« Taxing creative works II | Main | Ebay patent ruling »
May 12, 2006
March trade in intangibles
This morning's BEA trade data confirmed what we had suspected: last month's downturn in our intangibles trade surplus was a one time fluke. After declining to $6.5 billion in February, the intangibles trade surplus return to its normal level of $7.2 billion.
(As noted last month, the February decline may have be due to a one-time royalty payment to China for the Olympic broadcast rights).
That is the good news. The not so good news is that the intangibles surplus is holding basically constant - still below its peak of almost $7.5 billion in December 2004.
The other good news is that the overall trade deficit declined in March by 5.6% to $62 billion as imports declined and export grew. According to the Wall Street Journal "Trade Deficit Narrowed To $62 Billion in March":
U.S. exports increased by 1.9% to a record $114.66 billion in March from $112.52 billion in February.
Exports increased by $510 million for capital goods, including industrial machines and computer accessories. Exports rose by $181 million for consumer goods, like diamonds and toys. Sales of industrial materials like fuel oil were up $1.25 billion. Exports of foods and beverages increased by $213 million. Foreign sales of autos and parts fell $377 million.
Imports fell by 0.8% to $176.66 billion.
Consumer goods imports -- including pharmaceutical preparations -- climbed by $884 million, and imports of capital goods like computers increased by $1.5 billion. But purchases of cars and parts made abroad tumbled $751 million. Purchases of industrial materials from overseas shrank by $3.3 billion.
But the not so good news was that the deficit in Advanced Technology Products increase in March to $2.5 billion after declining significantly in February. A surge in export of aerospace and electronics was more than offset by an increase in imports in information & communications and life sciences.
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 May 12, 2006 8:42 AM
Trackback Pings
TrackBack URL for this entry:
http://www.athenaalliance.org/mt/mt-tb.cgi/712