Regional Arrangements

5

Th is appendix describes various regional arrangements
for monetary and economic cooperation and the impli-
cations of these arrangements for government fi nance
statistics.

Introduction.

A5.1 Th is appendix addresses the main issues for
GFS that arise from regional arrangements. Regional
arrangements involve coordination of institutional
units in several countries for a particular monetary
or economic purpose. Th ese arrangements are oft en
supported by regional organizations that operate
across borders that need harmonized macroeconomic
statistics to monitor economic development and the
progress toward meeting the goals of the regional
arrangement. Th e statistical issues that may arise in
compiling harmonized data tend to be the same as
those addressed in the GFS framework: defi nitions,
coverage, time of recording, frequency, classifi cations,
and presentation formats. An eff ective way of achiev-
ing this harmonization is by using a common meth-
odology, such as the GFSM 2014.

A5.2 Where regional arrangements create regional
organizations by means of an intergovernmental
legal arrangement (e.g., a treaty), these institutions are
classifi ed as an international/regional organization
if they satisfy the criteria to be an institutional unit
and satisfy the criteria to be an international organi-
zation.^1 Regional organizations are created for many
purposes, including supporting, guiding, and even
governing aspects of the economic relationships or
integration processes among the region’s economies.
Regional organizations can be fi nancial (e.g., regional
central or development banks) or nonfi nancial (e.g.,
administrative or economic organizations).

1 International organizations are discussed in paragraphs
2.16–2.21.

A5.3 Regional arrangements tend to strengthen

economic relations among the governments of the

participating countries and between the regional

organizations and the governments of the partici-

pating countries. As these economic relations can

lead to significant flows and stock positions, it is

important to have guidelines on their recording

in GFS.

A5.4 Th is appendix presents the major types of

regional arrangements, and points out the main GFS

issues observed in each case. Th e appendix then ex-

amines using GFS under regional arrangements and,

fi nally, it analyzes the requirements for harmoniza-

tion to promote optimal coordination of policies and

consistency in data.

Types of Regional Arrangements.

A5.5 In the course of the last decades, numerous

regional arrangements have been set up with various

degrees of cooperation and integration between the

participating countries. Such regional arrangements

include:

• Customs unions, which have common tariff and
  other trade policies with nonmember economies


• Economic unions, which harmonize certain
  economic policies to foster greater economic
  integration


• Monetary and currency unions, which provide
  for a single monetary policy and the use of a sin-
  gle currency across an area.

Custom Unions

A5.6 A custom union is a form of regional arrange-

ment whereby agreement exists on a common tariff

(custom duties) vis-à-vis the other economies, while

the movement of goods within the arrangement tends

to be duty-free, although it may exclude exemptions

APPENDIX