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September 13, 2006
July trade in intangibles
According to yesterday's BEA trade data, our trade surplus in intangibles was basically unchanged in July, increasing by only $54 million to $7.98 billion. Revised data shows that the surplus in June declined by almost $300 billion after reaching a record $8.23 billion in May. In general, however, the latest revisions show a slightly higher monthly surplus during the first half of the year than reported earlier.
The deficit in Advanced Technology Products dramatically worsened in July, rising by $2.1 billion to a deficit of $4.6 billion. The increase in the deficit was due almost exclusively to a decline in exports in aerospace, information & communication technology, 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 September 13, 2006 11:01 AM
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