U.S. international transactions, third quarter 1991.

DiLullo, Anthony J.

THE U.S. current-account balance shifted to a deficit of $10.5 billion in the third quarter of 1991 from a surplus of $3.0 billion (revised) in the second quarter (table A). (1) The shift reflected an increase in the merchandise trade deficit, as a result of a jump in imports, and a shift in net unilateral transfers to outflows from inflows.

In the capital account, net recorded capital inflows were $10.8 billion in the third quarter, in contrast to outflows of $11.5 billion in the second quarter. Net outflows for U.S. assets abroad decreased to $12.0 billion from $15.0 billion, despite a step-up in outflows for

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U.S. direct investment abroad and continued strength in net U.S. purchases of foreign securities. Net inflows for foreign assets in the United States increased significantly to $22.8 billion from $3.5 billion, reflecting a large shift, from a decrease to an increase, in U.S. bank-reported liabilities. Foreign purchases of U.S. securities and inflows for foreing direct investment

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dropped sharply after recording strong inflows in the second quarter.

The statistical discrepancy (errors and omissions in recorded transactions) was a net outflow of $0.4 billion in the third quarter, in contrast to a net inflow of $8.5 billion in the second.

U.S. dollar in exchange markets

On a trade-weighted basis, the U.S. dollar depreciated 4 percent in the third quarter against both an index of the currencies of 10 industrial countries and a broader index of the currencies of 22 OECD countries and 4 newly industrialized countries in the Far East (table B, chart 3). The dollar reached its highest point in more than 2 years in early July, boosted in part by expectations of a strong U.S. economic recovery. Thereafter, it depreciated moderately throughout the quarter, except for a brief rise in mid-August due to an increase in the demand for dollars during the short-lived coup against the Government of the Soviet Union. The depreciation occurred as market participants grew increasingly skeptical about the strength of the recovery.

The impact of changes in interest-rate differentials between U.S. and key foreign rates varied among key currencies (chart 4). U.S. interest rates fell further during the quarter, reflecting both persistent weakness in the U.S. economy and moves by the Federal Reserve Board to lower the federal funds and discount rates. Concurrently, German monetary officials raised official interest rates to limit persistent inflation, thereby further widening the U.S.-German interest-rate differential in favor of marks. Depreciation against the Japanese yen was limited, as Japanese interest rates fell more rapidly than U.S. rates.

Current Account

Merchandise trade

The merchandise trade deficit increased to $20.5 billion in the third quarter from $15.4 billion in the second. The increase was more than accounted for by a jump in imports; exports increased only slightly.

Exports.--Exports increased $0.3 billion, or less than 1 percent, to $104.5 billion in the third quarter (table C). The volume of exports, measured in constant (1987) dollars, increased 1 percent.

Nonagricultural exports decreased $0.3 billion, or less than 1 percent, to $94.4 billion in the third quarter. Decreases in nonagricultural industrial supplies and materials and in capital goods were partly offset by an increase in automotive products. The decreases reflected a slackening in foreign demand resulting from a continued slowdown in economic activity in a number of industrial countries. Capital goods decreased also because of a drop in deliveries of civilian aircraft following an unusually high level of deliveries in the second quarter. Most of the increase in automotive products was in exports of passenger cars and trucks to Canada. Exports of engines and parts for assembly to Canada and Mexico also increased.

Agricultural exports increased $0.6 billion, or 6 percent, to $10.2 billion in the third quarter. Exports of corn and wheat more than accounted for the increase, as exports to Eastern Europe, Latin America, and developing countries in Asia and Africa picked up. Exports of soybeans and cotton decreased, reflecting ample supplies abroad. After a sharp drop in the second quarter, agricultural exports to Eastern Europe recovered, spurred in part by the issuance of new U.S. Government export credit guarantees at the end of June. (Guarantees extended at the beginning of the year boosted exports mostly in the first quarter.)

Imports.--Imports increased $5.4 billion, or 4 percent, to $125.0 billion in the third quarter. The volume of imports, measured in constant (1987) dollars, increased 6 percent. Nonpetroleum imports accounted for the increase; petroleum imports were virtually unchanged. In the first three quarters of 1991, imports in current dollars were 2 percent lower than in the same period of 1990, largely reflecting weakness in U.S. economic activity.

Nonpetroleum imports increased $5.3 billion, or 5 percent, to $112.0 billion in the third quarter. Imports of automotive products and consumer goods more than accounted for the increase. Automotive products, which increased $3.4 billion, or 17 percent, were boosted mainly by a step-up in imports of passenger cars from Japan, Canada, and Mexico; imports of engines and parts for assembly also increased. In the first three quarters of 1991, imports of passenger cars were only 2 percent higher than in the same period of 1990, reflecting continued weakness in U.S. sales of new passenger cars. Imports of consumer goods increased $2.6 billion. The largest increase was in textiles; there were smaller increases in toys, radios, televisions, and household appliances. Most of the increase in consumer goods was in imports from China and countries in the Far East, where production of inexpensive consumer goods has accelerated rapidly in recent years.

Petroleum imports increased $0.1 billion, or 1 percent, to $13.0 billion in the third quarter. The average number of barrels imported daily increased to 8.2 million from 8.1 million. The average price per barrel decreased to $17.24 from $17.31; an increase in crude petroleum prices was more than offset by a decrease in average prices of other petroleum products.

Balances by area.--The merchandise trade deficit with industrial countries increased $2.9 billion, to $9.4 billion, in the third quarter. The deficit with Japan increased $2.2 billion because of a step-up in imports. A drop in exports to Western Europe reduced the surplus with that area by $2.0 billion. The deficit with Canada decreased $0.7 billion, and the surplus with Australia increased $0.5 billion.

The deficit with members of OPEC decreased $0.3 billion; U.S. exports to OPEC countries increased more than imports.

The deficit with all other countries increased $2.6 billion; the increase was more than accounted for by a $3.4 billion increase in the combined deficit with China and with the newly industrialized countries in Asia. Partly offsetting was a $1.6 billion shift to a surplus with Latin America that mainly resulted from a jump in exports to Brazil and Mexico.

Service transactions

The surplus in service transactions increased $0.5 billion, to $9.5 billion, in the third quarter. Service receipts increased $1.0 billion, to $36.7 billion; payments increased $0.4 billion, to $27.3 billion.

Travel receipts increased $0.3 billion, to $11.6 billion, in the third quarter. Receipts from overseas visitors increased, but the increase was smaller than in the previous quarter, when travel receipts rebounded sharply after the end of the Persian Gulf hostilites. Receipts from Canada and Mexico also increased, especially in the U.S. border areas. Travel payments, at $9.9 billion, were virtually unchanged from the second quarter. After partially recovering in the second quarter from the effects of the Persian Gulf hostilities, overseas travel was unchanged in the third. Payments to Mexico and Canada were unchanged.

Passenger fare receipts were unchanged at $3.5 billion. Passenger fare payments increased $0.1 billion, to $2.4 billion.

Transportation receipts increased $0.3 billion, to $6.0 billion, in the third quarter. Transportation payments increased $0.4 billion, to $6.1 billion. Receipts and payments were boosted by expenditures for port services by air carriers, reflecting recent efforts by U.S. and foreign carriers to expand routes and freight services.

Receipts from other private services were unchanged at $8.7 billion in the third quarter, and payments increased $0.1 billion, to $3.7 billion.

Transfers under U.S. military sales contracts increased $0.2 billion, to $2.6 billion, in the third quarter. The increase was in deliveries to Western Europe and the Middle East. Direct defense expenditures abroad decreased $0.1 billion,to $3.8 billion.

Investment income

The surplus in net investment income increased $0.2 billion, to $2.5 billion, in the third quarter. Investment income receipts increased $0.5 billion, to $28.8 billion, and payments increased $0.4 billion, to $26.3 billion. For both receipts and payments, increases in direct investment income were largely offset by decreases in other private investment income. U.S. Government income receipts increased; payments were unchanged.

Direct investment income.--Receipts of income on U.S. direct investment abroad increased $1.2 billion, to $13.4 billion, in the third quarter. Income before capital gains and losses increased $0.6 billion. Almost all of the increase was in operating income of petroleum affiliates. Operating income of nonpetroleum affiliates was virtually unchanged; income of automotive affiliates in Western Europe was hurt by the slump in passenger car sales there. Capital gains increased $0.6 billion as a result of the sale of a British petroleum affiliate.

Payments of income on foreign direct investment in the United States shifted $1.5 billion from a net loss of $0.8 billion in the second quarter to net earnings of $0.7 billion in the third. A shift to capital gains accounted for most of the shift in income. Operating losses decreased $0.4 billion.

Portfolio investment income.--Receipts of income on other private investment abroad decreased $1.0 billion, to $13.3 billion, in the third quarter. Payments of income on othr private investment in the United States decreased $1.1 billion, to $15.9 billion. The decreases in both receipts and payments were mainly due to sharply lower short-term interest rates in the United States and abroad.

U.S. Government income receipts increased $0.3 billion, to $2.1 billion, in the third quarter. The increase was partly due to the forgiveness and rescheduling of interest owed to the U.S. Government by the governments of Poland, Egypt, and several developing countries. (Related entries appear in the unilateral transfers and U.S. Government capital accounts.) U.S. Government income payments were unchanged at $9.7 billion.

Unilateral transfers

Net unilateral transfers shifted to an outflow of $1.9 billion in the third quarter from an inflow of $7.1 billion in the second. The shift resulted mostly from a decrease, to $4.6 billion from $11.6 billion, in cash contributions received from coalition partners in Operation Desert Storm. In addition, grants to forgive $2.9 billion in outstanding debts were provided to several developing countries ($1.3 billion) and to Poland ($1.6 billion).

Capital Account

U.S. assets abroad

U.S. assets abroad increased $12.0 billion in the third quarter, compared with an increase of $15.0 billion in the second. An increase in U.S. private assets more than accounted for the third-quarter increase.

U.S. official reserve assets.--U.S. official reserve assets decreased $3.9 billion in the third quarter, following a decrease of $1.0 billion in the second. The third-quarter decrease was largely due to off-market sales of foreign currencies to foreign monetary authorities.

U.S. Government assets other than official reserve assets.--U.S. Government credits and other long-term assets increased $8.2 billion in the third quarter, compared with an increase of $1.1 billion in the second. The higher disbursements of credits were associated with the rescheduling of $2.1 billion of Polish debt and $5.1 billion of Egyptian debt. Repayments on credits were $11.0 billion, compared with $0.8 billion. The higher repayments included $1.3 billion in debt forgiveness to developing countries, $1.6 billion in debt forgiveness to Poland, and the rescheduling of Polish and Egyptian debt.

Claims reported by banks.--U.S. claims on foreigners reported by U.S. banks increaseed $0.2 billion in the third quarter, in contrast to a decrease of $1.2 billio in the second. An increase in claims payable in foreign currencies was nearly offset by a decrease in claims payable in dollars.

Banks' own claims payable in dollars decreased $4.2 billion. The decrease reflected weak interbank demand for dollars stemming partly from the slackening in economic activity abroad. Interbank claims of foreign-owned banks decreased $7.7 billion; the decrease was mainly in claims on their own foreign offices in Canada, Japan, and Asian banking centers. Interbank claims of U.S.-owned banks increased $4.9 billion; an increase in claims to meet the end-of-quarter needs of U.S. banks' own foreign offices, mainly in the United Kingdom and the Caribbean, more than offset other decreases during most of the quarter. A decrease in claims on foreign public borrowers in Latin America was due to the transfer of some loans to the books of U.S. banks' foreign offices.

Banks' own claims payable in foreign currencies increased $5.1 billion in the third quarter, as banks stepped up lending in foreign currencies. Most of the increase was in claims on Canada and Japan.

Banks' domestic customers' claims decreased $0.7 billion. U.S. money market funds shifted funds from abroad to the United States, as interest rates on U.S. Treasury securities fell less rapidly than rates on overseas short-term instruments.

Foreign securities.--Net U.S. purchases of foreign securities were $12.5 billion in the third quarter, only slightly below the second-quarter record of $12.8 billion. In the first three quarters of 1991, net purchases of foreign securities totaled a record $34.8 billion.

Net U.S. purchases of foreign stocks decreased $0.6 billion, to $8.5 billion. Despite the decrease, the high level of net purchases reflected continued strong demand for foreign stocks. Net purchases of both British and Japanese stocks picked up sharply. Transactions in Canadian stocks shifted to net purchases following several consecutive quarters of net sales. Although net purchases of Latin American stocks decreased, they remained substantial, reflecting U.S. interest in offerings resulting from the continued privatization of Latin American companies, especially in Mexico

Net purchases of foreign bonds increased $0.3 billion, to $4.0 billion. Transactions in outstanding bonds shifted to net purchases of $2.7 billion from net sales of $1.5 billion. Net purchases of British gilt-edged securities more than accounted for the shift; declining interest rates encouraged some investors to lock in current yields, and others were spurred by prospects of capital gains from rising bond prices and the appreciation of the British pound against the dollar. Foreign new issues in the United States decreased to $2.5 billion from $6.4 billion.

Direct investment.--Net outflows for U.S. direct investment abroad were $5.9 billion in the third quarter, compared with $1.8 billion in the second. The increase was largely accounted for by a shift of $2.6 billion in equity to net outflows of $2.2 billion, mainly for acquisitions in Western Europe and Mexico.

Intercompany debt inflows were nearly unchanged at $3.4 billion. However, there were large offsetting changes in receivables and payables between parents and affiliates. Some parent companies received large loan repayments from their foreign affiliates, and others repaid loans to their affiliates.

Reinvested earnings increased to $7.0 billion from $5.6 billion.

Foreign assets in the United States

Foreign assets in the United States increased $22.8 billion in the third quarter, compared with an increase of $3.5 billion in the second. Both foreign official assets and ther foreign assets increased.

Foreign official assets.--Foreign official assets in the United States increased $4.3 billion, in contrast to a decrease of $3.1 billion (table D). Assets of developing countries other than OPEC members increased $8.2 billion. Assets of OPEC members decreased $4.3 billion. Assets of industrial countries increased $0.4 billion.

Liabilities reported by banks.--U.S. liabilities reported by U.S. banks, excluding U.S. Treasury securities, increased $8.8 billion in the third quarter, in contrast to a decrease of $28.7 billion in the second. Banks' own liabilities payable in dollars shifted to a net increase, but the increase was restrained by continued slack U.S. demand for loans.

Liabilities of foreign-owned banks increased $8.4 billion, reflecting a temporary resumption in borrowing from overseas sources in the latter part of the quarter. In the first two quarters and during part of the third quarter, liabilities of foreign-owned banks were sharply reduced, as those banks borrowed from U.S. sources. Foreign-owned banks' reliance on large U.S. time deposits for funding during most of the first three quarters was encouraged by the Federal Reserve Board's ruling, effective December 27, 1990, that eliminated reserve requirements on domestic nonpersonal time deposits. Short-term borrowing from foreign banks was resumed in the third quarter to fund a brief increase in lending to the overseas interbank market and to substitute temporarily for funding from U.S. sources. Dollar liabilities of U.S.-owned banks decreased $2.4 billion, reflecting the decrease in U.S. loan demand.

Liabilities payable in foreign currencies increased $4.1 billion, mainly to

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fund an increase in foreign currency claims.

Banks' custody liabilities decreased $1.4 billion.

U.S. Treasury securities.--Foreign transactions in U.S. Treasury securities shifted to net sales of $1.4 billion from net purchases of $13.4 billion. The shift was mostly due to a slowdown from unusually large second-quarter net purchases by international investment funds located in the Caribbean.

Other U.S. securities.--Net foreign purchases of U.S. securities other than U.S. Treasury securities were $9.7 billion in the third quarter, down from $15.1 billion in the second. Depreciation of the dollar and weakness in U.S. economic activity depressed foreign purchases of U.S. stocks.

Net foreign purchases of U.S. stocks decreased to $2.0 billion from $7.4 billion, despite a strengthening in U.S. stock prices during the third quarter. Some investors may have switched investments to the British and French stock markets, where price increases outpaced those in the U.S. market.

Net foreign purchases of U.S. bonds were unchanged at $7.7 billion. A $3.9 billion decrease in new issues sold abroad by U.S. corporations was offset by a $2.3 billion increase in net purchases of U.S. agency bonds, mainly by Japan, and a $1.7 billion decrease in net sales of outstanding U.S bonds.

Direct investment.--Net inflows for foreign direct investment in the United States decreased to $1.4 billion in the third quarter from $7.5 billion in the second. In the first three quarters of 1991, net inflows were $13.3 billion, compared with $32.7 billion in the first three quarters of 1990. Much of the decrease has been in investment by Japan.

Net inflows for intercompany debt decreased to $0.3 billion in the third quarter from $6.6 billion in the second; several U.S. finance affiliates extended loans to parent companies in Western Europe in the third quarter. Net equity inflows decreased to $4.1 billion from $5.5 billion; third-quarter inflows included a large acquisition in manufacturing by Western Europe and sizable contributions to affiliates in "other" industries.

Reinvested earnings increased to -$3.0 billion from -$4.5 billion.

Reconciliation of the

U.S.-Canadian

Current-Account Statistics

A reconciliation of the 1990 bilateral current-account statistics of the United States and Canada and a revision of the 1989 current-account reconciliation were completed by BEA and Statistics Canada in November 1991. The results are shown in table E.

The completion of the reconciliations continues the long history of cooperation between U.S. and Canadian statistical agencies. In 1990, over three-fourths of the data used by the United States and Canada to compile U.S.-Canadian bilateral current-account statistics was provided through the exchange of data, including U.S.and Canadian merchandise imports (beginning January 1990); services such as travel, passenger fares, inland freight, and government nonmilitary expenditures; and certain U.S. banking data used to estimate Canadian interest receipts.

For 1989, the difference between the latest U.S. and Canadian published estimates of the U.S.-Canadian current-account balance was $2.9 billion; after reconciliation, the difference was $0.4 billion. For 1990, the difference between the published estimates was $3.5 billion; after reconciliation, the difference was $0.4 billion. For both years, the largest reconciliation adjustments were made to investment income. A few differences, mainly in some investment income and service transactions, could not be satisfactorily reconciled because of differences in U.S. and Canadian source data.

Revisions based on the reconciliation will be incorporated, as far as possible, into the U.S. international transactions estimates to be published in June 1992. A full substitution of the reconciled estimates for the previously published estimates is not possible, because of methodological and definitional differences and because the estimates of transactions with third countries would be affected.

The adjustments made to each country's data fall into three categories--statistical, definitional, and methodological. (2) There are three broad types of statistical adjustments. First, some reconciliation adjustments are based on knowledge about the quality and coverage of source data. When one country's source data are known to be superior to the other country's source data, preference for the reconciled value is given to the superior source data. Second, some types of reconciliation adjustments are made

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because the detailed data needed to make two estimates comparable may be available from one country but not from the other. In this case, adjustments are based on the detailed data that are available. Third, many adjustments are based essentially on pragmatic factors. When no means of clearly establishing the superiority of one country's data are available, reconciled values reflect compromises by the compilers, particularly when the compromise is within a reasonable range of error in measurement. Most statistical reconciliation adjustments fall into the second and third types.

In addition to statistical adjustments, definitional and methodological adjustments are made to the published estimates. Some definitional and methodological differences arise because of domestic requirements in each country to integrate the external accounts with domestic-sector accounts. In other instances, there are differences of opinion between U.S. and Canadian compilers as to which definition or methodology is correct or preferable. (3) Among definitional differences, the United States includes reinvested earnings as a component of direct investment income, whereas Canada does not, and Canada records some service transactions on a gross basis, whereas the United States records them on a net basis. To achieve reconciliation of definitional differences, a common definition must be selected; either country's definition may be selected as the basis for comparison, assuming that the data to make the definitional adjustments are available. Among methodological differences, one country may classify one group of transactions in an account different from that of the other country. To achieve reconciliation, these transactions must be reclassified to a common account.

The following sections present a brief discussion of some of the major types of reconciliation adjustments made to the accounts to achieve the results shown in table E. Although numerous adjustments are made, only the major ones, either because of important conceptual differences or because of the size of the adjustment, are mentioned here. Some methodological adjustments, such as reclassification and netting adjustments, are necessary to achieve common treatment, but because they are offsetting, they do not affect the reconciled current-account balance. Some definitional adjustments--such as the exclusion of reinvested earnings and of capital gains and losses--do affect the reconciled balance, as do most of the statistical adjustments.

Merchandise trade.--Most of the differences between published U.S. and Canadian estimates of merchandise trade stem from different treatment of certain aspects of merchandise trade in the U.S. and Canadian balance-of-payments accounts. (4) For reconciliation, the main task is resolving those differences in treatment; there are three major adjustments. First, inland freight is reclassifed from U.S. merchandise exports to the inland freight account to be consistent with the Canadian accounts. Second, Canadian reexports are added to U.S. merchandise imports. In the U.S. published estimates, which are on a country-of-origin basis, these imports (Canadian reexports) are attributed to third countries rather than to Canada, which is the country of shipment. Third, valuation differences are excluded from Canadian estimates of exports of petroleum to the United States. Canada uses information from Canadian producers; the United States uses values reported on U.S. customs documents.

Services.--In the service accounts, the reconciliation adjustments are made mainly to the Canadian published estimates. First, withholding taxes are removed to reconcile with the U.S. estimates, which are published exclusive of withholding taxes. Second, transactions between affiliated U.S. and Canadian companies are changed from a gross basis to a net basis to reconcile with the U.S. treatment. Finally, transactions related to expenditures in port by airline and railroad operators are reclassified from the Canadian published estimates of business services to the transportation account.

The U.S. published estimates of service receipts are increased to include certain intercompany charges between U.S. parents and Canadian affiliates that are not included in the underlying U.S. data but that are included in the Canadian estimates.

The remaining differences in the reconciled service estimates is related to transactions of insurance companies--premiums and casualty losses. These transactions cannot be reconciled, because of basic differences in data collection methods for this industry between the United States and Canada.

Investment income.--To reconcile investment income, a number of adjustments are made both to the U.S. and Canadian published estimates. In direct investment income, the U.S. estimates are adjusted to exclude reinvested earnings and capital gains and losses. The Canadian estimates are adjusted to exclude withholding taxes. Adjustments are made, as necessary, to reallocate income payments on direct investment in the United States and Canada that were made through holding companies in third countries. Differences that could not be reconciled were due mainly to timing differences in recording of dividend payments and to the problems--arising from differences in U.S. and Canadian source data--with reconciling transactions of affiliates in the insurance industry.

In other private investment income (portfolio), the Canadian published estimates are adjusted to exclude withholding taxes. Most of the other reconciliation adjustments are made to compensate for differences in source data. For example, U.S. published estimates for receipts of income from Canadian banks are increased because U.S. estimates of claims (deposits) of U.S. nonbank residents on Canadian banks are underestimated. (Plans are under way to resolve this problem.) The underestimation of claims leads to an understatement of U.S. income receipts from Canada. The Canadian published estimates, which are based on more complete coverage, are used for reconciliation. In another example, receipts and payments of income between U.S. and Canadian affiliated banks are netted. The Canadian published estimates of receipts and payments substantially exceed the U.S. estimates on a gross basis. On a net basis, the estimates are almost identical. The reason for the pattern of biases in the gross estimates, while unclear, may be differences in reporting definitions.

Transfers.--U.S. estimates are published on a net basis--transfers to Canada less transfers to the United States. For reconciliation, gross estimates are used, after making some adjustments for coverage. Canadian published estimates are on a gross basis. The main adjustment to the Canadian estimates is the exclusion of withholding taxes.

Current-account reconciliations for 1970-88 were published in the following issues of the SURVEY Of CURRENT BUSINESS: June 1975, September 1976 and 1977, December 1979, June 1981, and December 1981 through 1990.

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(1) The analysis in this article is based on seasonally adjusted estimates of the components of the current and capital accounts. The accompanying tables present both adjusted and unadjusted estimates.

(2) The fact that a reconciled value is agreed upon after statistical adjustments does not necessarily indicate that the value is accurate or that there is no need for improvements to the source data. Also, choice of one country's definitions or methodology over the other's in developing reconciliation adjustments does not indicate agreement on what the correct definitions should be or on the most appropriate methodology.

(3) Recent efforts by international organizations to develop harmonized guidelines for domestic-sector and external accounts will provide guidance in future in resolving some differences. For example, the revisions of the United Nations' System of National Accounts and the International Monetary Fund's Balance of Payments Manual will include harmonized treatment of external and domestic-sector accounts. In addition, the revised Balance of Payments Manual will provide guidance in resolving some of the other differences between the United States and Canada in the compilation of foreign-sector accounts.

(4) The source data are the same for both countries, except for Canada's source data for petroleum exports. The data, except as noted, are compiled from U.S. and Canadian customs documents filed by U.S. and Canadian importers. U.S. merchandise imports are compiled from U.S. customs documents, and U.S. exports (Canadian imports) are compiled from data provided by Canada from Canadian import documents. Similarly, Canadian merchandise imports are compiled from Canadian customs documents, and Canadian exports (U.S. imports) are compiled from data provided by the United States from U.S. customs documents.