1. 1 Recent Developments in Measuring Trade in Services Barbara D’Andrea World Trade Organization (WTO) 2 nd International Seminar on Trade in Services Shanghai, China 27 November 2007

2. 2 Progress in... Methodology Analysis

3. 3 Under revision Methodology Revisions of international statistical classifications (BOP...) New Chapter on “Measuring modes of supply”

4. 4 Timetable for the Revision of the MSITS May 2006 – September 2007 Worldwide 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 revised Consultation with OECD-Eurostat Expert meeting September 2007 - April 2008 TFSITS 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 experts September - December 2008 TFSITS reviews comments and draft March 2009 Draft submitted to UN Statistical Commission Revised Manual in 2009!

5. 5 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

6. 6 What’s the problem with measuring GATS Modes of Supply? ? ? ? Intermodal linkages Services may be delivered through several modes of supply Mode 1Mode 4Mode 3Mode 2 New Chapter on “Measuring modes of supply” A single service transaction through different modes

7. 7 What do we need to measure? 1) Value of services trade flows 2) Additional indicators - indicators on market access in services - other indicators

8. 8 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)

9. 9 GATS Modes of Supply and BPM6/EBOPS services components Services 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

10. 10 GATS Modes of Supply and BPM6/EBOPS services components Services 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

11. 11 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

12. 12 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

13. 13 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

14. 14 For which natural persons should we measure the value of services trade? Natural persons Value 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

15. 15 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

16. 16 Migration statistics UN Recommendations on Statistics of International Migration, Rev.1 FATS Statistics Employment data Other sources Border passenger survey Residence and work permit data Statistics from industries/ministries Professional registers Enterprise surveys Recruitment firms Census and household survey Visas Possible sources of statistics on Mode 4 number of persons Work ongoing in the Task Force

17. 17 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,...)

18. 18 WTO International Trade Statistics 2007 Chapter 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