International

As is customary each June, the estimates of U.S. international transactions are revised to incorporate new and updated source data and to introduce methodological changes.  Among the more substantive revisions this year were those to the investment income and the services accounts.  

For the first time, the Department of the Treasury released quarterly transactions data and yearend investment position data on financial derivatives. These data cover transactions and investment positions for 2006, and BEA will incorporate the data in its international economic accounts in its June 2007 annual revisions. The annual revision of the balance of payments transactions data will be released by BEA on June 15, and the 2006 U.S. international investment position will be released by BEA on June 28.

Although the term has been used to refer to a variety of transactions, "remittances" generally refers to money and goods sent from foreign-born individuals in a country to others abroad. BEA's estimate of such remittances, called "personal transfers," includes money and goods sent from the foreign-born population resident in the United States to others abroad. In 2007, U.S. personal transfers were $36 billion.

There are three main reasons why the U.S. direct investment position (or stock of U.S. direct investments) in a particular foreign country is usually much smaller than the assets of U.S. companies' foreign affiliates in that country: (1) Some of the assets of foreign affiliates may have been financed through sources other than U.S. direct investors, (2) the direct investment position is reported net of debt owed to the affiliates by their U.S. parent companies, and (3) some of the investments may have been made indirectly, through affiliates located in other countries.

The upcoming annual article on international services, to be published in the October 2008 Survey of Current Business, will feature two changes. First, table layouts will differ from those in previous articles; the new layouts are provided primarily for the convenience of users who wish to make advance preparations for the impending changes. The tables available through the link below contain no estimates, but they show the format in which the tables will be published, including line stubs and headers. The new tables will appear in the usual location on this web site.

BEA is including the allocations of SDRs in the International Transactions Accounts (ITAs); previously, such allocations had been excluded. Specifically, the allocations to the United States in the third quarter of 2009, totaling $47.6 billion, are included in the special drawing rights component of U.S. official reserve assets (line 43 of ITAs table 1). These allocations were a part of much larger allocations made by the IMF to participating member countries to help combat the global financial crisis. The offset to these transactions is included in “Other U.S.

Computer-related services, as well as many other types of services, may be provided to foreign markets via either of the two major channels of delivery—cross-border trade and services supplied through affiliates. In addition, some computer-related services may be embedded in goods that are exported to foreign markets, or they may be delivered in ways that result in entries in the U.S. international transactions accounts under income rather than under trade in goods and services.

The GAO study showed that U.S. imports from India of business, professional, and technical (BPT) services as published by BEA are substantially lower than India’s data on exports of BPT services to the U.S. (chart 1, left panel).1 However, when adjusted to a similar conceptual basis using information from the GAO report, the difference is actually quite small (chart 1, center panel).

BEA’s data on foreign direct investment in the United States (FDIUS) are classified by the country of the foreign owner. However, foreign multinational firms (MNCs) may own their U.S. affiliates through ownership chains that extend across multiple countries, so BEA has two ways of defining the owner:

Foreign residents' transactions in U.S. Treasury securities (lines 58 and 65 in table 1 of the ITAs) were revised up by $85.6 billion (13%) in 2010 and by $146.6 billion (55%) in 2011. These revisions accounted for close to 80% of the revisions to net financial inflows in those years.