Statistics Explained

EU international trade in other business services


Data extracted in March 2022.

Planned article update: March 2023.

Highlights

In 2020, the biggest contributor to exports from the EU to the rest of the world in ‘Other business services’ was the sub-item ‘Technical, trade-related and other business services’, while for imports from the rest of the world to the EU, the main contributor was the sub-item ‘Research and development services’.
In 2020, the United States was the EU's main partner for imports and exports of R&D services as well as Professional and management consulting services; the United Kingdom was the EU's main partner for imports and exports of Technical, trade-related, and other business services.
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EU trade in other business services with extra-EU, 2010-2020

The role of trade in services in EU international trade has been growing steadily over the last decade and plays a major role in modern economies in an increasingly interlinked and globalised world. International trade in services flows show the transactions between residents and non-residents according to twelve main service categories of the Extended Balance of Payments Services classification (EBOPS 2010). 'Other business services' is the largest of the twelve service categories, accounting for 27 % of total services exports to extra-EU and 41 % of total services imports from non-EU countries in 2020. The third largest category is transport services', presented in a separate article.

This article focuses on the structure and evolution of the EU's international trade in 'other business services' with extra-EU countries. The 'other business services' category contains three sub-categories[1], namely: research and development (R&D) services, professional and management consulting services, and technical, trade-related and other business services. These sub-categories are presented in this article.


Full article

General overview

Figure 1 shows the evolution of the time series for 'other business services' from 2010 to 2020.EU imports of 'other business services' have been higher than exports for all years in the period 2010 to 2020 except in 2014. This results in a consistent negative balance in all years except for 2014. From 2010 until 2019, imports of other business services have been constantly increasing with the biggest increase recorded in 2019 (42 %). During the same period, exports have also been constantly increasing, but at a more modest rate. In 2020 however, imports and exports have decreased by 10 % and 6 % respectively.

Figure 1: EU trade in other business services with extra-EU, 2010-2020 (€ 1 000 million)
Source: Eurostat (bop_its6_det)

Figures 2 and 3 show the contributions of the three sub-categories of 'other business services' to imports and exports for 2010-2020. The biggest contributor until 2018 to imports was the sub-category of technical, trade-related and other business services, however in 2019 and 2020 the sub-category research and development services was the biggest one for imports. For exports the sub-category of technical, trade-related and other business services continues to be the biggest one.


Figure 2: Contributions of other business services sub-categories to imports of EU, 2010-2020 (€ 1 000 million)
Source: Eurostat (bop_its6_det)


Figure 3: Contributions of other business services sub-categories to exports of EU, 2010-2020 (€ 1 000 million)
Source: Eurostat (bop_its6_det)

In 2020, the United States was the EU's main partner for imports and exports of 'other business services' (27.4 % of imports and 22.6 % of exports). It was followed closely by the United Kingdom with 18.3 % of the imports and 20.2 % of exports, and then by Switzerland with 5.0 % of the imports and 13.7 % of the exports. (see Figure 4).

Figure 4: Main trading partners' share of EU in other business services, 2020
Source: Eurostat (bop_its6_det)

Research and development (R&D) services

R&D[2] services consist of services associated with basic research, applied research and experimental development of new products and processes.

The evolution of R&D services between 2010 and 2020 is shown in Figure 5. Imports were marginally higher than exports in the period 2010 to 2014. Imports then overtook exports with a big increase in 2015 and 2016, resulting in a big drop in the balance that pushed it into a deficit. The deficit slighly decreased in 2017 and 2018. However, in 2019 imports increased significantly, resulting in a big increase in the deficit, as in the same period (2017 to 2019) exports increased only marginally. In 2020 imports decreased again.

Figure 5: Evolution of EU trade in research and development services for EU, 2010-2020 (€ 1 000 million)
Source: Eurostat (bop_its6_det)

In 2020, the EU's largest trade partner for R&D services was again the United States, accounting for 25.2 % of imports and 39.8 % of exports. The United Kingdom came second for imports with 5.3 % followed by China with 2.8 %. Switzerland was the second largest partner for exports with 16.9 %, followed by the United Kingdom with 10.1 % (see Figure 6).

Figure 6: Main trading partners' share of EU in R&D services, 2020
Source: Eurostat (bop_its6_det)

Professional and management consulting services

Professional and management consulting services[3] comprise:

(a) legal services, accounting, management consulting, managerial services and public relations services; and

(b) advertising, market research and public opinion polling services.

Imports of professional and management consulting services exceeded exports each year between 2010 and 2020, resulting in a deficit, as shown in Figure 7. From 2010 until 2019, both imports and exports continued increasing at a more or less constant, moderate rate. In 2020 however, imports and exports decreased.

Figure 7: Evolution of EU trade in professional and management consulting services for EU, 2010-2020 (€ 1 000 million)
Source: Eurostat (bop_its6_det)

In 2020, the United States was the EU's largest trading partner for imports of professional and management consulting services with 33.6 % (see Figure 8); The United Kingdom came second with 26.8 % followed by Switzerland with 7.3 %. As regards exports, the largest partner was the United States with 26.1 %, followed by the United Kingdom with 25.1 % and Switzerland with 16.3 %.

Figure 8: Main trading partners' share of EU in professional and management consulting services, 2020
Source: Eurostat (bop_its6_det)

Technical, trade-related and other business services

Technical, trade-related and other business services[4] comprise:

  • architectural, engineering and other technical services;
  • waste treatment and depollution, agricultural and mining services;
  • operating leasing services, trade-related services and
  • other business services such as:
distribution services related to water, steam, gas and other petroleum products and the supply of air-conditioning, placement of personnel, security, photographic services, publishing, real estate, etc.

Technical, trade-related and other business services represent the largest subcategory of other business services.

The evolution of technical, trade-related and other business services trade since 2010 is shown in Figure 9. In 2020, for the first time since 2010, imports exceeded exports of technical, trade-related and other business services. From 2010 until 2019, imports and exports have continued increasing except in 2020 where the exports have decreased for the first time, resulting in a negative balance.

Figure 9: Evolution of EU trade in technical, trade-related, and other business services for EU, 2010-2020 (€ 1 000 million)
Source: Eurostat (bop_its6_det)

In 2020, the United Kingdom was the EU's largest trading partner for imports of technical, trade-related and other business services with 26.8 % ; the United States was second with 25.4 % and Switzerland came third with 7.1 % of the total EU imports. As regards exports, the largest partner was the United Kingdom with 21.2 % followed by the United States with 13.7 %, and Switzerland with 10.8 % of the total EU exports (see Figure 10).

Figure 10: Main trading partners' share of EU in technical, trade-related, and other business services, 2020
Source: Eurostat (bop_its6_det)

Data sources

EU data on trade in other business services come from the Eurostat reference database on International Trade in Services and are prepared in accordance with BPM6, the current balance of payments methodology. The data are updated annually. They have been available since 2010 for EU aggregates, all EU Member States and non-EU countries (European Free Trade Association (EFTA), candidate countries and other countries). Pre-2010 data are also available in the Eurostat reference database but are prepared in accordance with the previous balance of payments methodology (BPM5).

Statistics on the EU's trade with the extra-EU are calculated as the sum of trade conducted by the 27 Member States and the EU institutions (except the European Central Bank and European Stability Mechanism) with the countries outside the EU (no flows within the EU are taken into account).

Context

International trade in services makes up part of the current account of the balance of payments and covers the transactions between the residents and non-residents of a country during a given period. International trade in services follows the BPM6 methodology, which uses 12 main service categories, one of which is other business services. EU trade in services with the extra-EU countries has been on an increasing trend from 2010 to 2019 for both imports and exports.

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Notes

  1. As defined by the Balance of Payments Manual 6 (BPM6) par. 10.147
  2. As defined by the Balance of Payments Manual 6 (BPM6) par. 10.147
  3. As defined by the Balance of Payments Manual 6 (BPM6) par. 10.149
  4. As defined by the Balance of Payments Manual 6 (BPM6) par. 10.151