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September 13, 2005
July trade in intangibles
According to our calculations based on data released this morning by the BEA, the surplus in our balance of trade in intangibles decline slightly in July to a positive $6.53 billion. Imports of intangibles continued to increase faster than exports. Our surplus in intangible trade has now declined every month in 2005.
In earlier posting, I had been reporting that the intangibles trade balance was holding steady. However, services exports and imports for January through June 2005 were significantly revised "to reflect the incorporation of more comprehensive and revised quarterly and monthly data." This revision has had a significant impact on the month to month changes reported in previous postings - which are no longer correct. The newly revised data shows a steady decline this year.
The overall trade deficit decreased in July due most to a $1.1 billion decline in imports.
The deficit in Advanced Technology Products rose significantly in July to $4.2 billion (from a deficit of $3.7 billion in June) as exports rose much greater that the increase in imports. The last monthly surplus in this category was in June 2002 and the last sustained series of monthly surpluses were in the first half of 2001.
Note: we define trade in intangibles as the sum of "royalties and license fees" and "other private services". The BEA/Census Bureau definitions of those categories are as follows:
Royalties and License Fees - Transactions with foreign residents involving intangible assets and proprietary rights, such as the use of patents, techniques, processes, formulas, designs, know-how, trademarks, copyrights, franchises, and manufacturing rights. The term "royalties" generally refers to payments for the utilization of copyrights or trademarks, and the term "license fees" generally refers to payments for the use of patents or industrial processes.
Other Private Services - Transactions with affiliated foreigners, for which no identification by type is available, and of transactions with unaffiliated foreigners. (The term "affiliated" refers to a direct investment relationship, which exists when a U.S. person has ownership or control, directly or indirectly, of 10 percent or more of a foreign business enterprise's voting securities or the equivalent, or when a foreign person has a similar interest in a U.S. enterprise.) Transactions with unaffiliated foreigners consist of education services; financial services (includes commissions and other transactions fees associated with the purchase and sale of securities and noninterest income of banks, and excludes investment income); insurance services; telecommunications services (includes transmission services and value-added services); and business, professional, and technical services. Included in the last group are advertising services; computer and data processing services; database and other information services; research, development, and testing services; management, consulting, and public relations services; legal services; construction, engineering, architectural, and mining services; industrial engineering services; installation, maintenance, and repair of equipment; and other services, including medical services and film and tape rentals.
Posted by Ken Jarboe at September 13, 2005 9:53 AM
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