Trade in Services or Services in Trade? Metka Stare, Faculty of Social Sciences and IMAD

1. Trade in Services or Services in Trade?Metka Stare, Faculty of Social Sciences and IMAD 14. Statistični dnevi 2004, Radenci, 8-10.november 2004

2. Common perception of services Services Goods GDP 70% 30% Trade 20% 80% Further tertiarisation of economy threatens its competitiveness due to stagnant character of services trade???

3. Causes of dichotomy • Nature of services and low tradability, conceptual differences • Globalisation and FDI growth • Increased links between goods and services • Underestimation of trade in services (narrow definition)

4. Defining trade in services (1) • Traditional approach: trade of services between residents and non-residents • Broad approach introduced by the GATS: 4 modes of supply Trade in services includes sales of majority-owned affiliates

5. Defining trade in services (2) • Manual on Statistics in ITS (2002)- gradual implementation • Some elements of services trade escape statistical recording (intra-firm trade) • Indirect trade in services (analytical category)

6. Multi-dimensional framework of services in trade

7. SLOVENIA (1) Traditional (narrow) definition of trade inservices: balance of payments data % of services in total export 1996 20,4% 2003 17,8%

8. SLOVENIA (2) Broad definition of trade in services includes foreign affiliates sales of services: business statistics data BoP data FATS Imports of services • 27% 73% • 17% 83%

9. SLOVENIA (3) Indirect trade in services embedded in goods and services: input-output table data Indirect exports Services Goods 2000 47% 53% 1993 44% 56% Services in trade are not stagnant!

10. Message Evolution of dimensions of trade in services due to: -globalisation, FDI, ICT introduction, -increased interlinkages between services and goodsproduction Need for improved data and analysis of services trade to better understand andevaluatethe role played byservices in trade and development