Manual on Statistics of International Trade in Services

partner country; 
(c)   FATS statistics that complement BPM5, dealing 
with aspects of international trade in services, as broadly 
defined, that are out of the scope of BPM5 
 
(e.g., transactions between residents); 
(d) A simplified statistical approach for the 
treatment of modes of supply and the special case of 
measurement of presence of natural persons insofar as it 
is not covered in BPM5 trade in services. 
B. Need for a statistical framework on 
international trade in services 
1. 
Globalization and multilateral services trade 
negotiations 
2.3. 
Rapid technological advances in the past few 
decades in transport, computing and 
telecommunications, including the development of the 
Internet and electronic commerce, have resulted in 
enterprises availing themselves of more distant 
resources for production and enabled them to serve 
ever wider markets.  This trend towards globalization, 
reinforced by liberalization policies and the removal 
of regulatory obstacles to economic activities, has 
fuelled the steady growth of international investment 
and trade in goods and services. Better 
communications and multinational enterprises have 
also facilitated the movement of people, both as 
independent service suppliers and as employees. 
2.4. 
It is estimated that services are the largest 
recipients of international investment flows, 
accounting for just over half of global outflows in 
1999.
17
 Services comprised about one fifth of 
worldwide trade in balance of payments terms. There 
are currently few reliable international comparisons of 
FATS data, but for the United States at least, in 1998, 
services delivered to foreign markets by foreign 
affiliates of United States companies, and to United 
States markets by United States affiliates of foreign 
companies, exceeded the respective values of the 
exports and imports of services recorded in the United 
States balance of payments.
18
 The development of 
statistics on trade in services has lagged behind the 
reality of the marketplace. The present Manual is 
designed to encourage Governments to correct the 
data imbalance, and to arm themselves with more 
appropriate statistical tools for economic analysis and 
                                                 
17
  United Nations Conference on Trade and Development, 
World Investment Report 2000: Foreign Direct Investment 
and the Challenge of Development (New York), 2000. 
18
  United States Bureau of Economic Analysis, The Survey of 
Current Business (Washington, D.C.), October 2000. 

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10 
policy-making to match their needs, whether in 
economic development or trade negotiations. 
2.5. 
An important response of the international 
community to the globalization of trade has been the 
creation of the World Trade Organization (WTO), 
which entered into force on 1 January 1995 as the 
major outcome of the Uruguay Round of multilateral 
trade negotiations.  WTO provides a common 
institutional framework for the conduct of trade 
relations among its member countries.  Its main 
functions are to facilitate the implementation, 
administration and operation of the multilateral trade 
agreements; to provide a forum for further 
negotiations; to review national trade policies; and to 
secure positive solutions to trade disputes.  The three 
principal WTO agreements are the General 
Agreement on Tariffs and Trade (GATT) of 1994, the 
General Agreement on Trade in Services (GATS) and 
the Agreement on Trade-Related Aspects of 
Intellectual Property Rights.  GATS is the first set of 
legally enforceable disciplines and rules ever 
negotiated and agreed at the world level to cover 
international trade in services.
19
 
2.6. Trade negotiators require statistics as a guide to 
negotiate specific commitments in trade in services 
and thereafter to monitor compliance and the resulting 
changes for each type of service. Statistics can aid the 
evaluation of market access opportunities; inform 
decisions on negotiating priorities and strategy; 
support the comparison of commitments; facilitate the 
assessment of the extent of liberalization achieved in 
specific services and markets; and provide a statistical 
background for the settling of disputes. Private 
business also needs the information in order to be 
aware of the possibilities offered by trade 
liberalization. The analysis of markets for whatever 
purpose also requires that trade data can be linked to 
output data, whether in terms of activities or of 
products. 
2.7. The  Manual acknowledges the tight constraints 
under which statistical compilers operate, whether in 
national statistics offices, central banks or other 
institutions, as well as the need not to burden private 
enterprise unduly, while still providing a clear 
ultimate goal for a conceptually complete framework. 
                                                 
19 .
 World Trade Organization, The Results of the Uruguay Round 
of Multilateral Trade Negotiations: The Legal Texts (Geneva, 
1995), annex 1B.