We invite you to read the new article on Ideas de Peso, a blog where economists working at the BCRA share their opinions:
Special import regimes have long been common in foreign trade. These regimes allow for the import of input deferring or holding off the payment of tariffs until goods are later exported, in order to strengthen the countries’ international inclusion and soften the anti-exporting bias of tariff protection. However, this information is not much used in the analysis of business policy even when, at times, it may change exports’ aggregate value estimates. In turn, export companies may get their input differently to those companies which direct their production to the domestic market. Indeed, the potential effect of real exchange rate variations over the balance of industries’ export may be related to the share of imported goods. This way, those sectors which exports depend more on imported input would have a less sensitive export potential to real exchange rate changes.
The information that companies manage allows for the identification of such sectors by directly linking imported input with exported products. Thus, it is possible to improve the knowledge of exporters’ provision structure, aggregate value estimates, supply sources and input/product ratios. In this first approach for Argentina, we have analyzed the reports of imports and exports transactions from 2011 to 2016. This analysis enables comparing the evolution of exports based on imported inputs in periods with different regimes for imports administration, including the validity period of Advance Imports Affidavits and, as from 2015, the most recent Imports Monitoring Comprehensive System.
The database contains information on imports and exports from 2011 to 2016. Data has been classified according to the type of Customs sub system. Exports are divided into: (i) those following temporary import regimes; (ii) those following the in-factory customs regime (RAF); (iii) those falling outside both regimes; and (iv) those following temporary import regimes involving outflows not considered to be exports. In turn, imports are classified into: (i) temporary imports; (ii) imports as under RAF; (iii) imports as under RAF which are ultimately allocated to domestic consumption; (IV) imports allocated to consumption; and (v) the remaining inflows not considered to be imports. The analysis below links the exports reported by companies with the imports carried out on the same year. It is assumed that the company makes use of a sole production matrix so that production technical ratios and the aggregate value are the same for all their products. Chart 1 summarizes exports and imports data according to the regime used for the term analyzed.
August 22nd, 2018