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Recent Developments in Measuring Trade in

Services

Barbara D’AndreaWorld Trade Organization (WTO)

2nd International Seminar on Trade in Services Shanghai, China

27 November 2007

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Progress in...

Methodology

Analysis

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Under revision

Methodology

Revisions of international statistical classifications

(BOP...)

New Chapter on “Measuring modes of supply”

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Timetable for the Revision of the MSITS

May 2006 – September 2007Worldwide consultation on scope of update and issues.TFSITS reviewed worldwide consultation responses Started drafting of Chapter on modes of supply and updating of other chapters. Drafts revisedConsultation with OECD-Eurostat Expert meeting

September 2007 - April 2008TFSITS to agree main proposals for changes and complete draft of the main text of revised MSITS; and as far as possible revise concordances.Summer 2008 Worldwide consultation on complete draft of revised MSITS.Throughout 2008 Round of consultations among expertsSeptember - December 2008 TFSITS reviews comments and draftMarch 2009 Draft submitted to UN Statistical Commission

Revised Manual in 2009!

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Proposed main revisions in the BOP services account (BPM6)

“Merchanting” under goods

“Repairs and maintenance on movable goods” under services

“Manufacturing services on physical inputs owned by others”

“Telecommunications, computer, and information services”-one group

Royalties becomes “Fees for franchises and other proprietary rights”

FISIM in services

Revisions of international statistical classifications

“Travel” - supplementary breakdown

“Other business services” restructured

“Gambling services” identified

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What’s the problem with measuring GATS Modes of Supply??

?

?

Intermodal linkages

Services may be delivered through

several modes of supply

Mode 1

Mode 4

Mode 3Mode 2

New Chapter on “Measuring modes of supply”

A single service transaction through different modes

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What do we need to measure?

1) Value of services trade flows

2) Additional indicators

- indicators on market access in services

- other indicators

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GATS Modes of Supply and Statistical Domains

1) Value of service trade

Mode 1

Mode 2

Mode 4

Balance of Payments Statistics

Mode 3

Foreign Affiliates Trade in Services Statistics

(FATS Statistics)

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GATS Modes of Supply and BPM6/EBOPS services

componentsServices predominantly delivered through

- Transportation services

- Telecommunications services

- Information services

- Insurance services

- Financial services

- Fees for franchise and other proprietary rights

- Operational leasing (in “Other business services”)

- Trade-related services (in “Other business services”)

Mode 1

Mode 2

1) Value of service trade

- Travel (only services)

- Supporting and auxiliary services to carriers in

foreign ports (in Transport)

- Repairs and maintenance on movable goods

- Manufacturing services on physical inputs owned by others

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GATS Modes of Supply and BPM6/EBOPS services

componentsServices predominantly delivered through

- Services incidental to agriculture and mining

1) Value of service trade

Mode 4

But for services delivered through 2 modes of supply:

- Computer services

- Professional and management consulting services (in Other business services)

- Architectural, engineering, scientific and other technical services (in Other business services)

- Personal, cultural and recreational services

?

Mode 4

Mode 1

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Construction

GATS Modes of Supply and BPM6/EBOPS services

components

1) Value of service trade

Waste treatment and de-pollution

(in “other business services”)?

Mode 4

Mode 2

Mode 3

?

Mode 4

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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 provided (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 services surveys allocation by each GATS mode of supply

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Contractual service suppliers – Independent service suppliers (self-employed)– Employees of foreign service suppliers

Who is covered by Mode 4?

Intra-corporate transferees

Services sellers /

Persons responsible for setting up

commercial presence

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For which natural persons should we measure the value of services trade?

Natural personsValue of service

trade flows

Contractual services suppliers-Self-employed

- Employees of foreign service suppliers

Intra-corporate transferees

Services sellers -

Persons responsible for setting up commercial presence

Yes

No

No

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2) Additional indicators

a) Market access indicators

on Mode 3:-number of foreign affiliates- type of legal entity- FDI stocks and flows in services...

on Mode 4:

Number of:

1) Contractual services suppliers

2) Intracorporate transferees

3) Services sellers/persons responsible of setting up commercial presence

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Migration statistics

UN Recommendations on Statistics of International Migration, Rev.1

FATS StatisticsEmployment data

Other sourcesBorder passenger survey

Residence and work permit dataStatistics from industries/ministries

Professional registersEnterprise surveysRecruitment firms

Census and household surveyVisas

Possible sources of statistics on Mode 4 number of persons

Work ongoing

in the Task Force

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2) Additional indicators

b) Other indicators

- Sales or output on services industries from national accounts or business statistics

- Employment data in services industries

- Sectoral quantitative indicators (ITU, transport,...)

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WTO International Trade Statistics 2007Chapter 3 “Trade in Commercial Services by Category”

Highlights

Estimates of world exports/imports by sector

Leading/major exporters and importers by sector

Bilateral data on trade in services by sector

and in Chapter 1

Foreign Affiliates Trade in Services data

Analysis

http://www.wto.org/english/res_e/statis_e/its2007_e/its07_toc_e.htm