Asymmetry analysis for trade in goods statistics between the UK and the USA, 2017 to 2022: annexes
Published 1 March 2024
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Annex A: Trade asymmetries
Trade asymmetries are differences in trade data between a country and its partner countries. Each country collects their own data on international trade in goods. In theory, each country’s exports to another should match the other country’s imports, and vice versa. For instance, UK imports from the USA should match USA exports to the UK. Figures often don’t match exactly. These differences are called trade asymmetries.
Asymmetries can happen due to discrepancies in methodology, valuation, and partner country assignment.
The Methodology notes for the Asymmetries in international trade in goods statistics: UK measured against EU and non-EU partner countries, 2019 to 2021 release give more details about asymmetries and how to measure them.
UK trade in goods statistics: Reasons for trade in goods asymmetries provides further explanation on the reasons for asymmetries.
Annex B: Trade data sources
When comparing published data from different countries, it’s important to remember that each country may have multiple data sources. It’s crucial to be aware of these differences and how they might affect comparisons.
There are various published data sources available for the UK and the USA.
Every country must collect and submit their trade data to the United Nations (UN) each month. The UN takes this data and uses an annual average exchange rate to convert it into USA Dollars. The data is published in the United Nations International Trade Statistics Database. This is also known as Comtrade.
The United Nations International Merchandise Trade Statistics Compilers manual guides countries on how to collect trade data.
For imports, countries should report the country of origin. If this is not available, they can use the country of dispatch. For exports they should report the country of last known destination. Annex E provides more information on definition of partner country.
Countries have some flexibility on how they interpret this guidance. This means the data submitted to Comtrade is not always collected in the same way. There may be different methods or definitions in use.
Countries’ individual trade statistics may also vary from the data they submit to Comtrade. For example, they may not include the latest revisions. There may also be further methodological differences.
The USA uses the IMTS recommended approach for their individual trade statistics, as well as the data they submit to Comtrade. This means that for imports, they always report the country of origin.
On the contrary, the UK has never included country of origin information in their individual trade statistics. Instead, they use country of dispatch information for imports. The UK’s individual trade statistics is called Overseas Trade Statistics (OTS). It forms part of the UK trade in goods statistics collection published by HMRC.
Overseas trade statistics: methodologies provides more details on the methods used in the OTS. Annex E Collection and methodology changes following the UK leaving the EU explains the effect of recent data collection changes. Annex A Product and Territorial Classifications explains partner country assignment.
However, the trade data submitted by the UK to Comtrade uses country of origin information for imports when available. This is in line with the IMTS guidance and the USA approach. Additional country of origin information outlines recent changes to country of origin information for UK imports.
It is also worth noting that HMRC publish bulk datasets separate from the OTS. From 2022, these contain country of dispatch and country of origin data for imports.
For exports, both the UK and the USA use the IMTS recommended approach for partner country assignment. This means that they always report the country of last known destination. This applies both to their individual trade statistics, as well as the data they submit to Comtrade. Annex E provides further information on definition of partner country.
Although, in some cases the final destination of a good is hard to determine. For example, where a good can be traded while in transit. This is noted in 1.2 of Annex A Product and Territorial Classifications.
Annex C: Asymmetry calculations
In this report the chosen asymmetry measure is a simple subtraction of USA exports from UK imports, and vice versa. Positive asymmetry means UK figures are higher. Negative asymmetry means UK figures are lower.
There is no particular reason for the choice to subtract USA figures from UK figures. We could equally have chosen to subtract UK figures from USA figures. This is a simple inverse relationship. So, whenever there is positive asymmetry for the UK there is negative asymmetry for the USA, and vice versa.
This measure differs from the ‘absolute asymmetry’ used in the Asymmetries in international trade in goods statistics: UK measured against EU and non-EU partner countries, 2019 to 2021 release. More detail about this alternative measure can be found in the accompanying Methodology notes. The ‘absolute asymmetry’ does not signal which country’s figures are higher. This was important for this study, thus a simpler measure was chosen.
Annex D: The focus on HS 87: Vehicles and HS 8703: Cars
Table 1: Average annual asymmetry for UK imports from the USA by chapter, 2017 to 2021
| Chapter | Value ($ million) |
|---|---|
| 88 | -4,866 |
| 99 | -2,394 |
| 97 | -1,968 |
| 87 | -1,478 |
| 30 | -736 |
Table 1 shows the average annual asymmetry for UK imports from the USA by chapter, from 2017 to 2021. Values represent millions of United States Dollars.
Source: Comtrade data, downloaded May 2023.
The chapters are sorted by value, in descending order. Only the top 5 are displayed.
During 2017 to 2021, UK imports from the USA of HS 87: Vehicles had an average annual asymmetry of -$1,478 million according to Comtrade. Only three chapters had a greater negative figure.
One of these was Chapter 99, which we do not expect to match across countries. This is because chapter 99 includes special types of trade, which vary by country. Harmonisation under the HS coding system is only expected for chapters 1 to 97.
Another of these was Chapter 88. We know that the USA suppress certain commodities in this chapter due to disclosure concerns. For example, high value aircraft data. This means we do not expect figures to match between the UK and the USA for this chapter.
So, disregarding chapters 88 and 99, chapter 87 is in second place for negative asymmetry over the period. The same figure for HS 8703: Cars, a subgroup of HS 87: Vehicles, was almost as large at -$1,419 million.
The other reason for the particular interest in these groups was that in 2022, their asymmetry became positive for the first time.
HS 87: Vehicles reported an asymmetry of $547 million in 2022, putting it into 6th place in terms of positive asymmetry. HS 8703: Cars, a subgroup of HS 87: Vehicles, led this change with a positive asymmetry of $345 million.
On the UK exports side, HS 87: Vehicles had an average annual asymmetry between 2017 and 2021 of just -$9 million. This is tiny compared to that for UK imports. HS 8703: Cars had a figure of -$73 million, which is still very small compared to UK imports.
These figures did increase to $522 million and $443 million, respectively, in 2022. However, since there was no large asymmetry prior to 2022, the change is not as drastic. Therefore, the focus of this study has been on UK imports, although UK exports figures for these groups are in UK exports vs USA imports for comparison.
Annex E: Definition of partner country
All concepts in this section are taken from International Merchandise Trade Statistics, Concepts and Definitions, 2010. This document accompanies the United Nations International Merchandise Trade Statistics Compilers manual. The manual is discussed in Annex B. Both documents are published by the UN.
Explanations of terms are written in plain English to aid understanding. Guidance on how to apply these definitions is also simplified. References to the original text are provided.
Imports
Country of origin
The country of origin of a good refers to the country where it first came from. It can also refer to the country where it was processed. It depends on how much the product has changed. For example, the country of origin for a can of tuna may be the country where the tuna was canned, rather than where it was farmed. The exact rules are determined by each country.
Adapted from section 6.6 of International Merchandise Trade Statistics, Concepts and Definitions, 2010.
The UN recommends country of origin be recorded for imports as a first choice of partner country. This is because country of origin data provides better insights for trade policy and economic analysis.
Adapted from section 6.25 in International Merchandise Trade Statistics, Concepts and Definitions, 2010.
Country of dispatch
Country of dispatch is also known as country of consignment. It means the last country where a good was legally owned on its journey to the importing country. It does not matter if a good is transported through another country at a later date. The country of dispatch doesn’t change unless the ownership changes.
Adapted from section 6.4 in International Merchandise Trade Statistics, Concepts and Definitions, 2010.
The UN considers country of dispatch to be the second choice of partner country assignment for imports. Still, the UN recommends that it is collected alongside country of origin data. This is because some countries only collect country of dispatch data. If a country provides both, this will allow comparison with all other countries.
Adapted from section 6.26 in International Merchandise Trade Statistics, Concepts and Definitions, 2010.
Exports
Country of last known destination
The country of last known destination is recorded by the exporting country. It refers to the last country to which a good is expected to be delivered, as far as it is known at the time of exportation. It does not matter if it becomes legally owned by another country during transport. Only the country of final destination should be recorded.
Adapted from Section 6.13 in International Merchandise Trade Statistics, Concepts and Definitions, 2010.
The UN recommends that country of last known destination be recorded for exports.
Adapted from section 6.25 in International Merchandise Trade Statistics, Concepts and Definitions, 2010.
Country of dispatch
Country of dispatch is also known as country of consignment. In the case of exports, it means the first country where a good is expected to be dispatched, as far as it is known at the time of exportation. If a good is expected to travel through another country beforehand, the country of dispatch doesn’t change unless the legal status of the goods is also expected to change.
Adapted from section 6.11 in International Merchandise Trade Statistics, Concepts and Definitions, 2010.
The UN encourages country of dispatch to be recorded for exports in addition to country of last known destination. But, they recognise this may be difficult for some countries.
Adapted from section 6.26 in International Merchandise Trade Statistics, Concepts and Definitions, 2010.