Reconciliation of the U.S.-Canadian Current Account, 1996 and 1997

Survey of Current Business, Nov, 1998 by Anthony J. DiLullo, Hugh Henderson

ON THE reconciled basis, the U.S.-Canadian current account shows a larger U.S. deficit, or Canadian surplus, than on the U.S.-published basis for both 1996 and 1997. Compared with the Canadian published estimates, however, the reconciled current account shows a smaller U.S. deficit, or Canadian surplus. The U.S.-published current-account balance with Canada is a U.S. deficit of $7.0 billion for 1996 and a U.S. deficit of $0.8 billion for 1997.(1) The corresponding Canadian-published balance is a Canadian surplus (U.S. deficit) of $13.9 billion for 1996 and a Canadian surplus of $6.7 billion for 1997. On the reconciled basis, the U.S. deficit, or Canadian surplus, is $12.9 billion for 1996 and $4.4 billion for 1997 (chart 1, table 1).(2)

[Chart 1 OMITTED]

Table 1.--Major U.S.-Canadian Balances
[Billions of U.S. dollars]

                                   Published
                                   estimates

                               United
                               States   Canada

            1996
  Goods                         -24.2     30.9
  Services                        7.1     -5.9
  Investment income              10.4    -12.5

Goods, services, and income      -6.6     12.5
  Unilateral transfers, net       -.3      1.4

Current account                  -7.0     13.9

            1997
  Goods                         -19.0     23.5
  Services                        6.4     -4.5
  Investment income              12.2    -13.8

Goods, services, and income       -.4      5.2
  Unilateral transfers, net       -.4      1.5

Current account                   -.8      6.7

                                   Reconciled
                                   estimates

                               United   Canada
                               States

            1996

  Goods                         -31.7     31.7
  Services                        6.6     -6.1
  Investment income              12.6    -12.6

Goods, services, and income     -12.5     12.5
  Unilateral transfers, net       -.4       .4
Current account                 -12.9     12.9

            1997
  Goods                         -25.3     25.3
  Services                        5.9     -5.9
  Investment income              15.5    -15.5

Goods, services, and income      -4.0      4.0
  Unilateral transfers, net       0.4      -.4

Current account                  -4.4      4.4

NOTE.--A U.S. surplus ( ) is a Canadian deficit (-), and a Canadian surplus ( ) is a U.S. deficit (-). Details may not add to totals because of rounding.

This article presents the results of the reconciliation of the bilateral current-account estimates of Canada and the United States for 1996 and 1997.(3) The details of the current-account reconciliation for 1996 and 1997 are presented in the tables that follow this article. Tables 2.1 and 2.2 show the major types of reconciliation adjustments--definitional, methodological, and statistical--that were made to the major current-account components. Tables 3.1 and 3.2 present the published estimates, the reconciled estimates, and the amounts of the adjustments for each major component. Tables 4-8 present the reconciliation details for each current-account component.(4)