WITS (TRAINS) Methodology Query
Alonso Gonzalez
Hi WITS Forum team,
Hope this email finds you well.
I am currently examining the methodology used by WITS (TRAINS) when aggregating tariff data (through simple average and trade-weighted average methods) and calculating AVEs, in order to get a better understanding of the process. I was hoping you could provide some clarity on a couple of questions I have on this matter.
Namely, I would be interested in knowing:
On tariff data aggregation
(1) When calculating the trade weighted average of a tariff between two countries for a commodity (e.g. tea between Canada and India), trade weight is it based on the bilateral trade of these two countries (i.e. imports to Canada from India) or do you use the imports from the world and the respective country to get a trade-weighted average?
(1.1) Same as above but how is the trade weighted average of a tariff calculated when you are comparing a country vs the World or a pre-defined country group (e.g. tea between Canada and the World)?
(2) When aggregating data through a trade-weighted average, is the import data based on tariff line import data or on HS 6-digit import data?
(3) I was looking at the MFN tariff of HS6 090210 with the US as reporter and Canada as a partner for 2020 and I notice there is no difference between the simple averages and the weighted average (3.20), what is the reason behind this?
Also, when I download the data another time, I got different results with the simple tariff line average being double the simple average (6.40 vs 3.20), shouldn't they be the same at the HS6 level?
On the AVE process
(1) Is the information on the AVE calculation methods available on the WITS guide up to date? I understand from the guide one can select UNCTAD method 1 or 2 but at the moment of submitting a query one can only select UNCTAD method only.
(2) Are the Unit Values used to calculate AVEs based on import data at the tariff line level or HS6 level? And do these correspond to the import data between the two countries queried (e.g. Canada and India) or do you use world import data (e.g. Canada and the World)?
(3) UNCTAD method 2 says it used data from OECD countries. Why OECD countries? When looking at certain commodities, OECD countries do not have a lot of trade in these. Does WITS (TRAINS) still use OECD country data?
I would appreciate any information you would have on these points.
Kind regards,
Alonso Gonzalez
Samuel Munyaneza
Dear Alonso,
My answers are highlighted in red below.
Best
Sam
From: 'Alonso Gonzalez' via witsforum <wits...@googlegroups.com>
Sent: Friday, July 29, 2022 6:07 PM
To: witsforum <wits...@googlegroups.com>
Subject: WITS (TRAINS) Methodology Query
Hi WITS Forum team,
Hope this email finds you well.
I am currently examining the methodology used by WITS (TRAINS) when aggregating tariff data (through simple average and trade-weighted average methods) and calculating AVEs, in order to get a better understanding of the process. I was hoping you could provide some clarity on a couple of questions I have on this matter.
Namely, I would be interested in knowing:
On tariff data aggregation
(1) When calculating the trade weighted average of a tariff between two countries for a commodity (e.g. tea between Canada and India), trade weight is it based on the bilateral trade of these two countries (i.e. imports to Canada from India) or do you use the imports from the world and the respective country to get a trade-weighted average?
Canada trade weighted tariff average on imports from India is calculated using the value of Canada’s imports from India
(1.1) Same as above but how is the trade weighted average of a tariff calculated when you are comparing a country vs the World or a pre-defined country group (e.g. tea between Canada and the World)?
Canada trade weighted tariff average on imports from a group of countries or World is calculated using the value of Canada’s total imports from that group of countries.
(2) When aggregating data through a trade-weighted average, is the import data based on tariff line import data or on HS 6-digit import data?
It’s based on HS 6-digits import data. It would have been better to use tariff line import data but these data are not available.
(3) I was looking at the MFN tariff of HS6 090210 with the US as reporter and Canada as a partner for 2020 and I notice there is no difference between the simple averages and the weighted average (3.20), what is the reason behind this?
At 6 digits the average tariff is not trade weighted (for lack of trade data at the national tariff line level)
Also, when I download the data another time, I got different results with the simple tariff line average being double the simple average (6.40 vs 3.20), shouldn't they be the same at the HS6 level?
They should be the same
On the AVE process
(1) Is the information on the AVE calculation methods available on the WITS guide up to date? I understand from the guide one can select UNCTAD method 1 or 2 but at the moment of submitting a query one can only select UNCTAD method only.
There is only one method now
(2) Are the Unit Values used to calculate AVEs based on import data at the tariff line level or HS6 level? And do these correspond to the import data between the two countries queried (e.g. Canada and India) or do you use world import data (e.g. Canada and the World)?
We use 3-year average import unit values from COMTRADE, at HS 6-digit level, for a cluster group of reporters (major trading countries mostly OECD countries) and world as a partner. We filter out values less than $2,500.
(3) UNCTAD method 2 says it used data from OECD countries. Why OECD countries? When looking at certain commodities, OECD countries do not have a lot of trade in these. Does WITS (TRAINS) still use OECD country data?
I would appreciate any information you would have on these points.
Kind regards,
Alonso Gonzalez
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Alonso Gonzalez
Samuel Munyaneza
Hello,
AVEs are computed every time we receive new tariff data usually every year.
To view this discussion on the web visit https://groups.google.com/d/msgid/witsforum/f4247a93-ac55-49e7-b15e-a32e5f5f466cn%40googlegroups.com.