Services
Introduction
Services have become the most dynamic sector of world trade – but in ways that are not always recognized or understood. Just as services have come to dominate many national economies they are playing a bigger role in the global economy as well. Many factors are driving this – including consumption liberalization and investment – but the game-changer is technology. Services that were once difficult to trade because they could only be delivered in person are becoming far easier to trade because they can be delivered digitally. The 2019 World Trade Report explores this globalization of services – why it is happening how it is impacting economies and where new policy approaches are needed.
Conclusions
Over the last few decades services have become the backbone of the global economy and the most dynamic component of international trade. Services are increasingly easier to trade thanks in large part to digitalization. From online education to virtual law firms technology is penetrating all services sectors transforming services traditionally delivered face-to-face into remotely tradable services. Trade long dominated by the exchange of goods increasingly involves services transforming the global economy in the process.
Services trade in the future
This section attempts to provide some guidance as to how services trade patterns will change. Using a novel approach this section begins by showing recent trends in trade costs related to services and identifying the factors affecting these costs. Then major future trends in technology demography income and climate change are examined with a view to explaining how these trends can affect the choice of which services countries trade and with whom they trade as well as how they trade. Finally the potential impact of these trends on trade in services is quantified using the WTO Global Trade Model.
Foreword
Services are often largely overlooked in discussions on global trade yet they account for the majority of trade in many developed economies and are growing rapidly in many developing economies as well. This is perhaps because services are less tangible and the issues surrounding services trade are often more complex. This report therefore sets out to demystify trade in services. It aims to shed new light on this essential part of global trade provide a detailed picture of trade in services today and consider how it might evolve in the coming years particularly as new technologies make some services increasingly tradeable.
Acknowledgements and Disclaimer
The World Trade Report 2019 was prepared under the general responsibility of Xiaozhun Yi WTO Deputy Director-General and Robert Koopman Director of the WTO Economic Research and Statistics Division. The Report was coordinated by Emmanuelle Ganne and Stela Rubínová (Economic Research and Statistics Division) and by Antonia Carzaniga (Trade in Services and Investment Division). The lead authors of the Report are Barbara d’Andrea Andreas Maurer Roberta Piermartini and Robert Teh (Economic Research and Statistics Division) and Antonia Carzaniga. Other authors are Marc Auboin Eddy Bekkers John Hancock Kathryn Lundquist José-Antonio Monteiro Coleman Nee Victor Stolzenburg Ankai Xu and Qing Ye (Economic Research and Statistics Division); Pamela Apaza Markus Jelitto Joscelyn Magdeleine Juan Marchetti Martin Roy and Lee Tuthill (Trade in Services and Investment Division); and Rainer Lanz (Development Division).
Services trade in numbers
This section presents the importance of trade in services in the global economy by using an experimental dataset developed by the WTO called Trade in Services by Modes of Supply (TISMOS). This dataset captures services supplied through the four modes of supply categorized in the WTO General Agreement on Trade in Services (GATS); traditional services trade statistics cover only three of the GATS modes of supply. This section also discusses the participation of developing economies including least-developed countries (LDCs) the importance of micro small and medium-sized enterprises (MSMEs) and the role of women in services trade. Finally the section explores the content of services value-added in international global value chains.
World Trade Report 2019
Services have become the most dynamic component of global trade with an increasingly important role in the global economy and in everyday life. Yet the extent of services’ contribution to global trade is not always fully understood. The World Trade Report 2019 attempts to remedy this by examining how trade in services is evolving and why services trade matters.
Services Trade Policy, WTO Commitments, and their Role in Economic Development and Trade Integration
Services have long been perceived as playing a secondary role in world trade. In particular the role of services trade policies and multilateral services commitments often tends to be downplayed. However in value added terms services account for about 50% of world trade and are significant in exports of countries of all levels of development.