Manual on Statistics of International Trade in Services

UN 
United Nations 
UNCTAD 
United Nations Conference on Trade and Development 
WTO 
World Trade Organization 
 

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1 
Summary  
 
The Manual on Statistics of International Trade in Services is an important first step in addressing a growing 
demand from Governments, business and analysts for more relevant, detailed and internationally comparable 
statistics on such trade. A special emphasis is given to the statistical information needs of international trade 
negotiations and agreements.  
The aim of the Manual is to provide a coherent conceptual framework within which countries can structure the 
statistics they collect and disseminate on international services trade. It recommends a number of core and 
additional data items to be implemented over time, and in so doing recognizes the constraints under which 
statistical compilers operate and the need not to burden data providers unduly. In order to facilitate countries’ 
adoption of this framework, it builds on existing standards for compilation, in particular the fifth edition of the 
International Monetary Fund’s Balance of Payments Manual (BPM5) and the System of National Accounts, 1993 
(1993 SNA).  
Following the General Agreement on Trade in Services and to clarify how trade in services takes place,   the  
Manual describes four modes through which services may be traded internationally. It does so by considering the 
location of both the supplier and consumer of the traded service. The first of these modes, mode 1 or cross-border 
supply, applies when suppliers of services in one country supply services to consumers in another country without 
either supplier or consumer moving into the territory of the other. Mode 2, consumption abroad, describes the 
process by which a consumer resident in one country moves to another country to obtain a service. Further, 
enterprises in an economy may supply services internationally through the activities of their foreign affiliates 
abroad. This mode of supply, mode 3, is called commercial presence. The last of these modes of supply, mode 4 or 
presence of natural persons describes the process by which an individual moves to the country of the consumer in 
order to provide a service, whether on his or her own behalf or on behalf of his or her employer.  
The  Manual is innovative in that it takes at once a broader and a more detailed view of international trade in 
services than the conventional balance of payments perspective set out in BPM5. It provides a more detailed 
classification of services delivered through conventional trade between residents and non-residents than is 
contained in BPM5, includes a treatment of local delivery of services through a foreign commercial presence and 
takes a first step toward linking these two systems. Links to existing statistical frameworks are described and 
correspondences provided between the classifications used in the Manual.  
The BPM5 framework contains, amongst other things, recommendations for the definition, valuation, 
classification, and recording of resident/non-resident trade in services. Building on this framework, the Manual 
recommends extending the BPM5 classification of transactions by type of service to provide more detail through 
the  Extended Balance of Payments Services Classification (EBOPS). Correspondence tables showing the 
relationship between EBOPS, the Central Product Classification, Version 1.0 and the GNS/W/120 list (the list of 
services for trade negotiations under the General Agreement on Trade in Services) are included in annex III to the 
Manual. These tables assist in the provision of clear definitions of the various components of EBOPS. Except for 
small differences in the treatment of construction services,  the recommendations contained in the Manual  are 
consistent with BPM5. Thus, a country’s balance of payments statistics will provide many of the data that are 
needed to implement the recommendations relating to the measurement of resident/non-resident trade in services. 
Recommendations are made in the Manual on the attribution of resident/non-resident transactions across the modes 
of supply. 
As well as providing services by way of trade between residents and non-residents of an economy (measured in 
balance of payments statistics), enterprises in an economy may also supply services internationally through the 
activities of foreign affiliates abroad. The Manual recognizes this in its discussions on and recommendations for 
foreign affiliate trade in services (FATS) statistics. Included are recommendations on (a) the selection of foreign 
affiliates to be covered (which follows the definition of foreign-controlled enterprises used in the 1993 SNA);
∗
 (b) 
the attribution of FATS statistics (including a discussion on attribution by activity and by product); and (c) the 
variables to be compiled. While this is a less well-developed area statistically than the balance of payments 
                                                 
∗
   This is implemented statistically as covering affiliates that are majority-owned by a direct investor. 

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statistics, some FATS statistics for foreign-owned affiliates in the compiling economy may be found in, or derived 
from, existing statistics on domestic production, including national accounts statistics based on the 
recommendations of the 1993 SNA.  
The recommended basic FATS variables discussed in the Manual are: sales (turnover) and/or output, 
employment, value added, exports and imports of goods and services, and number of enterprises. Additional FATS 
variables considered relevant are also identified. The definitions of these variables are drawn from the 1993 SNA.  
For both resident/non-resident trade in services and foreign affiliate trade in services, the Manual recommends 
the compilation of statistics on trade by partner country. 
One area in which the Manual moves beyond existing statistical frameworks is the area where services in one 
country are provided by individuals (or natural persons) from another country moving to the first country on a 
non-permanent basis to take up employment. This area, which is part of mode 4, is one in which countries make 
commitments in trade agreements, and while some statistics on associated payments are included in balance of 
payments statistics, there is a need for further development of statistics in this area. Consequently, there is only 
limited discussion on, and recommendation for, compiling relevant statistics on the movement of natural persons in 
the main text of the Manual. The subject is discussed more fully in annex I, including the relevance of currently 
available statistics on the employment and work related movements of foreign nationals. 
Although it is an important first step, the Manual addresses to a limited extent  the inherent difficulties 
experienced by compilers in collecting data on trade in services. In addition, the nature of trade in services is 
changing in response to new technologies. The Manual  therefore  identifies the need for further work in a number 
of areas. These include compilation guidance, improving the classification and descriptions of certain services such 
as internet related, environment related and tourism related services, and the development of a framework for the 
measurement of the movement of natural persons and associated payments in relation to trade in services. In a 
longer time frame, it is desirable that the links be reviewed and strengthened between classifications of services 
activity and products on the one hand, and classifications of international trade in services between residents and 
non-residents on the other.  
The  Manual  proposes a phased approach to the implementation of its recommendations so that countries, 
including those that are beginning to develop statistics on international trade in services, can gradually begin to 
structure available information in line with this new international standard framework. The sequence of  
recommended elements, of which a subset are designated as core recommendations, takes into account the relative 
ease that many compilers may find in their implementation.  However, the order is quite flexible, so that countries 
can meet the priority needs of their own institutions. Full implementation - to be seen as a long-term goal - would 
represent a considerable increase in the detail of information available on trade in services.  
 

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3 
I.