1. Item 20a International delivery of services by mode of supply
Andreas Fuchs and William Cave
OECD Statistics Directorate

2. Overview
OECD Statistics working paper on globalisation of services Bensidoun&Ünal-Kesenci 2008
compared trade in services and FATS for 2000
outlined a methodology for estimating modes of supply
Rare attempt to look at the two datasets TIS and FATS together
Published and unpublished FATS data supplied by OECD DSTI
OECD TIS data ( no partners)
variable sales or gross output common to trade and FATS
estimates delivery of services by modes 1, 2 and 3

3. Overview continued.. evolution 2000 to 2005 Five broad sectors
Up to 20 countries analysed
Foreign service penetration ratio looks at exposure of markets to foreign competition
Basic data presented
Some missing values in time series interpolated
Data quality problems
Conclusions

4. Methodological issues
Used common variable sales/gross output for trade statistics and FATS
FATS represent business and production statistics
Problem of FA distribution sector sales of goods adjusted to gross output using a crude factor 25%
Not clear what FATS data covers for insurance and financial services not much metadata
Computed a simple foreign service penetration ratio (services imports +inward FATS sales)/domestic demand
Similarly for outward delivery of services
FATS sales are not international trade in the SNA sense – does comparison with trade or adding to trade make sense?
FATS sales are in someway related to international trade and the factor of intra-firm trade (complements or substitutes? )

5. Affiliated trade in services
US BEA has shown that a majority of royalties, computer services and other business services trade is between affiliated parties
Important that we know more about such affiliated trade

6. Inward delivery of services
Imports and inward FATS sales of services
Mode 3 dominant in most cases
Relative importance of mode 3 increased
Japan appears least open and Czech Republic most open to foreign services

7. Inward service supply by mode of supply

8. Average annual growth in inward delivery of services

9. Evolution of relative importance of mode 3 2000-2005

10. Outward delivery of services
Mode 3 dominates for larger countries but less so for smaller ones
Germany “compensate” deficits in trade in services with large “surpluses” in mode 3

11. Conclusions/suggestions
A very interesting exercise to compare FATS and TIS data
Relative importance of mode 3 increased over period
Data shortcomings – e.g.Lack of FATS data and issue of time series, some FATS data on merchandise trade but not on trade in services, poor EBOPS match to industry
Demonstrates the interest in simple allocation of modes
Highlights importance of having more information on intra-firm or affiliated trade
Encourage more countries to produce FATS data and consider links with TIS
Question: Should this work be developed further?
Your comments on the paper are sought