subscription fee is $275.

OECD prepares microfiche sets of detailed annual trade statistics by commodity (SITC Rev. 3) and by trading partner for all OECD member countries. This information is referred to as "Series C." The 1989 figures were available early this year for $170.

Eurostat makes almost all of its trade statistics on the EC available on microfiche. Complete quarterly export and import figures broken down by HS subheadings are available on 130 microfiches. Eurostat microfiche data can be ordered in the Combined Nomenclature, HS, SITC and the EC's industrial classification formats, broken down in different degrees of detail. The time lag in publication varies between one and two years. The information is available in English, French and German. The price for the full quarterly commodity statistics presented according to the Combined Nomenclature is approximately $250 a year.

ITC issues an annual microfiche series called "Import Tabulation System" (ITS). It covers the imports of about 33 major markets over the most recent five years, with all products broken down to the SITC one-, four- and five-digit levels. In addition, it includes product rankings. Approximately 100,000 tables are available in the complete ITS microfiche series. An entire set costs $500 for developed countries and $250 for developing countries.

Computerized forms

Trade statistics available on computer, i.e. in "machine-readable" form, can be obtained as stored records such as diskettes, tapes and disks, or through direct search of databases that are continuously being updated at the source, through online electronic access.

Diskettes, optical disks and tapes:

National trade data can be obtained in computerized form from a number of countries. The cost is high, however, for market research that focuses on only selected products. A more cost-effective solution in this case may be more general collections of computerized trade data covering several countries.

OECD's "Series C" (commodity and country breakdown) is available on diskette for FF3, 700 (approximately $600) annually. The publication lag time is between 12 and 18 months.

Since April of this year the EC's monthly commodity trade figures are available on CD-ROM ("compact disk-read-only memory," i.e. disks on which large quantities of data are stored that can be easily retrieved). Publication lag time is only about six months for the 12 countries as a whole and even less for the major trading countries. Statistics are broken down to the eigt-digit Combined Nomenclature, which can be searched in English and French. The disk includes a programme for retrieving data and has a "download" (copying into another database) facility that makes it possible to transfer selected information into other formats. The price of an annual subscription is approximately $1,800, which includes 11 disks with monthly data plus one disk with aggregated annual figures. CD-ROMs are also available on U.S. trade statistics from the U.S. Bureau of the Census with yearly and monthly data ($150 each for import and export data, per year, available for 1989 and 1990).

ITC makes country-specific trade data compiled from statistics of partner trading countries available on diskette. These statistics, which are referred to as "Focus," have the same format as ITC's "Profilimport" tables. They provide a five-year series based on "Comtrade," use SITC Rev. 2, and include trade trends and import market shares.

Online databases:

Because of the large volume of trade statistics available, market research institutions often have difficulties in maintaining a complete database on world trade, as discussed above, even without considering the problems of up ating.

Some organizations have developed databases for trade statistics that can overcome this difficulty. These sources differ slightly in geographical, commodity and period coverage, as well as in access possibilities. They have opened up to external users through "hosts," i.e. central computer access organizations. (See ITC's publication "Selected On-line Data Bases for Trade Promotion Activities" for names and addresses of such "hosts.")

Comtrade: Comtrade is the UN's principal foreign trade database. Maintained by the UN Statistical Office in New York, it features values and quantities of exports and imports of approximately 150 countries by product (according to SITC Rev. 1, 2 and/or 3) and markets since 1962. Only about 40 of the reporting countries, however, provide the data within one year after the period covered.

Comtrade is accessible to international organizations through the New York Computer Service (NYCS) or the International Computing Centre (ICC) in Geneva, through special arrangements with the UN Statistical Office. It can also be accessed through the commercial "host" IP Sharp.

ITC works extensively with Comtrade data and develops a variety of special tables and tailormade printouts based upon it. Among the most frequently requested printouts are the "Profilimport" tables mentioned above.

Tradstat: "Tradstat" is one of the leading commercial databases for detailed trade statistics. (It can be accessed through the commercial host "Datastar.") It covers monthly and annual national export and import statistics by product and country for about 20 major markets. It offers approximately 24 standard table formats, including trade values, quantities, unit values and trends. One of its major advantages is that figures are given according to detailed tariff nomenclature breakdowns including full information on the item, rather than the more general SITC five-digit level.

Costs of using "Tradstat" are 30 pounds per hour (about $48) plus approximately 10 pounds ($16) to 20 pounds ($32) per table. Much practice is required to become a cost-efficient user of the database. (See ITC's document "Search Strategies to Selected Databases: Statistics and Prices" by B. Jocteur Monrozier.)

Eurostat: Eurostat maintains several trade databases on EC member countries, of which "Comext" is the most important for market research. "Comext" provides monthly, quarterly and annual trade statistics by product (HS, Combined Nomenclature and SITC) and by partner countries. Quartely figures according to SITC are also available on Japan and North America. All values are in European Currency Units (ECUs). "Comext" can be accessed through the commercial "host" Wefa. Access is, however, quite expensive.

SICE: A foreign trade database referred to as "Sice" (Servicio de Informacion al Comercio Exterior) was established by the Organization of American States (OAS) In Washington, D.C. in 1983. The database is unique in providing online information on U.S. exports and imports at the level of conventional commodity statistics as well as of individual exporters and importers and even bills of lading. "Sice" is one of the first cases in which enterprise-level trade figures have been available online to the general public in the OAS member states. The information includes both contact details (names and addresses of exporters and importers) and quantitative data (values and volumes by product, country and firm).

The cost of using "Sice" is comparatively low. The annual subscription fee is $500, plus a $0.67 charge per minute of use. There is no special fee for contact data obtained from the directories of importers and exporters. Only information from the maritime bill of lading database has to be paid for, on the basis of the number of items searched (approximately $0.10 per item).

Cost comparison

For the export department of a small or medium-size company, the best approach for obtaining trade statistics may be to use a public trade information centre, for example in the national trade promotion organization or the chamber of commerce. Specialized, private information brokers can also help locate the data required for a fee.

The optimal choice of sources of trade statistics for trade promotion organizations, chambers of commerce and export marketing departments depends on the particular interests of the clientele, the average number of requests received and the budget available.

In general, publications of national trade statistics issued by the major trading partner countries, along with regional and international trade statistics, are the most important elements of a trade statistics collection. These sources are usually available at a low cost and can be read and interpreted easily. Additional useful sources are the IMF's Direction of Trade Statistics, the UN's International Trade Statistics Yearbook and ITC's Profilimport tables. Regional trade statistics are also of interest. Examples are Eurostat's foreign trade data on the EC countries (discussed above) and foreign trade statistics of the UN Economic and Social Commission for Asia and the Pacific (ESCAP). These basic volumes can be financed with an annual budget as low as $500. The only equipment required is bookshelves. The amount of time needed by a trade information documentalist to maintain such a database is very limited.

Trade statistics on microfiche are only slightly more expensive. The equipment cost calculated over a five-year period is $300 annually. In addition the special paper required to print the results comes to about $0.05 a page. As mentioned above, the cost of microfiche trade data is between $250 and $500 per series annually. Total yearly costs for two microfiche trade data series can thus come to about $1,000. (The number of requests for this type of information should be at least 100 per year for the series to be worthwhile to an institution.)

For microfiche data, users usually require some assistance, and the time of a trade information specialist has to be made available for this purpose. In contrast, the maintenance of microfiche subscriptions is less time consuming than that for publications, as the series come from only one or two sources.

As discussed above, detailed trade statistics on diskette are available on a few countries only, such as members of the EC and the OECD. With annual subscription prices of approximately $600 for the OECD "Series C," diskettes represent an attractive option, in particular for processing and analyzing the data on a personal computer.

CD-ROMs are becoming more widely used, and Eurostat's introduction of monthly EC trade data on CD-ROM, referred to above, is an important step along this line. These disks will increasingly be an attractive alternative to microfiche, tapes and diskettes because of their large storage capacity and the possibility of "down-loading" the data selectively. The annual subscription cost is approximately $1,800, which makes CD-ROMs an interesting option for institutions with sufficient budgets.

Sourcing trade data from online databases is more expensive. The annual subscription fee for "Tradstat" amounts to at least $2,400 a year. Taking into account connection charges (30 pounds (or $48) per hour), an annual budget of at least $3,000 is required. Moreover, a trade information specialist has to be trained to use "Tradstat" efficiently. This alternative is therefore primarily of interest to institutions that have a considerable number of requests for trade statistics and a large budget. If these conditions exist, a source such as "Tradstat" offers certain advantages: figures are more recent than those from most other sources; "mirror" statistics can be prepared on countries that otherwise do not publish trade data; and the reliability of the information can easily be assessed by comparing both partners' trade figures for the same trade operation (provided that both report in the system). In view of these advantages, smaller trade information offices that cannot not afford direct access to "Tradstat" could consider using specialized information brokers to get access to this source on a case-by-case basis.

Friedrich von Kirchbach is an ITC economic research officer. This article is based on a forthcoming ITC publication that he wrote on applied analysis of foreign trade statistics.
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Title Annotation:includes related articles
Author:Kirchbach, Friedrich von
Publication:International Trade Forum
Article Type:Industry Overview
Date:Jul 1, 1991
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