Current-Account Asymmetries in U.S.–EU Statistics

The United States and the European Union are the foremost trading partners in the world, with total bilateral current-account transactions exceeding $1.8 trillion in 2017, as reported by the U.S. Bureau of Economic Analysis (BEA) and the Statistical Office of the European Union (Eurostat). In 2017, the 28 Member States of the European Union accounted for more than 26 percent of U.S. current-account transactions, while the United States accounted for more than 23 percent of EU current-account transactions with countries outside the EU (extra–EU). The current account, a major component of a country’s balance of payments accounts, shows economic transactions of an economy with the rest of the world and provides valuable information about how economies are intertwined globally. Persistent bilateral asymmetries—differences in the statistics reported by the United States and the EU Member States—have led to questions about the interpretation of the statistics by data users. A reduction in these asymmetries would be a major step towards increasing confidence in the statistics. This paper presents an overview of findings on asymmetries in current-account statistics for the EU and individual Member States as reported by Eurostat, and for the United States as reported by BEA. A quantitative analysis of the largest asymmetries in these accounts is accompanied by a discussion of the different concepts and methods underlying the EU and U.S. statistics that help explain the causes of these asymmetries. Current-account transactions are compiled and presented in the balance of payments framework based on conceptual and presentational guidelines promulgated by the International Monetary Fund (IMF) in Balance of Payments and International Investment Position Manual, 6th edition (hereafter cited as “BPM6”). Standard presentations of the statistics recommended in BPM6 facilitate comparisons of the current-account statistics published by different countries. This paper focuses on the components with the largest asymmetries, trade in services and cross-border primary income flows, about which there is little documentation in international literature as to the underlying reasons for the asymmetries. The analysis of asymmetries is based on a comparison of the values reported by two countries for the same set of bilateral trade transactions.