Manual on Statistics of International Trade in Services

particular purposes.  One such breakdown is to 
distinguish among sales within the host country (local 
sales), sales to the country of the parent enterprise (i.e., 
the immediate investor), and sales to third countries.
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All three types of sales result from a commercial 
presence by the home country in the host country.  
However, only the local sales represent the delivery of 
output within host economies and thus relate directly to 
the commitments made under the GATS Mode 3 by 
those economies.  In addition, elimination of the sales to 
the parent country (which would already be included as 
imports in that country’s balance of payments accounts) 
may be desired in an analysis of FATS variables in 
conjunction with data on the parent country’s trade with 
non-residents, to avoid duplication.  
                                                       
 
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  In some cases, it might be possible to derive a close proxy for 
this breakdown by examining data on total sales in 
conjunction with data on exports; export data may indicate 
sales to the country of the parent separately from sales to third 
countries, and local sales may be derived by subtracting these 
export sales from total sales. 

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4.52.  As a medium-term goal, countries might attempt 
to disaggregate sales within each industry as between 
sales of goods and sales of services so as to obtain a 
measure of sales of services.  As mentioned in paragraph 
4.45 above on the attribution of FATS variables, such a 
breakdown would represent a first step toward a product 
breakdown of sales.  Sales of services would include 
both sales of services by enterprises that produce 
services as a primary activity and sales of services by 
enterprises that produce goods as a primary activity but 
have secondary operations in services. 
4.53.  The potential usefulness of this extension is 
considerable, and countries that are able to provide this 
data are encouraged to do so.  It is likely that a 
significant share of sales of services by affiliates is 
accounted for by affiliates whose primary industry is 
manufacturing or another goods producing industry.  For 
example, sales of computer services might, as noted 
earlier, be spread among manufacturing affiliates, 
wholesale trade affiliates and computer services 
affiliates.  If only total sales were collected, then by 
default only the sales by the affiliates classified in 
computer services would be taken as a measure of sales 
of such services, resulting in a significant 
understatement. 
4.54.  As a longer-term goal, countries are encouraged 
to work toward developing product detail on sales, on a 
basis compatible with EBOPS.
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2. Employment 
4.55.  In a FATS context, employment would normally 
be measured as the number of persons on the payrolls of 
foreign affiliates.  Employment data are sometimes 
converted to a full-time equivalent (FTE) basis, in which