September trade in intangibles

Some good economic news this morning on trade. The BEA data shows the trade deficit declining by $2.3 billion in September to $41.5 billion from the revised August deficit of $43.8. August, revised. Economist had expected the deficit to grow to $45 billion. Exports were up by $5.6 billion while imports grew by only $3.4 billion. The growth of both exports and imports is a sign of an improving economy. Much of the overall improvement was due to a decline in the deficit in petroleum goods. Imports of petroleum goods was up slightly, but exports surged. Our non-petroleum goods trade deficit actually increased by a small amount.
Reversing the trend of the last couple of months, our surplus in intangibles increased in September by $892 million to $14.2 billion. Most of that improvement was due to a decline of $831 million in royalty payments (imports) which reflects the end of payments for the broadcast rights to the Summer Olympics. Royalty receipts (exports) were up slightly. As in previous months, the surplus in business services increased slightly as exports grew faster than imports.
Unfortunately, the deficit in Advanced Technology Products grew in September by $431 million. The biggest change was an increase in information & communications technology and aerospace imports. On the other side, biotechnology imports declined. 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.
Intangibles trade-Sept12.gif
Intangibles and goods-Sept12.gif
Oil good intangibles-Sept12.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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One thought on “September trade in intangibles”

  1. US trade decific in an energy self-sufficient scenario

    Yesterday, the International Energy Agency published their World Energy Outlook with this shocker as part of their main forecast: “the United States becomes a net exporter of natural gas by 2020 and is almost self-sufficient in energy, in net terms,…

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