Why origin matters in trade data

Different reporting standards are applied to determine the country of origin of trade flows in existing international trade databases, altering the geography of trade. We illustrate this issue using two widely used trade databases, UN-Comtrade and IMF-DoTS, and show that it has important implications when evaluating the impact of trade policies using a gravity framework. We provide evidence that IMF-DoTs applies different reporting standards for intra- and extra-EU trade from 1999 onwards. These discrepancies significantly bias upward the estimated impact of RTAs, the EU, and the euro area on trade. Reporting standards also differ across declaring countries in UN-Comtrade. We show that it inflates the estimated impact of Brexit on trade.