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1993 SNA Update Information - AEG recommendations for issue:
Merchanting

Issue description
Issue description in [English] | [French] | [Russian] | [Spanish]
Merchanting is defined in the Balance of Payments Manual as the purchase of a good by a resident (of the compiling economy) from a nonresident and the subsequent resale of the good to another nonresident, without the good entering the merchant’s economy. The SNA does not cover the topic. The existing definition of merchanting may capture activity that is part of the production process in an increasingly globalized and inter-connected world, which is not the intent behind the definition of merchanting activity. Therefore, there is a need for a clear and precise definition of merchanting; arising out of this there needs to be clear guidance on whether merchanting (when redefined) should be recorded on a net or a gross basis and under goods or services.
AEG recommendations
Number of AEG recommendations for selected issue:1
  Corresponding meetingDate postedRecommendation
 Jan-Feb 200607/04/2006(a)-(g) The AEG agreed that all three types of merchanting (global manufacturing, global wholesaling/retailing, and commodity dealing that is settled by trade in commodities) should be recorded as follows:
“The acquisition of goods is recorded as an import (shown as a negative export) by the global manufacturer, global wholesaler/retailer or commodity dealer (merchant). The subsequent resale of the goods is recorded as exports by the merchant. The difference between the two is shown as net exports of goods by the merchant. The merchant's output is recorded as a wholesale/retail service within the national accounts, exclusive of holding gains/losses while the goods are held (in inventory) by the merchant.”
The inclusion of the wholesale/retail margin and the holding gains/losses accruing while in inventory in the gross value of exports by the merchant is consistent with the measurement of supply and use of these margins in the SNA and the BPM.
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