Manual on Statistics of International Trade in Services

compensation of employees in the case where 
employment is for less than one year. In the case of 
employment that occurs for more than one year, partial 
information is available through the BPM5 component 
workers’ remittances.  Compensation of employees and 
workers’ remittances has been discussed in the main 
body of the Manual. Some data on services provided 
through mode 4 may also be available as supplementary 
information for FATS statistics. Notwithstanding their 
limited applicability as aggregate measures, these data 
are often the best approximation available for identifying 
the relative importance of trade through mode 4, if the 
country does not have a large permanent resident 
population of foreign workers. Future development of 
these statistical measures that could allow the separate 
identification of the part arising from services activities 
and remittances by non-permanent workers would lead 
to a greater compatibility with mode 4. 

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75 
8.  When a natural person provides a service, it is the 
value of his or her service or product delivered that is 
the main variable to be identified and measured, to 
allow comparisons across the modes of supply and 
between countries. In the case of services transaction 
between residents and non-residents, a value of 
contract or income received may be seen as the best 
measure for quantifying this type of trade. However, 
employment does not lend itself to product 
classification. In addition, as has been noted, more than 
one mode of supply may be involved in the delivery of 
a service product, and the allocation of the value of 
trade according to the modes of supply may be 
difficult. Other types of statistics that may be used to 
demonstrate the importance of the movement of 
persons in the delivery of a service are (a) income of 
the foreign natural persons temporarily engaged for the 
delivery of services in all domestic companies or to 
natural persons directly, and/or (b) the number of these 
foreign persons.  
9.  As underlined above, GATS makes clear that in the 
GATS trade sense mode 4 does not represent 
international migration as commonly defined. The key 
differentiating factor is the GATS notion that the 
presence of natural persons is not for permanent 
employment in the receiving country - as self-employed 
or by an establishment located there - but for the purpose 
of temporarily supplying a service there. When the 
service product has been delivered, the presence is to be 
terminated and the natural person should leave the 
country. Hence the temporary nature of the movement as 
well as of the contact between the service provider and 
the consumer of the service is a key criterion for this 
mode of supply. 
10. A one-year rule for residency for persons as well 
as establishments is used in BPM5, the 1993 SNA and 
the recommendations concerning international 
migration. Applying this rule of thumb means that 
whether and how foreign nationals’ economic 
activities are attributed statistically to the economies 
of the sending and receiving countries will depend on 
the length of their stay in the host country. However, 
the one-year cut-off point adopted in the statistical 
frameworks does not correspond to the meaning of a 
“temporary stay” adopted in GATS. As a result, the 
available statistical information on economic 
activities of residents will contain elements related to 
the temporary (in the GATS sense) presence. Thus, 
from the point of view of trade policy, the one-year 
rule for residency and the related statistics are not 
very satisfactory. 
11. It should be noted that although the GATS 
agreement covers all categories of persons who deliver a 
service while resident in another WTO member country, 
so far, for the majority of member countries, GATS 
commitments have been made only for business visitors 
and investment-related visits. These commitments 
include high-level managers as well as specialists with 
unique knowledge, normally not available locally. 
Foreign seasonal and short-term workers in, for 
example, agriculture, hotel and catering, or construction 
have not been included so far in a WTO member 
country’s commitment under GATS, even if they do not 
obtain residence status in the country and thus satisfy the 
GATS criteria. This is because national legislation will 
tend to see them as “non-resident employees” of those 
engaging them, and their provision of labour services is 
not seen as being part of international trade. The interest 
of policy makers and trade negotiators would be to 
identify in the statistics all foreign nationals who are 
delivering service products of the type for which 
commitments are being made or that might be made in 
the future, as well as, and separately from, statistics on 
foreigners employed "directly" with a resident and non-
resident status. Together, such statistics will provide 
good indicators of the extent to which the domestic 
economy is dependent on foreign workers as well as the