© wto/omc1 the manual on statistics of international trade in services and current revision process...
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© WTO/OMC 1
The Manual on Statistics of International Trade in Services and Current
Revision Process
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Trade in services statistics
• By service sectors• By partner• By modes of supply
GATS
Compilers of Statistics BOP/FATS
Trade Negotiators
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Why are statistics on international trade in services needed in trade negotiations?
Market access
NegotiateDecision-making
Compare Quantify Statistical
framework
Manual
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The Linchpin: Article XIX:3 “For each round, negotiating guidelines and procedures shall be established. For the purposes of establishing such guidelines, the Council for Trade in Services shall carry out an assessment of trade in services in overall terms and on a sectoral basis with reference to the objectives of this Agreement, including those set out in paragraph 1 of Article IV”.
Assessment of Trade in Services under the GATS
Assessment
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Regional Trade Agreements• Increasing number of Preferential Trade
Agreements • New WTO transparency mechanism
(14/12/2006):– Early announcement and notification of RTAs– Factual presentation on trade in services
• Trade or BOP data by services sector/subsector, by partner
• GDP or production data by services sector/subsector• Relevant FDI statistics by services sector/subsector,
by partner• Data on movement of natural persons by services
sector/subsector, by partner
Assessment
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What is the problem for the statistical framework?
Goods“cross-border”
response: International Merchandise Trade Statistics (IMTS), Rev.2 - Compilers Manual
Services• mode 1: “cross-border” • mode 2: consumption abroad• mode 3: commercial presence• mode 4: presence of natural
persons
response: Manual on Statistics of International Trade in Services (MSITS)Compilation guidance
2002 Manual
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The 2002 Manual on Statistics of International Trade in Services
Guidelines and recommendations on the measurement of trade in services
Balance of Payments statistics
Foreign Affiliates Trade in Services statistics
2002 Manual
Annex: Movement of natural persons
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Of interest for GATS purposes
but...
BOP Statistics - Short Presentation (1/2)
BOP summarises transactions of an economy with the rest of the world
BOP
Current account
Capital & financial account
GoodsServicesIncomeCurrent transfers
11 componentsTransportationTravelCommunicationsetc.
2002 Manual
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BOP Statistics - Short Presentation (2/2)
• More detail needed than 11 BPM5 services components
MSITS introduces EBOPS (breakdown of BPM5 services)
• Most services delivered under Mode 3 and Mode 4 are not well covered or identified
However, some BOP indicators helpful:
• Foreign Direct Investment
• Compensation of employees• Workers’ remittances
Mode 3
Mode 4
2002 Manual
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FATS Statistics - Short Presentation
Coverage• Operations of foreign affiliates, • Particular focus on services
Indicators• Turnover• Employment• Value added• …
Concepts & definitions• Manual on Statistics of International Trade in Services
2002 Manual
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Modes of Supply and Statistical Domains
2002Manual
Mode of Supply Relevant Statistical Domains
Mode 1: Cross border supply
BOP: Commercial services
(excluding travel and construction services)
Mode 2: Consumption abroad
BOP: Travel
Mode 3: Commercial presence
FATS statistics BOP: construction services FDI data (supplementary information)
Mode 4:
Presence of natural persons
Insufficiently covered BOP: commercial services (excluding travel)
supplementary information: compensation of employees
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Manual: 5 core recommendations
• Implementation of BPM5 principles (resident / non-resident transactions):
• Definitions, Valuation, Recording• Classification of services (11 main standard
services components)
• First EBOPS disaggregation:• Focus on most important services for
compiling economy+ related memorandum items
Recommendations
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5 core recommendations (continued)
• Foreign Direct Investment (FDI) statistics: • Complement to FATS statistics• Often only quantitative information related to
commercial presence• Flows, income and stocks; Broken down by industry
• FATS statistics: main basic variables• Basic variables: sales, employment, value added,
etc. ; compiled by industry (ICFA); inward and outward FATS
• Inward FATS (directly connected to GATS) often easier to collect
Recommendations
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5 core recommendations (continued)
• Partner country statistics– Transactions between residents and non-
residents:• Total services• BPM5 main services items• If possible EBOPS items
– FATS and FDI statistics for main ICFA categories
– Priority: most important partners
Recommendations
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Additional recommendations
• Completion of EBOPS implementation
• Further FATS statistics details
• Collect information on natural persons under GATS framework
• Separate trade (resident/non-resident transactions) between related and unrelated parties
• Allocation of transactions to modes of supply
Recommendations
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Need for a revised Manual• Incorporate BPM6 and SNA revisions
+ ISIC, CPC, Tourism statistics....• New recommendations relating to activities of
foreign affiliates: – OECD Handbook on Economic Globalisation
Indicators– OECD Benchmark Definition of FDI– Eurostat recommendations Manual
• Need for guidance for mode 4 and modes of supply generally
... 1st worlwide consultation in 2006
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Planned Structure of Revised Manual (1/2)
Chapter I – General introduction and foundations
Chapter II – Conceptual framework
Chapter III – Transactions between residents and non-residents
Chapter IV – Foreign affiliates statistics
Chapter V – Modes of supply
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Planned Structure of Revised Manual (2/2)
Annex I – EBOPS Annex II – EBOPS, CPC, Ver.2, GNS/W/120
correspondence tables Annex III – ICFA – EBOPS correspondence
tables Annex IV – Extract from the General
Agreement on Trade in Services Annex V – Services Sectoral Classification
List – GNS/W/120 Annex VI – The Manual and Tourism statistical
frameworksAnnex VII – Analysing trade in services data Annex VIII – Cross-cutting issues on goods and
services ?
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Shorter and clearer definition of GATS and
coverageGATSPillars
Set of general obligations and disciplines
Countries schedules of specific commitments
Annexes on specific issues
Commitmentsunder GATS
By modes of supply
By services sectors
The Services Sectoral Classification ListGNS/W/120
... More detailed description of modes of supply in Chapter V
NEW Manual
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BPM6
SNA 2008
“Rest of the world account”
Statistical systems
Definition of services
Definition of intern-ational transactions
Foreign-controlled corporations
Definitions of economic variables
Trade in services
Tourism
Definition of tourism, visitor, products, etc.
Merchandise
Overlapping products
BD4
Migration
International migration flows and stocks
Migrants, travellersForeign Direct Investment
AMNE/FATS
NEW Manual
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Integrated Statistical ClassificationsNegotiationsStatistics
Products
Activities
Goods
CPC(All)
HS GNS/W/120
EBOPS(Services)
ISIC, Rev. 3
ICFA
Services
SITC
Other
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Approach and frameworkGuidelines and recommendations on the
measurement of trade in services
Trade in services in Balance of Payments
- EBOPS
Services supplied through direct
investment - FATS
Services supplied through presence of natural persons and
labour mobility
... Analysis by origin and destination
NEW Manual
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5. Construction
6. Insurance and pension services
7. Financial services
8. Charges for the use of intellectual property
9. Telecommunications, computer and information services
10. Other business services
11. Personal, cultural and recreational services
Commercial services:
1. Manufacturing services on physical inputs owned by others
2. Repairs and maintenance
3. Transport
4. Travel
5. - 11. Other commercial services
12. Government goods and services (not in GATS)
Main revisions in draft BPM6/EBOPS classification of services
BOP/EBOPS services changes
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Proposed main revisions for Chapter III and EBOPS
All BPM6 changes included
“Computer services” breakdown: software and other
“Travel” – alternative presentation by product
“Other business services” restructured:Research and developmentProfessional and management consulting servicesTechnical, trade-related and other business services
“Gambling services”, “Cultural services” identified
Supplementary: Architectural, Engineering, Distribution services etc.?
BOP/EBOPS services changes
Alternative: Software transactions, Call centres, environment etc.?
Service contracts vs. employer-employee relationship clarified
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Use of intellectual property
Sale/purchase of ownership rights
Franchises and trademarks Charges for the use of intellectual property
capital account entry
Outcomes of research and development
Charges for the use of intellectual property
research and development
services
Computer, audiovisual, and related services:
License to use excluding
reproduction and distribution
License to reproduce and/or
distribute
(a) Customized all types relevant service
item
(b) Noncustomized—downloaded or otherwise electronically delivered
relevant service item
(c) Noncustomized—provided on physical media with periodic license fee
relevant service item
relevant service item*4
(d) Noncustomized—provided on physical media with right to perpetual use
goods
charges for the use of intellectual property n.i.e.
Intellectual property in BPM6 and MSITS?BOP/EBOPS
serviceschanges
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Proposed main revisions forChapter IV FATS
No large change
Link with international delivery of services and trade negotiations
Alignment with HEGI, BD4 and Eurostat FA regulation
Revised ICFA proposal following ISIC Rev 4
FATS changes
Name change: FATS = Foreign Affiliates Statistics
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Affiliates of hotelchains (mode 3)
An example: Tourism sector
Mode 2↓
BOP Travel
but
Foreign tourist guides (mode 4)
Foreign managers/intra-corporate
transferees (mode 4)
Sales of tourism operators (mode 1)
Negotiating list GNS/W/120:Hotels and restaurantsTravel agencies and tour operator serv.Tourist guide servicesOther services
4 modes of supplying services
NEW chapter
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Information needs for assessing trade in services by modes of supply
- Value of services exports or imports
- More specific variables (market access), e.g FDI or number of persons moving (flow) or present (stock)
Simplified approach:
- either dominant mode → e.g. telecommunications (mode 1)
- or no dominant mode → e.g. computer consultant (mode 1 and 4)
waste-treatment (mode 2 and 4)
construction (mode 3 and 4)
→ Most significant mode of supply
Develop practices to separately identify modes in EBOPS
NEW chapter
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Options to assess Mode 4 delivery in surveys
1.Did the service delivery involve physical presence of service provider?
Yes? Then, how was most of the service value delivered (time/resources)?
Mostly by fax, email, etc.
Natural person at the end (e.g. to supervise)
Mode 1
The person’s knowledge was essential
to deliver the service
Mode 4
2. Require in specific surveys allocation by each GATS mode of supply
3. Require estimated share of inputs for the service trade related to mode 4
NEW chapter
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GATS Simplified allocation of FATS and EBOPS data to modes of supply
Modes of supply 1 2 3 4 1 and 4 2 and 4 3 and 4
Foreign Affiliates Statistics (by service product using EBOPS; if not possible by service activity using ICFA) Services sales/output (by type of sevice) X
Balance of Payments (by service product using EBOPS) Manufacturing serv. on physical inputs owned by others X Maintenance and repair services n.i.e. X Transport X Passenger X
Freight X
Post and courier services X
Other
Serv. to domestic carriers in foreign ports (and vice-versa) X
Other X
Travel X Goods
Local transport services X
Accommodation services X
Food-serving services X
Other services X
Telecommunication, computer and information services X Telecommunication services X
Computer services X
Information services X
Construction X Goods
Services X
Insurance and pension services X Financial services X
NEW chapter
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Simplified allocation of FATS and EBOPS data to modes of supply
Modes of supply 1 2 3 4 1 and 4 2 and 4 3 and 4
Charges for the use of intellectual property Licenses to reproduce and/or distribute computer software
Licenses to reproduce and/or distribute audiovisual products
Charges for use of outcomes of research and development
Franchises and trademarks licensing fees X
Other business services X Research and development services X
Professional and management consulting services X
Technical, trade-related and other business services
Architectural, engineering, scientific, other technical serv. X
Waste treatment, de-pollution, agricultural, mining services
o Waste treatment and de-pollution X
o Services incidental to agriculture X
o Services incidental to mining x
Operational leasing services X
Trade-related services X
Other business services, n.i.e. X
Personal, cultural and recreational services X Government goods and services n.i.e. Government goods n.i.e., Credits and debits
Government services n.i.e., Credits
Government services n.i.e., Debits
Commercial services purchased in host economies
o Government units in diplomatic and similar enclaves X
o Personnel from home economy and dependants X
Other commercial services n.i.e purchased by government X X
Non-commercial services acquired by government
Estimated distribution (wholesale, retail trade) services X
NEW chapter
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Mode 4, migration and tourism statistics
Migrant categories
Non-migrant categories
Categories of the UN Recommendations
on Statistics of International
Migration, revision 1:
NEW chapter
Length of stay of individuals Purpose of trip or migration Less than
3 months 3 to 12 months
more than 12 months
Visitors Personal International
Holiday, leisure and recreation Recommendations on Visiting friends and relatives Tourism Statistics 2008 Education and training Shopping Etc.
Business and professional (no employer-employee relationship with entity established in compiling economy)
X x
Contractual service supply X x - self-employed a X x - employed X x Intra-corporate transfer X x Serv. salespersons/ commercial pres. X x Other
Employment (migrant workers, employment-based settlement)
Intra corporate transfer x X Directly recruited by a foreign
established company x X
International civil servants Other
Trainees Family reunification/formation Etc.
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Proposed Annex on Analyzing Trade in Services Data
• Combining balance of payments data, foreign affiliates trade data, and mode 4 data for analysis
• addressing linkages between services trade and production data
• Uses of bilateral flow data including asymmetries
• Identifying comparative advantage
• Market access
• Global outsourcing
• Health services: an example of sectoral analysis
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Next steps for the Revision of MSITSMay 2006 – September 2008Worldwide consultation on scope of update and issuesTFSITS reviewed worldwide consultation responsesStarted drafting of Chapter on modes of supply and updating/drafting of other chaptersConsultation with 2007 OECD-Eurostat Expert meeting and 2008 Working Party on International Trade in Goods and Services. Progress report to IMF BOPCOM and UN Statistical CommissionDraft chapters agreed by TFSITS
September – 24 November 2008: Worldwide consultation on complete draft of revised MSITSDecember 2008 – February 2009:TFSITS to review comments and re-draft MSITS chaptersMarch – April 2009: TFSITS meeting: review comments and revised draft; cross-cutting issuesSummer 2009: Finalize draft and chapters and post for final reviewNovember 2009: Prepare submission to UNSCMarch 2010: Draft submitted to UN Statistical Commission
Revised Manual in 2010!