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Symposium on Assessment of Trade in Services World Trade Organization 14-15 March 2002 Trends in Services Trade under GATS Recent Developments WTO Statistics Division [email protected] 1 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 2 Economic activity Statistics on Domestic Economic Activity Sources National Accounts, employment statistics, business statistics Examples of information Output, 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 3 Economic activity Share of Services Value Added in GDP Selected Countries, 1999 Services la nd A rg en tin C a ol om bi a Ph Per u ili pp in es In di a M al ay si a U ga n C am da er oo n A ng ol a ly Po Ita ce Fr an U ni te d St at es 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% Agriculture Manufacturing Other sectors 4 Economic activity Share of Services Value Added in GDP by Economic Groups 75 percent Developed countries 65 World 55 45 Developing countries 35 1990 1995 1999 5 Quantitative indicators 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 6 Quantitative indicators International Telecommunication Transactions and Minutes of International Telephone Traffic 70 65 120 110 BOP imports and exports 60 Billion of minutes Billion $ 100 90 80 55 70 International telephone traffic 50 60 45 50 1995 1996 1997 1998 1999 2000 Note: : International telecommunication transactions (BOP imports + exports) represent mostly payments between telecommunication operators for termination services 7 Quantitative indicators Tourist Arrivals and BOP Travel Exports France, Italy and Spain 130 170 International tourist arrivals 165 Travel exports in € 160 155 90 Travel exports in $ 150 70 145 1999 2000 2001 8 Billion tourists Billion Euros 110 BOP Balance of Payments Statistics Coverage Transactions between residents and non residents on goods, services, income, transfers, financial claims, and liabilities Concepts & definitions 5th 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 9 BOP Exports of Goods and Services, 1980-2000 Goods Services 400 12000 350 10500 Goods Services 9000 7500 200 Billion $ 250 6000 150 4500 GDP 100 3000 50 1500 20 00 98 96 94 92 90 88 86 84 0 82 0 19 80 (1980=100) 300 10 BOP Exports of Commercial Services by Economic Groups - Shares in Total Developing countries 1990 Developing countries 20% 1995 25% 75% 80% Developed countries Developed countries Developing countries 2000 26% 74% Developed countries 11 BOP Commercial Services Exports Shares by Regions percent 1990 1995 2000 60 55 50 45 40 35 30 25 20 15 10 5 0 Western Europe North America Asia Latin America Africa 12 BOP BPM5 Major Services Categories Commercial services: 1. Transport 3. Communication services 4. Construction services 5. Insurance services 2. Travel 3 -10 Other commercial Services 6. Financial services 7. Computer and Information services 8. Royalties and licence fees 11. Government services 9. Other business services 10. Personal, cultural and recreational services 13 BOP Structure of Commercial Services Exports 1990 1995 2000 50 45% percent 40 30 34% 29% 37% 32% 23% 20 10 0 Transport Travel Other services 14 BOP Structure of Other Services Exports, 1998 Other miscellaneous business services 43% Personal & cultural services Royalties & licence fees 3% 13% 3% 10% 10% 4% 14% Communication services Construction services Computer & Financial Information services services Insurance services 15 FATS 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 16 Share of Services Turnover of Foreign Affiliates in National Total - Selected Countries 35 30 25 percent FATS 20 15 10 5 0 n u H ry a g . s d d e n p d n c a n e n n p la la rw R a e a a l n o r o i J r P F N F Sw ech the Cz Ne ay n e d 17 Modes Sales by GATS Modes of Supply: Statistical Approximation Mode of Supply Proxy rough estimate (billion US$) 1 - cross-border supply BOP : commercial services exports (excluding travel) 2 - consumption abroad BOP : travel exports 3 - commercial presence FATS Statistics: Turnover 4 – movement of natural persons BOP : compensation of employees 1,000 500 2,000 50 18 Indicators Specialization Indicators Often named specialization ratios, comparative advantage, or export specialization generally defined as the ratio of exports of a service category to total exports of services, or goods and services, or GDP; often relative to the average value for all countries Can be computed for countries, or country groups, and at the level of modes of supply, using proxies Limitations should be recognized when interpreting results (lack of country coverage, data reliability, classification detail) 19 Indicators Commercial Services minus Travel (Mode 1) Major Exporters and Export Specialization, 2000 Major exporters Export specialization Billion US$ % (relative to exports of commercial services Belgium-Lux. Djibouti Hong Kong, China Ethiopia Netherlands Greece France Vanuatu Germany Neth. Antilles Japan Cape Verde United Kingdom Mozambique United States Kiribati 0 50 100 150 200 0 20 40 60 20 80 Indicators Travel Services (Mode 2) Major Exporters and Export Specialization, 2000 Major exporters Export specialization Billion $ Canada % (relative to exports of commercial services) St. Lucia China Samoa Germany Bahamas UK Dominican Rep. Italy Anguilla France Macau, China Spain Maldives US Namibia 0 20 40 60 80 100 120 85 86 87 88 89 90 91 92 21 93 94 Indicators FDI Stock in Services (Mode 3 proxy) OECD, Major Host Countries (inward) and Outward Specialization, 1999 Inward FDI stock, major countries Outward FDI stock, specialization (%, relative to GDP) Billion $ DK IT AU SE CH ES IT DE NL DK FR CA CA UK DE NL UK CH USA BL 0 100 200 300 400 500 600 0 10 20 30 40 50 22 60 Indicators Compensation of Employees (Mode 4 proxy) Major Importers and Export specialization, 2000 Major importers Export specialization Billion $ % (relative to exports of commercial services) UK Swaziland Italy Albania Luxemb. Philippines Bel.-Lux. Bosnia Her. Israel Armenia Germany Moldova Switzerl. Georgia USA Lesotho 0 1 2 3 4 5 6 7 8 0 10 20 30 40 50 23 60 Conclusions Trade in Services Statistics: Recent Improvements Statistics were dramatically improved recently: BOP • Thanks to BPM5, now detailed services categories are available • Thanks to MSITS, more detailed categories will be available FATS • Concepts, definitions and classification available (MSITS) • Data collection started in many countries • The bulk of services transactions covered by GATS may be assessed Modes • BOP and FATS are a first step in providing information by modes of supply 24 Conclusions Trade in Services Statistics : Remaining Weaknesses Statistics still need to be dramatically improved: BOP • 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 FATS • Lack of reliability due to the infancy stage of FATS statistics • Lack of comparability across countries • Developing countries have not started compilation yet Modes • There is no one-to-one correspondence between statistics and modes of supply 25 Conclusions The Task Force on Statistics of International Trade in Services 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 26