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WTO Statistics Division Statistics@WTO.org

Trends in Services Trade under GATS

Recent Developments

Symposium on Assessment of Trade in ServicesWorld Trade Organization 14-15 March 2002

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To which extent can statistics help in the Assessment of Trade in Services ?

Major relevant Statistical Frameworks• Statistics on Domestic Economic Activity • Sectoral Statistics/Quantitative Indicators • Balance of Payments Statistics • Foreign Affiliates Trade in Services (FATS) Statistics

Statistics and Modes of supply

Specialization Indicators

Conclusions

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Statistics on Domestic Economic Activity

SourcesNational Accounts, employment statistics, business statistics

Examples of informationOutput, value added, number of employees, turnover

Why relevant?Information on market size, competitiveness, employment generation

Who collects?Country comparable statistics are collected by UN, OECD, IMF, and Eurostat, but national sources are much richer

Economic activity

4

0%10%20%30%40%50%60%70%80%90%

100%

United

State

s

France Ita

ly

Poland

Argen

tina

Colom

biaPer

u

Philippin

esIn

dia

Mal

aysi

a

Uganda

Camer

oon

Angola

Services Agriculture Manufacturing Other sectors

Share of Services Value Added in GDP Selected Countries, 1999

Economic activity

5

35

45

55

65

75

1990 1995 1999

Share of Services Value Added in GDP by Economic Groups

Developed countries

Developing countries

World

Economic activity

percent

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Quantitative Indicators

Coverage• Sector-specific quantitative information

Examples of specific services sectors• Transport: persons or cargo transported • Telecommunication: minutes of international telephone traffic

Why relevant?• No price distortion. Meaningful, because specifically defined for the sector in question

But ...• Do not provide for comparability across sectors

Quantitative indicators

7Note: : International telecommunication transactions (BOP imports + exports) represent mostly payments between telecommunication operators for termination services

International Telecommunication Transactions and Minutes of International Telephone Traffic

45

50

55

60

65

70

1995 1996 1997 1998 1999 2000

Billio

n $

50

60

70

80

90

100

110

120

Bil

lio

n o

f m

inu

tes

International telephone traffic

BOP imports and exports

Quantitative indicators

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70

90

110

130

1999 2000 2001

Bil

lio

n E

uro

s

145

150

155

160

165

170

Bil

lio

n t

ou

rist

s

International tourist arrivals

Travel exports in €

Travel exports in $

Tourist Arrivals and BOP Travel Exports France, Italy and Spain

Quantitative indicators

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Balance of Payments Statistics

CoverageTransactions between residents and non residents on goods, services, income, transfers, financial claims, and liabilities

Concepts & definitions5th edition of IMF BOP Manual (BPM5)

Why relevant?Information on international trade in services is widely comparable across countries

Who collects?IMF, OECD, and Eurostat at the international level

BOP

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BOP

Exports of Goods and Services, 1980-2000

0

50

100

150

200

250

300

350

400

(19

80

=1

00

)

0

1500

3000

4500

6000

7500

9000

10500

12000

Bill

ion

$

Goods Services

Services

Goods

GDP

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Exports of Commercial Services by Economic Groups - Shares in Total

80%

20%

1990

Developedcountries

Developingcountries 1995

Developedcountries

Developingcountries

26%

74%

2000

Developedcountries

Developingcountries

25%

75%

BOP

12

05

1015202530354045505560

WesternEurope

NorthAmerica

Asia LatinAmerica

Africa

per

cen

t

1990 1995 2000

Commercial Services Exports Shares by Regions

BOP

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BPM5 Major Services Categories

3. Communication services

4. Construction services

5. Insurance services

6. Financial services

7. Computer and Information services

8. Royalties and licence fees

9. Other business services

10. Personal, cultural and recreational services

Commercial services:

1. Transport

2. Travel

3 -10 Other commercial Services

BOP

11. Government services

14

0

10

20

30

40

50

Transport Travel Other services

pe

rce

nt

1990 1995 2000

Structure of Commercial Services Exports

29%

23%

34% 32%37%

45%

BOP

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Structure of Other Services Exports, 1998

Other miscellaneous

business services

Personal & cultural services

Royalties & licence fees Computer &

Information services

Financial services

Communication services

Construction services

Insurance services

43%10%

4%14%10%

3%13% 3%

BOP

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Foreign Affiliates Trade in Services (FATS) Statistics

Information covered • Operations of foreign affiliates, such as turnover and employment

Direction of trade• Inward : activity of foreign affiliates in the compiling economy• Outward: foreign affiliates of the compiling economy that are established abroad

Concepts & definitions• Manual on Statistics of International Trade in Services• Foreign Affiliates are those affiliates in which the foreign investor holds a majority of the ordinary shares or voting power

Why relevant ?• Provides information on GATS mode 3 - commercial presence

FATS

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Share of Services Turnover of Foreign Affiliates in National Total - Selected Countries

0

5

10

15

20

25

30

35

pe

rce

nt

Hungary

Norway

Sweden

Czech

Rep

.

Nether

lands

Finla

nd

Poland

France

Japan

FATS

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Sales by GATS Modes of Supply: Statistical Approximation

Modes

Mode of Supply Proxy rough estimate

(billion U S $)

1 - c ross-bo rde rsupply

B O P : com m ercia l serv icesexports (exclud ing trave l)

1 ,000

2 - consum ptionabroad

B O P : trave l exports 500

3 - com m ercia lp resence

F A T S S tatistics: T u rnover 2,000

4 – m ovem ent o fnatu ra l pe rsons

B O P : com pensation o f em p loyees 50

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Specialization Indicators

Often named specialization ratios, comparative advantage, or export specialization

generally defined as the ratio of exports of a service category to total exports of services, or goods and services, or GDP; often relative to the average value for all countries

Can be computed for countries, or country groups, and at the level of modes of supply, using proxies

Limitations should be recognized when interpreting results (lack of country coverage, data reliability, classification detail)

Indicators

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Commercial Services minus Travel (Mode 1) Major Exporters and Export Specialization, 2000

0 50 100 150 200

United States

United Kingdom

Japan

Germany

France

Netherlands

Hong Kong, China

Belgium-Lux.

0 20 40 60 80

Kiribati

Mozambique

Cape Verde

Neth. Antilles

Vanuatu

Greece

Ethiopia

Djibouti

Major exporters Export specialization

Billion US$ % (relative to exports of commercial services)

Indicators

21

85 86 87 88 89 90 91 92 93 94

Namibia

Maldives

Macau, China

Anguilla

Dominican Rep.

Bahamas

Samoa

St. Lucia

0 20 40 60 80 100 120

US

Spain

France

Italy

UK

Germany

China

Canada

Travel Services (Mode 2) Major Exporters and Export Specialization, 2000

Billion $ % (relative to exports of commercial services)

Major exporters Export specialization

Indicators

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FDI Stock in Services (Mode 3 proxy) OECD, Major Host Countries (inward) and

Outward Specialization, 1999

(%, relative to GDP)

0 100 200 300 400 500 600

USA

UK

DE

CA

FR

NL

IT

CH

AU

DK

0 10 20 30 40 50 60

BL

CH

NL

UK

CA

DK

DE

ES

SE

IT

Billion $

Inward FDI stock, major countries Outward FDI stock, specialization

Indicators

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Compensation of Employees (Mode 4 proxy) Major Importers and Export specialization, 2000

Major importers Export specialization

Billion $ % (relative to exports of commercial services)

Indicators

0 1 2 3 4 5 6 7 8

USA

Switzerl.

Germany

Israel

Bel.-Lux.

Luxemb.

Italy

UK

0 10 20 30 40 50 60

Lesotho

Georgia

Moldova

Armenia

Bosnia Her.

Philippines

Albania

Swaziland

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Trade in Services Statistics:Recent Improvements

• Thanks to BPM5, now detailed services categories are available• Thanks to MSITS, more detailed categories will be available

FATS

BOP

• Concepts, definitions and classification available (MSITS)Concepts, definitions and classification available (MSITS)• Data collection started in many countriesData collection started in many countries• The bulk of services transactions covered by GATS may be assessed The bulk of services transactions covered by GATS may be assessed

Conclusions

Modes • BOP and FATS are a first step in providing information by modes of supply

Statistics were dramatically improved recently:

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Trade in Services Statistics :Remaining Weaknesses

Conclusions

• BOP statistics lack reliability for detailed categories • Documentation on data coverage and deviations from standards is rarely available • detailed categories are not reported by all countries

BOP

FATS• Lack of reliability due to the infancy stage of FATS statistics• Lack of comparability across countriescountries• Developing countries have not started compilation yet Developing countries have not started compilation yet

Modes• There is no one-to-one correspondence between statistics and modes of supply

Statistics still need to be dramatically improved:

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The Task Force on Statistics of International Trade in Services

Conclusions

The Task Force completed the Manual on Statistics of International Trade in Services

The Manual will be published by the UN very soon; it is available on the UN and OECD web pages

The Task Force will now focus on compilation guidance