Reconciliation of the U.S.-Canadian Current Account, 1997 and 1998.

DiLullo, Anthony ; Henderson, Hugh

ON THE reconciled basis, the U.S.-Canadian current-account balance shows a U.S. deficit, or Canadian surplus, for 1997; in contrast, the balance shows a U.S. surplus on the U.S.-published basis. For 1998, the reconciled balance shows a larger U.S. deficit than the U.S.-published deficit. Compared with the Canadian-published estimates, however, the reconciled current-account balance shows a smaller Canadian surplus, or U.S. deficit, for both 1997 and 1998. The U.S.-published current-account balance with Canada is a U.S. surplus of $1.1 billion for 1997 and a U.S. deficit of $4.3 billion for 1998.(1) The corresponding Canadian-published balance is a Canadian surplus (U.S. deficit) of $3.6 billion for 1997 and a Canadian surplus of $8.4 billion for 1998. On the reconciled basis, the U.S. deficit, or Canadian surplus, is $2.7 billion for 1997 and $8.2 billion for 1998 (chart 1, table 1).(2)

[Chart 1 OMITTED]

Table 1.--Major U.S.-Canadian Balances

[Billions of U.S. dollars]

 Published Reconciled
 estimates estimates

 United Canada United Canada
 States States

 1997

 Goods and services -11.1 16.6 -17.8 17.8
 Goods -18.0 22.4 -24.2 24.2
 Services 6.8 -5.8 6.4 -6.4

 Income 12.8 -14.6 15.6 -15.1

 Current unilateral -0.5 1.6 -0.4 0.4
 transfers

Current account 1.1 3.6 -2.7 2.7

 1998

 Goods and services -14.6 20.8 -21.5 21.5
 Goods -19.0 24.2 -25.3 25.3
 Services 4.4 -3.4 3.8 -3.8

 Income 11.0 -13.9 13.8 -13.8

 Current unilateral -0.6 1.5 -0.5 0.5
 transfers

Current account -4.3 8.4 -8.2 8.2

NOTE.--A U.S. surplus (+) is a Canadian deficit (-), and a Canadian surplus (+) is a U.S. deficit (-).

Details may not add to totals because of rounding.

This article presents the results of the reconciliation of the bilateral current-account estimates of Canada and the United States for 1997 and 1998.(3) The details of the current-account reconciliation for 1997 and 1998 are presented in the tables that follow this article. Tables 2.1 and 2.2 show the major types of reconciliation adjustments--definitional, methodological, and statistical--that were made to the major current-account components. Tables 3.1 and 3.2 present the published estimates, the reconciled estimates, and the amounts of the adjustments for each major component. Tables 4-8 present the reconciliation details for each current-account component.(4)

Table 2.1.--Summary of Reconciliation Adjustment, Northbound

[Millions of U.S. dollars]

 Definitional Methodological

 Reclassification
 United
 States Canada United
 States Canada

 1997

Goods ... -310 138 ...

Services ... -138 -138 -67

 Transfers under U.S. ... ... ... ...
 military agency sales
 contracts

 Travel ... ... 589 ...

 Passenger fares ... ... ... ...

 Other transportation ... ... ... 180

Other services ... -112 -727 -247
 Affiliated ... -46 -219 ...
 Unaffiliated ... -66 -508 -247
 Government ... ... ... ...

Income ... -1,273 ... 67
 Direct investment ... -389 ... 66
 Other investment ... -884 ... 66
 Compensation of employees ... ... ... 67

Current unilateral transfers ... -232 ... ...

 Total adjustments 1,927 ... ...

 1998
Goods ... 58 114 ...

Services ... -155 -144 -66

 Transfers under U.S. ... ... ... ...
 military agency sales
 contracts

 Travel ... ... 607 ...

 Passenger fares ... ... ... ...

Other transportation ... ... ... 176

Other services ... -155 -751 -242
 Affiliated ... -66 -188 ...
 Unaffiliated ... -89 -563 -242
 Government ... ... ... ...

Income ... -1,016 ... 66
 Direct investment ... -381 ... -92
 Other investment ... -635 ... 92
 Compensation of employees ... ... ... 66

Current unilateral transfers ... -208 ... ...

 Total adjustments ... -1,321 ... ...

 Methodological Statistical

 Gross or net
 United
 United States Canada
 States Canada

 1997

Goods ... ... 27 -176

Services ... ... 1,132 -86

 Transfers under U.S. ... ... ... 91
 military agency sales
 contracts

 Travel ... ... 28 31

 Passenger fares ... ... -123 ...

 Other transportation ... ... 2 -83

Other services ... ... 1,225 -125
 Affiliated ... ... 203 -925
 Unaffiliated ... ... 1,003 788
 Government ... ... 19 12

Income -864 -2,517 3,342 2,012
 Direct investment ... -120 192 2,219
 Other investment -864 -2,397 3,150 -218
 Compensation of employees ... ... ... 11

Current unilateral transfers 167 ... 114 ...

 Total adjustments -697 -2,517 4,615 1,750

 1998
Goods ... ... -4 -639

Services ... ... 779 -182

 Transfers under U.S. ... ... ... 106
 military agency sales
 contracts

 Travel ... ... -90 20

 Passenger fares ... ... -203 ...

Other transportation ... ... 18 -50

Other services ... ... 1,054 -258
 Affiliated ... ... 144 -1,678
 Unaffiliated ... ... 893 1,409
 Government ... ... 17 11

Income -1,196 -2,826 3,177 927
 Direct investment ... -122 85 1,099
 Other investment -1,196 -2,704 3,092 -184
 Compensation of employees ... ... ... 12

Current unilateral transfers 167 ... 110 ...

 Total adjustments -1,029 -2,826 4,062 106

 Total

 United
 States Canada

 1997

Goods 165 -486

Services 996 -263

 Transfers under U.S. ... 91
 military agency sales
 contracts

 Travel 617 31

 Passenger fares -123 ...

 Other transportation 2 97

Other services 500 -482
 Affiliated -16 -971
 Unaffiliated 495 475
 Government 19 12

Income 2,478 -1,711
 Direct investment 192 1,644
 Other investment 2,286 -3,433
 Compensation of employees 78

Current unilateral transfers 281 -232

 Total adjustments 3,918 -2,692

 1998
Goods 140 -581

Services 633 -403

 Transfers under U.S. ... 106
 military agency sales
 contracts

 Travel 517 20

 Passenger fares -203 0

Other transportation 18 127

Other services 301 -656
 Affiliated -44 -1,744
 Unaffiliated 330 1,078
 Government 17 11

Income 1,981 -2,849
 Direct investment 85 504
 Other investment 1,896 -3,431
 Compensation of employees ... 78

Current unilateral transfers 277 -208

 Total adjustments 3,031 -4,041
Table 2.2.--Summary of Reconciliation Adjustments, Southbound

[Millions of U.S. dollars]

 Definitional Methodological

 Reclassification
 United
 Canada States United Canada
 States
 1997
Goods 1,306 5,111 31 ...

Services -138 ... -197 ...

 Direct defense ... ... ... ...
 expenditures

 Travel ... ... ... 19

 Passenger fares ... ... ... ...

 Other transportation -78 ... 100 -226

 Other services -60 ... -297 207
 Affiliated -3 ... -4 -26
 Unaffiliated -57 ... -293 233
 Government ... ... ... ...

Income -456 ... 166 ...
 Direct investment -364 ... ... ...
 Other investment -92 ... ... ...
 Compensation of employee ... ... 166 ...

 Current unilateral -1,428 ... ... ...
 transfers

 Total adjustments -716 5,111 ... ...

 1998

Goods -280 5,008 27 ...

Services -144 ... -190 ...

 Direct defense ... ... ... ...
 expenditures

 Travel ... ... ... 19

 Passenger fares ... ... ... ...

 Other transportation -76 ... 98 -233

 Other services -68 ... -288 214
 Affiliated -11 ... -4 -26
 Unaffiliated -57 ... -284 240
 Government ... ... ... ...

 Income -125 ... 163 ...
 Direct investment -33 ... ... ...
 Other investment -92 ... ... ...
 Compensation of ... ... 163 ...
 employees

Current unilateral -1,184 ... ... ...
 transfers

 Total adjustments -1,733 5,008 ... ...

 Methodological Statistical

 Gross or net
 United
 United Canada States Canada
 States
 1997
Goods ... ... -10 1,310

Services ... ... -462 1,465

 Direct defense ... ... 57 ...
 expenditures

 Travel ... ... ... 71

 Passenger fares ... ... ... ...

 Other transportation ... ... 56 13

 Other services ... ... -575 1,381
 Affiliated ... ... -560 108
 Unaffiliated ... ... -15 1,260
 Government ... ... ... 13

Income -2,517 -864 43 476
 Direct investment -120 ... -358 32
 Other investment -2,397 -864 271 444
 Compensation of employee ... ... 130 ...

 Current unilateral ... 167 -2 ...
 transfers

 Total adjustments -2,517 -697 -431 3,251

 1998

Goods ... ... 769 1,414

Services ... ... -489 1,198

 Direct defense ... 68 ... 68
 expenditures

 Travel ... ... ... 68

 Passenger fares ... ... ... 5

 Other transportation ... ... 58 55

 Other services ... ... -615 1,074
 Affiliated ... ... -591 100
 Unaffiliated ... ... -24 961
 Government ... ... ... 13

 Income -2,826 -1,190 81 369
 Direct investment -122 ... -465 377
 Other investment -2,704 -1,190 407 -8
 Compensation of ... ... 139 ...
 employees

Current unilateral ... 167 -7 ...
 transfers

 Total adjustments -2,826 -1,023 354 2,981

 Total

 United
 States Canada

 1997
Goods 1,327 6,422

Services -798 1,465

 Direct defense 57 ...
 expenditures

 Travel ... 90

 Passenger fares ... ...

 Other transportation 78 -212

 Other services -933 1,587
 Affiliated -567 82
 Unaffiliated -365 1,493
 Government ... 13

Income -2,764 -388
 Direct investment -842 32
 Other investment -2,218 -420
 Compensation of employee 296 ...

 Current unilateral -1,430 167
 transfers

 Total adjustments -3,665 7,668

 1998

Goods 516 6,422

Services -827 1,200

 Direct defense ... ...
 expenditures

 Travel ... 87

 Passenger fares ... 5

 Other transportation 80 -178

 Other services -975 1,286
 Affiliated -606 74
 Unaffiliated -365 1,201
 Government ... 13

 Income -2,707 -821
 Direct investment -620 377
 Other investment -2,389 -1,198
 Compensation of 302 ...
 employees

Current unilateral -1,191 167
 transfers

 Total adjustments -4,209 6,968

Table 3.1.--U.S.-Canadian Current-Account Reconciliation, Northbound

[Millions of U.S. dollars]

 Published estimates

 U.S. Canadian Difference
 receipt payments
 1997
Goods and services 172,724 174,632 -1,910
 Goods 152,069 152,720 -651

 Services 20,655 21,912 -1,259
 Transfers under U.S. 91 (1) 91
 military agency
 sales contracts
 Travel 6,636 7,422 -586
 Passenger fares 1,320 1,197 123
 Other transportation 2,414 2,319 95
 Royalties and license fees 1,592 1,608 -16
 Other services 8,402 9,366 -966

Income 21,652 25,841 -4,189
 Investment income 21,574 25,841 -4,267
 Direct investment 10,548 9,096 1,452
 Other investment 11,026 16,745 -5,719
 Compensation of employees 78 (3) 78

Current unilateral ... ... ...
 transfers, net
Current unilateral ... 513 -513
 transfers, gross

 Current account, northbound 194,376 200,986 -6,612

 1998

Goods and services 176,523 178,280 -1,757

 Goods 156,810 157,531 -721

 Services 19,713 20,749 -1,036
 Transfers under U.S. 106 (1) 106
 military agency
 sales contracts
 Travel 6,206 6,703 -497
 Passenger fares 1,477 1,274 203
 Other Transportation 2,329 2,220 109
 Royalties and 1,646 1,547 99
 license fees
 Other services 7,949 9,005 -1,056

Income 19,409 24,238 -4,830
 Investment income 19,330 24,238 -4,908
 Direct investment 8,104 7,685 419
 Other investment 11,226 16,553 -5,327
 Compensation of employees 79 (3) 79

Current unilateral ... ... ...
 transfers, net
Current unilateral ... -485 -485
 transfers, gross

 Current account, northbound 195,932 203,003 -7,072

 Reconciled estimates

 U.S. Canadian Remaining
 receipts payments difference

 1997

Goods and services 173,883 173,883 ...
 Goods 152,234 152,234 ...

 Services 21,649 21,649 ...
 Transfers under U.S. 91 91 ...
 military agency
 sales contracts
 Travel 7,453 7,453 ...
 Passenger fares 1,197 1,197 ...
 Other transportation 2,416 2,416 ...
 Royalties and license fees (2) (2) ...
 Other services 10,492 10,492 ...

Income 24,130 24,130 ...
 Investment income 24,052 24,052 ...
 Direct investment 10,740 10,740 ...
 Other investment 13,312 13,312 ...
 Compensation of employees 78 78 ...

Current unilateral ... ... ...
 transfers, net
Current unilateral 281 281 ...
 transfers, gross

 Current account, northbound 198,294 198,294 ...

 1998

Goods and services 177,296 177,296 ...

 Goods 156,950 156,950 ...

 Services 20,346 20,346 ...
 Transfers under U.S. 106 106 ...
 military agency
 sales contracts
 Travel 6,723 6,723 ...
 Passenger fares 1,274 1,274 ...
 Other Transportation 2,347 2,347 ...
 Royalties and (2) (2) ...
 license fees
 Other services 9,896 9,896 ...

Income 21,389 21,389 ...
 Investment income 21,311 21,311 ...
 Direct investment 8,189 8,189 ...
 Other investment 13,122 13,122 ...
 Compensation of employees 79 79 ...

Current unilateral ... ...
 transfers, net
Current unilateral 277 277 ...
 transfers, gross

 Current account, northbound 198,962 198,982 ...

 Adjustments to
 published estimates

 United Canada
 States

 1997

Goods and services 1,159 -749
 Goods 165 -486

 Services 994 -263
 Transfers under U.S. ... 91
 military agency
 sales contracts
 Travel 617 31
 Passenger fares -123 ...
 Other transportation 2 97
 Royalties and license fees -1,592 -1,608
 Other services 2,090 1,126

Income 2,478 -1,711
 Investment income 2,478 -1,789
 Direct investment 192 1,644
 Other investment 2,286 -3,433
 Compensation of employees ... 78

Current unilateral ... ...
 transfers, net
Current unilateral 261 -232
 transfers, gross

 Current account, northbound 3,918 -2,692

 1998

Goods and services 773 -984

 Goods 140 -581

 Services 633 -403
 Transfers under U.S. ... 106
 military agency
 sales contracts
 Travel 517 20
 Passenger fares -203 ...
 Other Transportation 18 127
 Royalties and -1,646 -1,547
 license fees
 Other services 1,947 891

Income 1,981 -2,849
 Investment income 1,981 -2,927
 Direct investment 85 504
 Other investment 1,896 -3,431
 Compensation of employees ... 79

Current unilateral ... ...
 transfers, net
Current unilateral 277 -208
 transfers, gross

 Current account, northbound 3,031 -4,041

(1.) In the Canadian published accounts, transactions of U.S. military agencies are not shown separately.

(2) Royalties and license fees are included in "other" services for reconciliation.

(3.) In the Canadian published accounts, compensation of employees is included in "other" services.

Table 3.2.--U.S.-Canadian Current-Account Reconciliation, Southbound

[Millions of U.S. dollars]

 Published estimates

 Canadian U.S.
 receipts payments Difference

 1997

Goods and services 191,225 183,867 7,358

 Goods 175,153 170,058 5,095

 Services 16,072 13,809 2,263
 Direct defense expenditures (1) 57 -57
 Travel 4,994 4,904 90
 Passenger fares 470 470 ...
 Other transportation 2,747 3,037 -290
 Royalties and license fees 391 322 69
 Other services 7,470 5,019 2,451

Income 11,272 8,894 2,378
 Investment income 11,272 8,598 2,674
 Direct investment 4,235 3,360 875
 Other private investment 5,979 4,078 1,901
 US Government liabilities 1,058 1,160 -102
 Compensation of employees (3) 296 -296

Current unilateral ... 536 -536
 transfers, net
Current unilateral 2,133 ... 2,133
 transfers, gross

 Current account, 204,630 193,297 11,333
 southbound

 1998

Goods and services 199,080 191,147 7,933

 Goods 181,712 175,808 5,906

 Services 17,367 15,341 2,027
 Direct defense expenditures (1) 68 -68
 Travel 5,806 5,719 87
 Passenger fares 590 585 5
 Other transportation 2,653 2,911 -258
 Royalties and license fees 377 425 -48
 Other services 7,942 5,633 2,309

Income 10,334 8,448 1,886
 Investment income 10,334 8,148 2,188
 Direct investment 4,007 3,010 997
 Other private investment 5,295 4,261 1,034
 US Government 1,032 875 157
 liabilities
 Compensation of employees (3) 302 -302

Current unilateral ... 613 -813
 transfers, net
Current unilateral 1,971 ... 1,971
 transfers, gross

 Current account, 211,383 200,208 11,177
 southbound

 Reconciled estimates

 Canadian U.S. Remaining
 receipts payments difference

 1997

Goods and services 191,754 191,754 ...

 Goods 176,480 176,480 ...

 Services 15,274 15,274 ...
 Direct defense expenditures 57 57 ...
 Travel 4,994 4,994 ...
 Passenger fares 470 470 ...
 Other transportation 2,825 2,825 ...
 Royalties and license fees (2) (2) ...
 Other services 6,928 6,928 ...

Income 8,508 8,508 ...
 Investment income 8,212 8,212 ...
 Direct investment 3,393 3,393 ...
 Other private investment 3,708 3,708 ...
 US Government liabilities 1,111 1,111 ...
 Compensation of employees 298 296 ...

Current unilateral ... ... ...
 transfers, net
Current unilateral 703 703 ...
 transfers, gross

 Current account, 200,965 200,965 ...
 southbound

 1998

Goods and services 198,769 198,769 ...

 Goods 182,228 182,228 ...

 Services 16,541 16,541 ...
 Direct defense expenditures 68 68 ...
 Travel 5,806 5,806 ...
 Passenger fares 590 590 ...
 Other transportation 2,733 2,733 ...
 Royalties and license fees (2) (2) ...
 Other services 7,344 7,344 ...

Income 7,627 7,627 ...
 Investment income 7,325 7,325 ...
 Direct investment 3,387 3,387 ...
 Other private investment 3,039 3,039 ...
 US Government 899 899 ...
 liabilities
 Compensation of employees 302 302 ...

Current unilateral ... ...
 transfers, net
Current unilateral 780 780 ...
 transfers, gross

 Current account, 207,176 207,176 ...
 southbound

 Adjustments to
 published estimates

 United
 Canada States
 1997
Goods and services 529 7,887

 Goods 1,327 6,422

 Services -798 1,465
 Direct defense expenditures 57 ...
 Travel ... 90
 Passenger fares ... ...
 Other transportation 78 -212
 Royalties and license fees -391 -322
 Other services -542 1,909

Income -2,764 -386
 Investment income -3,060 -386
 Direct investment -842 33
 Other private investment -2,271 -370
 US Government liabilities 53 -49
 Compensation of employees 296 ...

Current unilateral ... -536
 transfers, net
Current unilateral -1,430 703
 transfers, gross

 Current account, -3,665 7,668
 southbound

 1998

Goods and services -311 7,622

 Goods 516 6,422

 Services -827 1,200
 Direct defense expenditures 68 ...
 Travel ... 87
 Passenger fares ... 5
 Other transportation 80 -178
 Royalties and license fees -377 -425
 Other services -598 1,711

Income -2,707 -821
 Investment income -3,009 -821
 Direct investment -820 377
 Other private investment -2,256 -1,222
 US Government -133 24
 liabilities
 Compensation of employees 302 ...

Current unilateral ... -613
 transfers, net
Current unilateral -1,191 780
 transfers, gross

 Current account, -4,209 6,968
 southbound

(1.) In the Canadian published accounts, transactions of U.S. military agencies are not shown separately.

(2.) Royalties and license fees are included in "other" services for reconciliation.

(3.) In the Canadian published accounts, compensation of employees in included in "other" services.

Table 4.1.--Trade in Goods, Northbound

[Millions of U.S. dollars]

 U.S. Canadian Type of
 receipts payments adjustment
 1997
Balance of payments
 basis, published 152,069 152,720
Reconciliation
 adjustments:
 Inland freight ... 513 Statistical
 Repair of equipment 138 ... Reclassification
 Other balance of
 payments adjustments 27 -310 Definitional
 and statistical
 Statistical adjustments ... -689 Statistical

Reconciled 152,234 152,234

 1998
Balance of payments
 basis, published 156,810 157,531
Reconciliation
 adjustments:
 Inland freight ... -537 Statistical
 Repair of equipment 144 ... Reclassification
 Other balance of
 payments adjustments -4 58 Definitional
 and statistical
 Statistical adjustments ... -102 Statistical

Reconciled 156,950 156,950
Table 4.2.--Trade in Goods, Southbound

[Millions of U.S. dollars]

 Canadian U.S. Type of
 receipts payments adjustment
 1997
Balance of payments
 basis, published 115,153 170,058
Reconciliation
 adjustments:
 Canadian reexports ... 4,945 Definitional
 Inland freight 913 1,310 Statistical
 Other balance of
 payments adjustments 1,337 167 Definitional and
 reclassification
 Statistical adjustments -923 ... Statistical

Reconciled 176,480 176,480

 1998
Balance of payments
 basis, published 181,712 175,806
Reconciliation
 adjustments:
 Canadian reexports ... 4,758 Definitional
 Inland freight 960 1,414 Statistical
Other balance of
 payments adjustments -252 250 Definitional and
 reclassification
 Statistical adjustments -192 ... Statistical

Reconciled 182,228 182,228

Table 5.1.--Travel, Passenger Fares, and Other Transportation, Northbound [Millions of U.S. dollars]

 Published estimates

 U.S. Canadian
 receipts payments Difference
 1997
Travel 6,836 7,422 -586
 Business and personal 6,836 6,864 -28
 Education ... 426 -426
 Medical ... 132 -132

Passenger fares 1,320 1,197 123
Other transportation 2,414 2,319 95
 Freight 1,904 1,985 -81
 Ocean 54 219 -165
 Air (D) (D) (D)
 Truck 1,278 1,278 ...
 Other (D) (D) (D)

Port services 510 320 190
 Vessel operators 68 31 37
 Airline operators 287 287 ...
 Other 155 2 153

Other ... 15 -15

 1998
Travel 6,206 6,703 -497
 Business and personal 6,206 6,116 90
 Education ... 452 -452
 Medical ... 134 -134

Passenger fares 1,477 1,274 203
Other transportation 2,329 2,220 109
 Freight 1,857 1,895 -38
 Ocean 60 178 -118
 Air (D) (D) (D)
 Truck 1,222 1,222 ...
 Other (D) (D) (D)

Port services 471 309 162
 Vessel operators 37 29 8
 Airline operators 277 278 -1
 Other 157 2 155

Other ... 17 -17

 Reconciled estimates

 U.S. Canadian Remaining
 receipts payments difference
 1997
Travel 7,453 7,453 ...
 Business and personal 6,864 6,864 ...
 Education 438 438 ...
 Medical 151 151 ...

Passenger fares 1,197 1,197 ...
Other transportation 2,416 2,416 ...
 Freight 1,887 1,887 ...
 Ocean 143 143 ...
 Air (D) (D) ...
 Truck 1,278 1,278 ...
 Other (D) (D) ...

Port services 515 515 ...
 Vessel operators 31 31 ...
 Airline operators 287 287 ...
 Other 197 197 ...

Other 14 14 ...

 1998
Travel 6,723 6,723 ...
 Business and personal 6,116 6,116 ...
 Education 442 442 ...
 Medical 165 165 ...

Passenger fares 1,274 1,274 ...
Other transportation 2,347 2,347 ...
 Freight 1,831 1,831 ...
 Ocean 120 120 ...
 Air (D) (D) ...
 Truck 1,222 1,222 ...
 Other (D) (D) ...

Port services 499 499 ...
 Vessel operators 29 29 ...
 Airline operators 277 277 ...
 Other 193 193 ...

Other 16 16 ...

 Adjustments to published estimates

 United
 States Canada Type of adjustment
 1997
Travel 617 31
 Business and personal 28 ... Statistical
 Education 438 12 Reclassification
 and statistical
 Medical 151 19 Reclassification
 and statistical

Passenger fares -123 ... Statistical
Other transportation 2 97
 Freight -17 -98
 Ocean 89 -76 Statistical
 Air (D) (D) Statistical
 Truck ... ...
 Other (D) (D) Statistical

Port services 5 195
 Vessel operators -37 ... Statistical
 Airline operators ... ...
 Other 42 195 Statistical

Other 14 -1 Reclassification
 and statistical

 1998
Travel 517 20
 Business and personal -90 ... Statistical
 Education 442 -10 Reclassification
 and statistical
 Medical 165 31 Reclassification
 and statistical

Passenger fares -203 ... Statistical
Other transportation 18 127
 Freight -26 -64
 Ocean 60 -58 Statistical
 Air (D) (D) Statistical
 Truck ... ...
 Other (D) (D) Statistical

Port services 28 190
 Vessel operators -8 ... Statistical
 Airline operators ... -1 Statistical
 Other 36 191 Statistical

Other 16 -1 Reclassification
 and statistical

(D) Data suppressed to avoid disclosure of data of individual companies.

Table 5.2.--Travel, Passenger Fares, and Other Transportation, Southbound [Millions of U.S. dollars]

 Published estimates

 Canadian U.S. Difference
 receipts payments
 1997
Travel 4,994 4,904 90
 Business and personal 4,878 4,904 -26
 Education 69 ... 69
 Medical 47 ... 47

Passenger fares 470 ... ...
Other transportation 2,747 3,037 -290
 Freight 2,310 2,415 -105
 Ocean 139 131 8
 Air (D) (D) (D)
 Land 1,987 1,987 ...
 Other (D) (D) (D)

Port services 350 623 513
 Vessel operators 34 165 60
 Airline operators 249 373 -124
 Other 67 85 -18

Other 89 89 7

 1998
Travel 5,806 5,719 87
 Business and personal 5,692 5,719 -27
 Education 68 ... 68
 Medical 46 ... 46

Passenger fares 590 585 5
Other transportation 2,653 2,911 -259
 Freight 2,198 2,284 -86
 Ocean 146 96 50
 Air (D) (D) (D)
 Land 1,909 1,909 1,909
 Other (D) (D) (D)

Port services 367 627 -260
 Vessel operators 34 160 -126
 Airline operators 268 381 -113
 Other 65 86 -21

Other 87 ... 87

 Reconciled estimates

 Canadian U.S. Remaining
 receipts payments difference
 1997
Travel 4,994 4,994 ...
 Business and personal 4,878 4,878 ...
 Education 69 69 ...
 Medical 47 47 ...

Passenger fares 470 470
Other transportation 2,825 2,825 ...
 Freight 2,306 2,306 ...
 Ocean 135 135 ...
 Air (D) (D) ...
 Land 1,987 1,987 ...
 Other (D) (D) ...

Port services 513 513 ...
 Vessel operators 60 60 ...
 Airline operators 249 249 ...
 Other 204 204 ...

Other 7 7 ...

 1998
Travel 5,806 5,806 ...
 Business and personal 5,692 5,692 ...
 Education 68 68 ...
 Medical 46 46 ...

Passenger fares 590 590 ...
Other transportation 2,733 2,733 ...
 Freight 2,188 2,188 ...
 Ocean 135 135 ...
 Air (D) (D) ...
 Land ... ... ...
 Other (D) (D) ...

Port services 537 537 ...
 Vessel operators 74
 Airline operators 252 252 ...
 Other 211 211 ...

Other 7 7 ...

 Adjustments to published estimates

 United
 Canada States Type of adjustment

 1997
Travel ... 90
 Business and personal ... -26 Statistical
 Education ... 69 Reclassification
 and statistical
 Medical ... 47 Reclassification
 and statistical

Passenger fares ... ...
Other transportation 78 -212
 Freight -4 -109
 Ocean -4 4 Statistical
 Air (D) (D) Statistical
 Land ... ...
 Other (D) (D) Statistical

Port services 163 -110
 Vessel operators 26 -105 Statistical
 Airline operators ... -124 Statistical
 Other 137 119 Statistical

Other -82 7 Definitional,
 reclassification,
 and statistical

 1998
Travel ... 87
 Business and personal ... -27 Statistical
 Education ... 68 Reclassification
 and statistical
 Medical ... 46 Reclassification
 and statistical

Passenger fares ... 5 Statistical
Other transportation 80 -178
 Freight -10 -96
 Ocean -11 39 Statistical
 Air (D) (D) Statistical
 Land 1 ... Statistical
 Other (D) (D) Statistical

Port services 170 -90
 Vessel operators 40 -86 Statistical
 Airline operators -16 -129 Statistical
 Other 146 125 Statistical

Other -80 7 Definitional,
 reclassification,
 and statistical

(D) Data suppressed to avoid disclosure of data of individual companies.

Table 6.1.--Other Services, Northbound

[Millions of U.S. dollars]

 Published estimates

 U.S. Canadian Difference
 receipts payments

 1997
 Total 9,992 10,974 -982
Private:
 Affiliated 5,516 6,471 -955

 Royalties and
 license fees 1,286 1,361 -75
 Other services 4,230 5,110 -880

Unaffiliated 4,340 4,360 -20

 Royalties, license
 fees, and selected
 services 878 688 190
 Insurance 389 444 -55
 Financial services 602 514 88
 Education and
 training 457 11 446
 Communications 300 661 -361
 Computer services 374 182 192
 Business services 1,163 720 443
 Sports and
 entertainment 177 933 -756
 Other ... 207 -207

Government:
 United States 46 34 12
 Canada 91 110 -19

 1998
 Total 9,595 10,552 -957

Private:
 Affiliated 4,918 6,618 -1,700

 Royalties and
 license fees 1,291 1,309 -18
 Other services 3,627 5,309 -1,682

Unaffiliated 4,503 3,755 748
 Royalties, license
 fees, and selected
 services 647 646 301
 Insurance 324 -11 335
 Financial services 792 532 260
 Education and
 training 458 11 447
 Communications 293 613 -320
 Computer services 496 198 298
 Business services 1,028 728 300
 Sports and
 entertainment 165 835 -670
 Other ... 203 -203

Government:
 United States 85 74 11
 Canada 88 105 -17

 Reconciled estimates

 U.S. Canadian Remaining
 receipts payments difference
 1997
 Total 10,492 10,492 ...
Private:
 Affiliated 5,500 5,500 ...

 Royalties and
 license fees (1) (1) ...
 Other services (1) (1) ...

Unaffiliated 4,835 4,835 ...

 Royalties, license
 fees, and selected
 services 855 855 ...
 Insurance 408 408 ...
 Financial services 648 648 ...
 Education and
 training 19 19 ...
 Communications 321 321 ...
 Computer services 374 374 ...
 Business services 1,310 1,310 ...
 Sports and
 entertainment 900 900 ...
 Other ... ... ...

Government:
 United States 46 46 ...
 Canada 110 110 ...

 1998
 Total 9,896 9,896 ...

Private:
 Affiliated 4,874 4,874 ...

 Royalties and
 license fees (1) (1) ...
 Other services (1) (1) ...

Unaffiliated 4,833 4,833 ...
 Royalties, license
 fees, and selected
 services 924 924 ...
 Insurance 158 158 ...
 Financial services 878 878 ...
 Education and
 training 16 16 ...
 Communications 320 320 ...
 Computer services 496 496 ...
 Business services 1,257 1,257 ...
 Sports and
 entertainment 784 784 ...
 Other ... ... ...

Government:
 United States 85 85 ...
 Canada 105 105 ...

 Adjustments to published estimates

 United Canada Type of adjustment
 States
 1997
 Total 500 -482
Private:
 Affiliated -16 -971 Definitional
 and statistical

 Royalties and
 license fees (1) (1)
 Other services (1) (1)

Unaffiliated 495 475

 Royalties, license
 fees, and selected
 services -23 167 Statistical
 Insurance 19 -36 Statistical
 Financial services 46 134 Statistical
 Education and Reclassification
 training -438 8 and statistical
 Communications 21 -340 Statistical
 Computer services ... 192 Statistical
 Business services 147 590 Reclassification
 and statistical
 Sports and
 entertainment 723 -33 Reclassification
 and statistical
 Other ... -207

Government:
 United States ... 12 Statistical
 Canada 19 ... Statistical

 1998
 Total 301 -656

Private:
 Affiliated -44 -1,744 Definitional and
 statistical

 Royalties and
 license fees (1) (1)
 Other services (1) (1)

Unaffiliated 330 1,078
 Royalties, license
 fees, and selected
 services -23 278 Statistical
 Insurance -166 169 Statistical
 Financial services 86 346 Statistical
 Education and Reclassification
 training -442 5 and statistical
 Communications 27 -293 Statistical
 Computer services ... 298 Statistical
 Business services 229 529 Reclassification
 and statistical
 Sports and
 entertainment 619 -51 Reclassification
 and statistical
 Other ... -203

Government:
 United States ... 11 Statistical
 Canada 17 ... Statistical

(1.) Royalties and license fees are combined with "other" services for reconciliation.

Table 6.2.--Other Services, Southbound

[Millions of U.S. dollars]

 Published estimates

 Canadian U.S. Difference
 receipts payments
 1997

 Total 7,861 5,341 2,520

Private:

 Affiliated 3,559 2,910 649

 Royalties and 250 188 62
 license fees
 Other services 3,309 2,722 587

 Unaffiliated 4,113 2,255 1,858

 Royalties, 777 402 375
 license fees,
 and selected
 services.
 Insurance 246 519 -273
 Financial services 415 222 193
 Education and 19 19 ...
 training
 Communications 678 333 345
 Computer services 396 73 323
 Business services 674 568 106
 Sports and 717 119 598
 entertainment
 Other 191 ... 191

Government:
 Canada 13 ... 13
 United States 176 176 ...

 1998

 Total 8,319 6,058 2,261

Private:

 Affiliated 4,060 3,380 680

 Royalties and 241 295 -54
 license fees
 Other services 3,819 3,085 734

 Unaffiliated 4,036 2,470 1,566

 Royalties, 791 470 321
 license fees,
 and selected
 services.
 Insurance 248 509 -261
 Financial services 449 231 218
 Education and 20 19 1
 training
 Communications 620 333 287
 Computer services 401 80 321
 Business services 681 709 -28
 Sports and 626 119 507
 entertainment
 Other 200 ... 200

Government:
 Canada 13 ... 13
 United States 207 207 ...

 Reconciled estimates

 Canadian U.S. Remaining
 receipts payments difference

 1997

 Total 6,928 6,928 ...

Private:

 Affiliated 2,992 2,992 ...

 Royalties and (1) (1) ...
 license fees
 Other services (1) (1) ...

 Unaffiliated 3,748 3,748 ...

 Royalties, 896 896 ...
 license fees,
 and selected
 services.
 Insurance 325 325 ...
 Financial services 340 340 ...
 Education and 19 19 ...
 training
 Communications 333 333 ...
 Computer services 250 250 ...
 Business services 871 871 ...
 Sports and 714 714 ...
 entertainment
 Other ... ... ...

Government:
 Canada 13 13 ...
 United States 176 176 ...

 1998

 Total 7,344 7,344 ...

Private:

 Affiliated 3,454 3,454 ...

 Royalties and (1) (1) ...
 license fees
 Other services (1) (1) ...

 Unaffiliated 3,671 3,671 ...

 Royalties, 900 900 ...
 license fees,
 and selected
 services.
 Insurance 312 312 ...
 Financial services 335 335 ...
 Education and 20 20 ...
 training
 Communications 333 333 ...
 Computer services 268 268 ...
 Business services 877 877 ...
 Sports and 626 626 ...
 entertainment
 Other ... ... ...

Government:
 Canada 13 13 ...
 United States 207 207 ...

 Adjustments to published
 estimates

 Canada United
 States

 1997

 Total -933 1,587

Private:

 Affiliated -567 82

 Royalties and (1) (1)
 license fees
 Other services (1) (1)

 Unaffiliated -365 1,493

 Royalties, 119 494
 license fees,
 and selected
 services.
 Insurance 79 -194
 Financial services -75 118
 Education and ... ...
 training
 Communications -345 ...
 Computer services -146 177
 Business services 197 303
 Sports and -3 595
 entertainment
 Other -191 ...

Government:
 Canada ... 13
 United States ... ...

 1998

 Total -975 1,286

Private:

 Affiliated -606 74

 Royalties and (1) (1)
 license fees
 Other services (1) (1)

 Unaffiliated -365 1,201

 Royalties, 109 430
 license fees,
 and selected
 services.
 Insurance 64 -197
 Financial services -114 104
 Education and ... 1
 training
 Communications -287 ...
 Computer services -133 188
 Business services 196 168
 Sports and ... 507
 entertainment
 Other -200 ...

Government:
 Canada ... 13
 United States ... ...

 Adjustments to published
 estimates

 Type of adjustment

 1997

 Total

Private:

 Affiliated Definitional, reclassification, and
 statistical

 Royalties and
 license fees
 Other services

 Unaffiliated

 Royalties, Statistical
 license fees,
 and selected
 services.
 Insurance Statistical
 Financial services Statistical
 Education and
 training
 Communications Reclassification and statistical
 Computer services Statistical
 Business services Reclassification and statistical
 Sports and Statistical
 entertainment
 Other

Government:
 Canada Statistical
 United States

 1998

 Total

Private:

 Affiliated Definitional, reclassification, and
 statistical

 Royalties and
 license fees
 Other services

 Unaffiliated

 Royalties, Statistical
 license fees,
 and selected
 services.
 Insurance Statistical
 Financial services Statistical
 Education and Statistical
 training
 Communications Reclassification and statistical
 Computer services Statistical
 Business services Reclassification and statistical
 Sports and Statistical
 entertainment
 Other

Government:
 Canada Statistical
 United States

(1.) Royalties and license fees are combined with "other" services for reconciliation.

Table 7.1.--Direct Investment Income, Northbound

[Millions of U.S. dollars]

 Published estimates

 U.S. Canadian
 receipts payments Difference

 1997

Direct investment income 10,548 9,096 1,452
 Earnings of 9,718 8,131 1,587
 incorporated affiliates
 Dividends 4,740 4,133 607
 Reinvested earnings 4,978 3,998 980
 Earnings of unincorporated 520 258 262
 affiliates.
 Net interest 310 708 -398

 1998

Direct investment income 8,104 7,685 419
 Earnings of 7,557 6,754 803
 incorporated affiliates
 Dividends 3,870 3,513 357
 Reinvested earnings 3,887 3,241 446
 Earnings of unincorporated 157 268 -111
 affiliates.
 Net interest 390 663 -273

 Reconciled estimates

 U.S. Canadian Remaining
 receipts payments difference

 1997

Direct investment income 10,740 10,740 ...
 Earnings of 9,718 9,718 ...
 incorporated affiliates
 Dividends 4,740 4,740 ...
 Reinvested earnings 4,978 4,978 ...
 Earnings of unincorporated 520 520 ...
 affiliates.
 Net interest 502 502 ...

 1998

Direct investment income 8,189 8,189 ...
 Earnings of 7,557 7,557 ...
 incorporated affiliates
 Dividends 3,870 3,870 ...
 Reinvested earnings 3,687 3,687 ...
 Earnings of unincorporated 232 232 ...
 affiliates.
 Net interest 400 400 ...

 Adjustments to
 published estimates

 United
 States Canada
 1997

Direct investment income 192 1,644
 Earnings of ... 1,587
 incorporated affiliates
 Dividends ... 607
 Reinvested earnings ... 980
 Earnings of unincorporated ... 262
 affiliates.
 Net interest 192 -206

 1998

Direct investment income 85 504
 Earnings of ... 803
 incorporated affiliates
 Dividends ... 357
 Reinvested earnings ... 446
 Earnings of unincorporated 75 -36
 affiliates.
 Net interest 10 -263

 Adjustments to published estimates

 Type of adjustment

 1997

Direct investment income
 Earnings of
 incorporated affiliates
 Dividends Definitional, reclassification,
 and statistical
 Reinvested earnings Statistical
 Earnings of unincorporated Definitional, reclassification,
 affiliates. and statistical
 Net interest Reclassification, net to gross,
 and statistical

 1998

Direct investment income
 Earnings of
 incorporated affiliates
 Dividends Definitional, reclassification,
 and statistical
 Reinvested earnings Statistical
 Earnings of unincorporated Definitional, reclassification,
 affiliates. and statistical
 Net interest Reclassification, net to gross,
 and statistical
Table 7.2.--Direct Investment Income, Southbound

[Millions of U.S. dollars]

 Published estimates

 Canadian U.S.
 receipts payments Difference

 1997

Direct investment income 4,235 3,360 875
 Earnings of 3,102 3,151 -49
 incorporated affiliates
 Dividends 1,323 793 530
 Reinvested earnings 1,779 2,358 -579
 Earnings of 913 -104 1,017
 unincorporated
 affiliates
 Net interest 221 314 -93

 1998

Direct investment income 4,007 3,010 997
 Earnings of 2,900 2,449 451
 incorporated affiliates
 Dividends 644 3,416 -2,772
 Reinvested earnings 2,258 -967 3,223
 Earnings of 889 145 744
 unincorporated
 affiliates
 Net interest 218 416 -198

 Reconciled estimates

 Canadian U.S. Remaining
 receipts payments difference

 1997

Direct investment income 3,393 3,393 ...
 Earnings of 3,078 3,078 ...
 incorporated affiliates
 Dividends 526 526 ...
 Reinvested earnings 2,552 2,552 ...
 Earnings of 2 2 ...
 unincorporated
 affiliates
 Net interest 314 314 ...

 1998

Direct investment income 3,387 3,387 ...
 Earnings of 2,808 2,808 ...
 incorporated affiliates
 Dividends (D) (D) ...
 Reinvested earnings (D) (D) ...
 Earnings of 162 162 ...
 unincorporated
 affiliates
 Net interest 416 416 ...

 Adjustments to
 published estimates

 United
 Canada States

 1997

Direct investment income -842 33
 Earnings of -24 -73
 incorporated affiliates
 Dividends -797 -267
 Reinvested earnings 773 194
 Earnings of -911 106
 unincorporated
 affiliates
 Net interest 93 ...

 1998

Direct investment income -620 377
 Earnings of -92 359
 incorporated affiliates
 Dividends (D) (D)
 Reinvested earnings (D) (D)
 Earnings of -727 17
 unincorporated
 affiliates
 Net interest 198 ...

 Reconciled estimates

 Type of adjustment

 1997

Direct investment income
 Earnings of
 incorporated affiliates
 Dividends Statistical
 Reinvested earnings Statistical
 Earnings of Definitional and statistical
 unincorporated
 affiliates
 Net interest Gross to net and statistical

 1998

Direct investment income
 Earnings of
 incorporated affiliates
 Dividends Statistical
 Reinvested earnings Statistical
 Earnings of Definitional and statistical
 unincorporated
 affiliates
 Net interest Gross to net and statistical

(D) Data suppressed to avoid disclosure of data of individual companies.

Table 8.1.--Other Investment Income, Northbound

[Millions of U.S. dollars]

 Published estimates

 U.S. Canadian Difference
 receipts payments
 1997

Other Investment Income 11,026 16,745 -5,719

 Securities 7,298 10,598 -3,300
 Dividends 1,171 846 325
 Interest on bonds 6,127 9,752 -3,625

 U.S. claims/Canadian 3,728 6,146 -2,418
 liabilities
 U.S. bank claims 3,051 3,544 -493
 Other private U.S. claims 677 2,602 -1,925

 1998

Other investment income 11,226 16,553 -5,327

 Securities 7,280 10,454 -3,174
 Dividends 1,213 789 424
 Interest on bonds 6,067 9,665 -3,598

 U.S. claims/Canadian 3,946 6,099 -2,153
 liabilities
 U.S. bank claims 3,150 3,752 -602
 Other private U.S. claims 796 2,347 -1,551

 Reconciled estimates

 U.S. Canadian Remaining
 receipts payments difference

 1997

Other Investment Income 13,312 13,312 ...

 Securities 10,244 10,244 ...
 Dividends 1,171 1,171 ...
 Interest on bonds 9,073 9,073 ...

 U.S. claims/Canadian 3,070 3,070 ...
 liabilities
 U.S. bank claims 1,175 1,175 ...
 Other private U.S. claims 1,895 1,895 ...

 1998

Other investment income 13,122 13,122 ...

 Securities 10,198 10,199 ...
 Dividends 1,213 1,213 ...
 Interest on bonds 8,986 8,986 ...

 U.S. claims/Canadian 2,925 2,925 ...
 liabilities
 U.S. bank claims 1,065 1,065 ...
 Other private U.S. claims 1,860 1,860 ...

 Adjustments to
 published estimates

 United Canada
 States
 1997

Other Investment Income 2,286 -3,433

 Securities 2,946 -354
 Dividends ... 325
 Interest on bonds 2,946 -379

 U.S. claims/Canadian -658 -3,076
 liabilities
 U.S. bank claims -1,876 -2,369
 Other private U.S. claims 1,218 -707

 1998

Other investment income 1,896 -3,431

 Securities 2,919 -255
 Dividends ... 424
 Interest on bonds 2,919 -679

 U.S. claims/Canadian -1,021 -3,174
 liabilities
 U.S. bank claims -2,085 -2,687
 Other private U.S. claims 1,064 -487

 Adjustments to
 published estimates

 Type of adjustment

 1997

Other Investment Income

 Securities
 Dividends Definitional, reclassification,
 and statistical
 Interest on bonds Definitional and statistical

 U.S. claims/Canadian
 liabilities
 U.S. bank claims Net to gross, gross to net,
 and statistical
 Other private U.S. claims Net to gross and statistical

 1998

Other investment income

 Securities
 Dividends Definitional, reclassification,
 and statistical
 Interest on bonds Definitional and statistical

 U.S. claims/Canadian
 liabilities
 U.S. bank claims Net to gross, gross to net,
 and statistical
 Other private U.S. claims Net to gross and statistical
Table 8.2.--Other Investment Income, Southbound

[Millions of U.S. dollars]

 Published estimates

 Canadian U.S. Difference
 receipts payments

 1997

Other investment income 7,037 5,238 1,799

 Securities 1,823 2,095 -272
 Dividends 1,192 1,314 -122
 Interest on bonds 631 781 -150

 Canadian claims/U.S. 4,156 1,983 2,173
 liabilities
 Canadian bank claims 3,714 1,705 2,009
 Other Canadian claims 442 278 164

 U.S. Government 1,058 1,160 -102
 liabilities

 1998

Other investment income 6,327 5,136 1,191

 Securities 1,729 2,389 -660
 Dividends 1,116 1,310 -194
 Interest on bonds 613 1,079 -466

 Canadian claims/U.S. 3,587 1,872 1,695
 liabilities
 Canadian bank claims 3,097 1,441 1,656
 Other Canadian claims 470 431 39

 U.S. Government 1,032 875 157
 liabilities

 Reconciled estimates

 Canadian U.S. Remaining
 receipts payments difference

 1997

Other investment income 4,819 4,819 ...

 Securities 2,027 2,027 ...
 Dividends 1,314 1,314 ...
 Interest on bonds 713 713 ...

 Canadian claims/U.S. 1,680 1,680 ...
 liabilities
 Canadian bank claims 1,400 1,400 ...
 Other Canadian claims 280 280 ...

 U.S. Government 1,111 1,111 ...
 liabilities

 1998

Other investment income 3,938 3,938 ...

 Securities 2,156 2,156 ...
 Dividends 1,310 1,310 ...
 Interest on bonds 846 848 ...

 Canadian claims/U.S. 682 682 ...
 liabilities
 Canadian bank claims 583 583 ...
 Other Canadian claims 299 299 ...

 U.S. Government 899 899 ...
 liabilities

 Adjustments to
 published estimates

 Canada United
 States

 1997

Other investment income -2,218 -419

 Securities 204 -68
 Dividends 122 ...
 Interest on bonds 82 -68

 Canadian claims/U.S. -2,476 -303
 liabilities
 Canadian bank claims -2,314 -305
 Other Canadian claims -162 2

 U.S. Government 53 -49
 liabilities

 1998

Other investment income -2,389 -1,198

 Securities 427 -233
 Dividends 194 ...
 Interest on bonds 233 -233

 Canadian claims/U.S. -2,685 -990
 liabilities
 Canadian bank claims -2,514 -858
 Other Canadian claims -171 -132

 U.S. Government -133 24
 liabilities

 Adjustments to
 published estimates

 Type of adjustment

 1997

Other investment income

 Securities
 Dividends Definitional and statistical
 Interest on bonds Definitional and statistical

 Canadian claims/U.S.
 liabilities
 Canadian bank claims Net to gross, gross to net,
 and statistical
 Other Canadian claims Net to gross and statistical

 U.S. Government Statistical
 liabilities

 1998

Other investment income

 Securities
 Dividends Definitional and statistical
 Interest on bonds Definitional and statistical

 Canadian claims/U.S.
 liabilities
 Canadian bank claims Net to gross, gross to net,
 and statistical
 Other Canadian claims Net to gross and statistical

 U.S. Government Statistical
 liabilities

Reconciled Current-Account Balances

In the U.S. current account, the reconciliation adjustments resulted in a shift of $3.8 billion from a surplus to a deficit for 1997 and an increase of $3.9 billion in the U.S. deficit for 1998. In both years, the changes reflect larger adjustments to the U.S. southbound estimates (U.S. payments) than to the northbound estimates (U.S. receipts) (tables 2.1 and 2.2).(5) The largest increases in the U.S. southbound estimates result from the addition of Canadian reexports to U.S. goods imports (a definitional adjustment), from an increase for undercoverage in the U.S. inland freight adjustment to U.S. goods imports (a statistical adjustment), and from an increase for undercoverage of some services payments (a statistical adjustment). The largest increases in the U.S. northbound estimates result from upward adjustments to investment income for undercoverage of income on U.S. holdings of Canadian bonds (a statistical adjustment).

In the Canadian current account, the reconciliation adjustments resulted in decreases of $0.9 billion in the 1997 Canadian surplus and $o.2 billion in the 1998 Canadian surplus. In both years, the changes reflect larger downward adjustments to the Canadian southbound estimates (Canadian receipts) than to the Canadian northbound estimates (Canadian payments). The Canadian southbound estimates were adjusted downward to account for definitional differences, mainly in unilateral transfers; for methodological differences, mainly in investment income; and for statistical differences, mainly in "other" services. In the Canadian northbound estimates, downward adjustments for definitional and methodological differences, mainly in "other" investment income, were partly offset by upward adjustments for statistical differences, mainly in direct investment income.

Effect of Annual Revisions on the Reconciliation

Once each year, BEA and Statistics Canada revise their published estimates of international transactions to incorporate methodological and statistical revisions. Some of the revisions eliminate or reduce differences in the U.S.- and Canadian-published estimates and thus have a direct impact on the reconciliation process. For example, as a result of changes in the Canadian-published estimates in 1997 to make them conform more closely to the International Monetary Fund's Balance of Payments Manual (fifth edition), four major reconciliation adjustments were eliminated.(6)

This year, revisions to the U.S.- and Canadian-published estimates have further reduced, on balance, the number of adjustments needed for this reconciliation. First, as a result of revisions in the U.S. presentation of the balance of payments account to further align the accounts with international guidelines, the treatment of unilateral transfers in the U.S. accounts is now the same as in the Canadian accounts. The reclassifications of migrants' transfers and of sales and purchases of certain nonproduced nonfinancial assets from the current account to the new U.S. capital account eliminated two of the methodological adjustments that had been needed to reconcile the U.S.- and Canadian-published estimates of current unilateral transfers. However, the U.S. reclassification of employee compensation to the U.S. income account from the U.S. services account has created a new difference between the U.S.- and Canadian-published estimates of those two accounts. Because of data limitations, Canada treats this compensation as arising from "units of own-account labor" and classifies them as services; for the reconciliation, they are reclassified to income in the Canadian accounts.

Second, revisions to the U.S.-published estimates of income receipts on U.S. holdings of Canadian bonds were revised up as a result of new information from the U.S. Treasury Department's 1997 benchmark survey of U.S. portfolio investment abroad. The amount of statistical adjustment needed to reconcile the difference between the Canadian- and U.S.- published estimates of U.S. income on U.S. holdings of Canadian bonds, though still large, was reduced. Last year, the U.S.-published estimate of income received on U.S. holdings of Canadian bonds for 1997 was adjusted upward $3.6 billion in order to reconcile it with the Canadian estimate. This year, the upward adjustment was $2.9 billion for both 1997 and 1998.

Tables 2.1 through 8.2 follow.

Acknowledgments

The reconciliations were carried out under the direction of Hugh Henderson, Chief, Current Account, in Statistics Canada's Balance of Payments and Financial Flows Division, and Anthony DiLullo, assistant chief of BEA'S Balance of Payments Division. At Statistics Canada, Denis Caron, Rick Murat, and Robert Theberge participated in the reconciliation of the Canadian accounts; Denis Caron was responsible for the production and coordination of the reconciliation tables. At BEA, Russell Scholl, assisted by Jane Newstedt, was responsible for reconciling the U.S. portfolio income accounts; Mark New, for the accounts related to U.S. direct investment in Canada; Gregory M. Fouch, for the accounts related to Canadian direct investment in the United States; Kwok Lee, for goods; Michael Mann, for services; and Edward Dozier, for transportation.

(1.) In this article, all values are expressed in U.S. dollars.

(2.) The reconciled estimates are intended to show how the current-account estimates would appear if both countries used the same definitions, methodologies, and data sources. The reconciliation does not necessarily result in revisions to the published accounts.

(3.) The reconciliation of the current account has been undertaken each year since 1970. Summary results of the reconciliations were published in the United States in the following issues of the SURVEY OF CURRENT BUSINESS: June 1975, September 1976 and 1973 December 1979, June 1981, and December 1981 through 1991. Complete details of the reconciliations for 1990 forward were published in the following issues of the SURVEY: November 1992, October 1993 through 1995, and November 1996 through 1998. In Canada, the results were published in the following issues of Canada's Balance of International Payments (catalogue 67-001), a publication of Statistics Canada: Fourth Quarter 1973, Second Quarter 1976 and 1977, Third Quarter 1978 and 1979, First Quarter 1981 and Third Quarter 1981 through 1998.

(4.) For reconciliation, some of the details presented in the tables in this article differ from those presented in balance-of-payments tables regularly published by BEA and Statistics Canada.

(5.) In this article, the term "northbound" refers to U.S. receipts, or Canadian payments; the term "southbound" refers to U.S. payments, or Canadian receipts.

(6.) See Anthony J. DiLullo and Lucie Laliberte, "Reconciliation of the U.S.-Canadian Current Account, 1995 and 1996," in SURVEY Or CURRENT BUSINESS 77 (November 1997): 87 and in Canada's Balance of International Payments, Third Quarter 1997. 22-23.

Note on the U.S.-Canadian Current-Account Reconciliation

The U.S.-Canadian current-account reconciliation is undertaken because of the extensive economic links between Canada and the United States and the need to explain differences between the estimates of the bilateral current account published by the Bureau of Economic Analysis (BEA) and those published by Statistics Canada. The reconciled estimates are intended to assist analysts who use both countries' statistics and to show how the current-account estimates would appear if both countries used common definitions, methodologies, and data sources.(1)

In principle, the bilateral current account of one country should mirror the bilateral current account of the other country. Differences occur in the published estimates of the U.S. and Canadian current accounts because of variations in the definitions, methodologies, and statistical sources that are used by each agency. In addition, some of the differences for 1998 are in components of the current account for which data are still preliminary and subject to revision; these differences may be eliminated when final data for these components become available.

The longstanding Canadian-U.S. current-account reconciliation is among the leading examples of the benefits of international data sharing. As a result of the reconciliation process and the exchange of data, the accuracy of the published estimates of transactions between Canada and the United States and the efficiency in producing the estimates have increased. The exchange of data between Canada and the United States--for transactions such as trade in goods, travel, passenger fares, Canadian and U.S. Government transactions, and some large transportation transactions--cover more than 80 percent of the value of the Canadian and U.S. current account and has eliminated some of the differences in the Canadian- and U.S.-published estimates. Wider opportunities for international data sharing may occur from the planned exchange of the results of the 1997 yearend coordinated benchmark survey of international portfolio investment that was undertaken by 29 countries, including Canada and the United States, under the auspices of the International Monetary Fund.

Although the U.S.- and Canadian-published estimates are reconciled and there is extensive exchange of data between Canada and the United States, differences in the published estimates remain. Complete substitution of reconciled estimates for published estimates and complete exchange of data are not feasible for several reasons. For trade in goods, imports in the U.S. accounts would be affected because the United States attributes Canadian reexports to the country of origin rather than to Canada, the last country of shipment. For some accounts, the protection of the confidentiality of the source data bars the exchange of data. Finally, some requirements, such as valuation adjustments, differ when integrating the international and national (domestic) accounts in each country.

(1.) A detailed article on the methodology used to reconcile the U.S.-Canadian current account was published by BEA in "Reconciliation of the U.S.-Canadian Current Account" in the November 1992 SURVEY and by Statistics Canada in Reconciliation of the Canadian-United States Current Account, 1990-91. Statistics Canada also published a shortened version in the December 1992 Canadian Economic Observer and in Canada's Balance of International Payments, Third Quarter 1992.

Anthony DiLullo is the assistant chief of BEA'S Balance of Payments Division. Hugh Henderson is Chief, Current Account, in Statistics Canada's Balance of Payments and Financial Flows Division. This article will also be published in Canada's Balance of International Payments, Third Quarter 1999.3