December trade in intangibles – and 2011

The not so good news on trade continued in December, according to data released today by BEA. The deficit once again rose to $48.8 billion, up $1.7 billion from the November revised deficit of $47.1 billion. Imports were up by $3 billion while exports rose by only $1.2 billion. Unlike last month, the increased deficit was all non-petroleum goods, as the December petroleum goods deficit actual shrunk slightly. Some of the biggest contributors to the deficit were imports of capital goods and autos & auto parts.
Conversely, our deficit in Advanced Technology Products improve markedly in December, dropping by over $2.7 billion. Much of this was due to a drop in information and communications technology imports. The last monthly surplus in Advanced Technology Products was in June 2002 and the last sustained series of monthly surpluses were in the first half of 2001.
Our trade surplus in intangibles grew ever so slightly in December. This was due to a growth in the balance of trade in royalties — where exports (incoming payments) grew faster than imports (outgoing payments). The surplus in business services decreased slightly as imports grew faster than exports.
On an annual basis, our intangibles trade was basically unchanged in 2011 after a spurt in 2010. Our intangible surplus remains small compared with the increasing trade deficits in goods.
Intangibles trade-Dec11.gif
Intangibles and goods-Dec11.gif
Oil good intangibles-Dec11.gif
Intangibles trade-2011.gif
Annual - intangibles v goods 2011.gif

Note: we define trade in intangibles as the sum of “royalties and license fees” and “other private services”. The BEA/Census Bureau definitions of those categories are as follows:

Royalties and License Fees – Transactions with foreign residents involving intangible assets and proprietary rights, such as the use of patents, techniques, processes, formulas, designs, know-how, trademarks, copyrights, franchises, and manufacturing rights. The term “royalties” generally refers to payments for the utilization of copyrights or trademarks, and the term “license fees” generally refers to payments for the use of patents or industrial processes.

Other Private Services – Transactions with affiliated foreigners, for which no identification by type is available, and of transactions with unaffiliated foreigners. (The term “affiliated” refers to a direct investment relationship, which exists when a U.S. person has ownership or control, directly or indirectly, of 10 percent or more of a foreign business enterprise’s voting securities or the equivalent, or when a foreign person has a similar interest in a U.S. enterprise.) Transactions with unaffiliated foreigners consist of education services; financial services (includes commissions and other transactions fees associated with the purchase and sale of securities and noninterest income of banks, and excludes investment income); insurance services; telecommunications services (includes transmission services and value-added services); and business, professional, and technical services. Included in the last group are advertising services; computer and data processing services; database and other information services; research, development, and testing services; management, consulting, and public relations services; legal services; construction, engineering, architectural, and mining services; industrial engineering services; installation, maintenance, and repair of equipment; and other services, including medical services and film and tape rentals.


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