Document I/7 — Challenges for national accounts and balance of payments statistics: Goods sent abroad for processing

One item in the present round of SNA 1 revision concerns the recording of processing, or manufacturing of goods on contract or fee basis. Two requirements may be highlighted; one is the need for a consistent system for cross border transactions and financial flows, and the other is a relevant description of the economic activities conducted within the national boundaries. The conclusion drawn in the UN Statistical Commission [1] changes the prevailing recommendation of gross recording of processing, based on the fact that processing implies that no change of ownership of either raw materials or finished goods takes place. This note argues that the change in principles makes the Supply and Use Tables of the SNA less suitable as a basis for analyses of production, productivity and environmental issues related to production, and advocates the introduction of a new satellite accounts system specially designed for such analytical purposes.