Economic territory and resident economic units

Economic territory is the geographic area under the administration of government, within which people, goods and capital circulate freely. Its delimitation follows the prescriptions of the Manual of balance of payments regarding its extension to the air-space and territorial waters, inclusion of territorial enclaves, and treatment of areas under customs control. The economic territory of French national accounts includes overseas departments (including Mayotte).

An institutional unit is resident of the French economy if it has there a center of economic interest, i.e. if it owns on the French economic territory a location where it is engaged in economic activities and transactions on a significant scale for a significant period. Operational criteria precise the application of this definition to different types of units.

The territorial correction for exports corresponds to the value of goods and services consumed on the territory by non residents (i.e. foreign tourists in France). The territorial correction on imports corresponds to the value of goods and services consumed abroad by residents (i.e. French tourists abroad).

Exports and imports of goods and services

Generally, exports (P6) and imports (P7) consist of transactions in goods and services between resident units and non-resident units. Exports/imports of goods correspond to the change of property of goods between residents and non-residents: their measure is correctly approached when effective crossing of customs borders. However, there are exceptions to the principle of change of property: goods under a leasing contract, goods circulating between affiliated entreprises without change of ownership. There are also examples of movements of goods recorded in foreign trade without the goods crossing the country's frontier (sales of oil products from a unit operating in international waters, merchanting, etc.); reciprocally, goods may cross the frontier witout being recorded in foreign trade (goods in transit, goods sent (or received from) abroad for a process to order, for example).

International transactions on services differ from transactions on goods. Goods may be sent far away from their production location, and their trading involves transportation charges which may, or not, be included in their valuation. On the contrary, services are directly provided to the purchaser by the producer, when they are produced.

Valuation of exports and imports of goods and services

Exports and imports of goods must be valued "free on board" (FOB) at the exporting country's frontier. The FOB value includes the goods' value and the value of the associated delivering services (transportation and insurance) to that place: it is the acquisition price at which the good should be paid by an importer who would receive the good at this place, before paying any tax on products. It is also by referring to the FOB place that the frontier is implicitely determined for foreign exchanges of goods or services: transportation charges to the exporting country's frontier are part of the value of the imported/exported goods, but transportation charges from the frontier of the exporting country to the importing country's frontier are imports of services if the transportation is performed by a non-resident agent.

The FOB/FOB valuation of trade of goods is also the one used in the Balance of payments. This valuation ensures the consistency of the trade of goods' measure at the international level.

Detailing foreign trade in resources-uses balances and in input-output table (I-OT)

In customs statistics, exports of goods are valued at FOB price, but detailed imports of goods are valued at "cost-insurance-freight" price (CIF), i.e. at the entry point on the French territory: the difference with the FOB price represents costs of delivery of the goods from the exporter country's frontier to the French frontier. This difference mainly includes transportation costs and, subsidiarly, insurance costs. In the resources-uses balances of goods, which are recorded in the input-output table (I-OT), imports by products are thus valued CIF.

A correction is made in the I-OT so that total of imports of goods be measured at FOB price. This correction, equal to transportation and insurance costs from the FOB point to the CIF point, is included by adding a line and a column in the table of resources in products. On the supplementary line, the CIF-FOB correction is introduced, negatively, in the imports column so that the total of imports of goods is measured at the FOB price. In the supplementary column, the correction is also introduced, negatively, on the lines related to involved services (transport, insurance); these services are not effectively provided to users but already included in the CIF value of imported goods, thus their value must be subtracted from the total offer of these services. Their value is recorded on the CIF/FOB adjustment line, at the crossing with the CIF/FOB column, which allows the annulation of the column's total and the line's total.

Territorial correction

Methods used to realize resources-uses balances by products allows the calculation of the final consumption on the economic territory (or domectic consumption) which includes not only a share of the final consumption expenditure of resident households, but also the final consumption expenditure - and the intermediate consumption - of non-residents on the economic territory. It does not include the final consumption expenditure of households residents of the rest of the world.

The knowledge of imports and exports of touristic services provides the calculation of the territorial correction: it is equal to the opposite of the balance of exchanges of touristic services. Final consumption expenditure of resident households is obtained by adding the territorial correction to the domestic consumption.