International trade in services by partner
Data extracted in June 2022.
Planned article update: July 2023.
In 2020, 20.2 % of EU exports of services were destined for the United Kingdom, while 29.8 % of EU imports of services originated in the United States.
The EU’s largest trade surplus for services in 2020 was recorded with Switzerland (€47.6 billion).
Globalisation patterns in EU trade and investment is an online Eurostat publication presenting a summary of recent European Union (EU) statistics on economic aspects of globalisation, focusing on patterns of EU trade and investment.
Trade intensity is thought to be related to geographic distance: this may be particularly true for some services due to their intangible, non-transportable nature which restricts opportunities for exchange. Alongside geographical distance, there are other barriers which impact/prevent trade in services, for example, linguistic or cultural ‘distance’. On the other hand, digitalisation and new technologies have permitted new business models for delivering services across borders and over larger distances. This article looks in more detail at the EU’s principal partners for international trade in services.
The analyses of trade by partner are based on a fixed list of countries: Argentina, Australia, Brazil, Canada, China, Egypt, Hong Kong, India, Indonesia, Israel, Japan, Malaysia, Mexico, Morocco, Nigeria, Norway, Russia, Saudi Arabia, Singapore, South Africa, South Korea, Switzerland, Taiwan, Thailand, Turkey, Ukraine, the United Arab Emirates, the United Kingdom and the United States, as well as offshore financial centres.
Focus on EU trade in services by partner
In 2020, 20.2 % of EU exports of services were destined for the United Kingdom …
The EU exported services to non-member countries that were valued at €910 billion in 2020. Figure 1 shows that the EU’s main export markets were the United Kingdom and the United States, which each accounted for approximately one fifth (20.2 % and 20.1 %; €184 billion and €183 billion) of the EU’s exports. The next largest shares were recorded for Switzerland (11.6 %), followed by China (5.2 %), Japan (3.0 %) and offshore financial centres (2.7 %). The aggregate for offshore financial centres includes European countries such as Andorra, the Isle of Man and Liechtenstein, as well as financial centres that are further afield – principally these are located in and around the Caribbean, for example Bermuda, Panama or the Virgin Islands; note that for the purpose of this publication, data for Hong Kong and Singapore are shown separately and have been systematically removed from the aggregate covering offshore financial centres.
… while 29.8 % of EU imports of services originated in the United States
Imports of services from non-member countries into the EU were valued at €878 billion in 2020. Figure 2 shows that the United States was, by far, the principal origin of extra-EU imports, accounting for approximately three tenths (29.8 %; €261 billion) of the EU’s imports. The next highest shares were recorded for the United Kingdom (18.4 %) and offshore financial centres (12.9 %); none of the remaining partners covered in Figure 2 had a double-digit share.
During the period from 2010 to 2020, a growing proportion of the EU’s exports of services was destined for the United States, its share of the total rising from 17.9 % to 20.1 % (up by 2.2 percentage points); the relative importance of EU exports to China increased by 2.1 points, while Singapore, Hong Kong also saw their shares rise by more than 0.5 points.
A comparable analysis for the development of services imports reveals there was a greater shift in the structure of EU trade between 2010 and 2020, as the proportion of EU imports of services that originated in offshore financial centres rose from 5.5 % to 12.9 % (up 7.4 percentage points). The relative importance of EU imports that originated in the United States increased by 5.6 points, while Singapore and India were the only other countries (among those selected) to register an increase of at least 0.5 points. This analysis also confirms a pattern of increasing concentration, insofar as a growing proportion of the EU’s trade in services was with its principal trading partners (which were predominantly developed world economies). This is an interesting distinction when compared with international trade in goods, where globalisation has resulted in a diversification of trading partners (as emerging and developing countries have captured market shares).
The EU’s largest trade surplus for services in 2020 was recorded with Switzerland
In 2020, the EU’s largest trade surplus for services was recorded with Switzerland (€48 billion); the EU also ran sizeable surpluses for trade in services – within the range of €10–22 billion – with the United Kingdom, China, Japan, Russia and Australia. Of the 30 specific trading partners shown in Figure 3, the EU ran a deficit for trade in services with just five. By far the largest deficits were recorded for trade with offshore financial centres (€88 billion) and the United States (€78 billion), while the other principal trading partners that were net exporters of services to the EU included Singapore, India and Morocco.
Focus on trade in services for individual EU Member States
Having examined extra-EU trade flows for services, this next section presents more detailed information relating to individual EU Member States. Note that the data presented for the Member States cover total trade (in other words, intra-EU and extra-EU trade flows), while the data for the EU as a whole concern extra-EU trade only.
A relatively high proportion of trade in services was between neighbouring countries
The top three partners for trade in services for each of the EU Member States are shown in Table 1 (for exports) and Table 2 (for imports). As the EU’s largest economy, and with its relatively central location, it is unsurprising to find that Germany was the leading export destination for trade in services among 15 Member States in 2020; five of these shared a border with Germany. The United States was the largest export market for services from five Member States (including both Germany and France), while the United Kingdom was the biggest export market for services from two Member States. Five other trade partners – France, the Netherlands, Finland, Sweden and Russia – each appeared once in the ranking of principal export markets. All but two of these were characterised by their close proximity to the reporting country; the exceptions were France as the leading export market for Portugal and Russia as the leading export market for Cyprus.
Table 2 shows a similar set of information for imports. In 2020, Germany was the principal origin of services imports for nine of the EU Member States, followed by the United States (which was the principal origin of imports for six Member States) and offshore financial centres (which was the main origin of imports for two of the Member States). As for exports, there were often high levels of trade in services between neighbouring countries and those which were culturally or linguistically aligned. Otherwise, it is interesting to note that offshore financial centres were also relatively important as an origin of services imports in several of the EU Member States, namely Greece, Cyprus, Ireland, Malta and Bulgaria.
In 2020, some of the largest bilateral surpluses and deficits for trade in services concerned a range of countries considered among the world’s leading financial centres
This article closes with an analysis of the largest bilateral trade surpluses and deficits for services (see Table 3); it is based on EU Member States as the reporting entity and a fixed list of 30 partner countries. Many of the largest bilateral surpluses and deficits for trade in services in 2020 concerned a range of countries that are considered among the world’s leading financial centres – for example, Ireland, Luxembourg, the United States, Switzerland, Singapore and (other) offshore financial centres.
In 2020, the biggest trade surplus for services was recorded by Ireland for its trade in services with the United Kingdom (€14.9 billion). There were two other bilateral trade surpluses for services that were valued at more than €10.0 billion: German trade with Switzerland (€11.6 billion) and Irish trade with Germany (€11.5 billion).
Asymmetries in trade
Bilateral trade asymmetries occur for both international trade in goods and international trade in services: they ensue when the exports reported by country A to country B do not match with the imports reported by country B from country A. These asymmetries may result from a number of issues, including: the classification of goods and services (particularly when bundled together); the use of different survey thresholds or estimation techniques; different practices employed for the first release and subsequent revision of data; the treatment of confidentiality; currency conversions.
In an increasingly globalised world these discrepancies can result in relatively large asymmetries, especially for those services which are characterised by intricate networks of capital and information flowing between several countries. An example of such an asymmetry is shown in Table 3, as Ireland recorded a trade surplus for services with Germany valued at €11.5 billion, while the German trade deficit for services with Ireland was valued at €9.6 billion.
In 2020, the two largest bilateral trade deficits for services were reported by Ireland
As noted in the overview article on trade in services, Ireland accounted for the highest share (27.6 %) of the EU’s imports of services from non-member countries in 2021; this may be expected to feed through into trade deficits with a range of partners. Detailed information on trade in services by partner is only available for 2020: it confirms that Ireland had the two largest bilateral trade deficits for services – the Irish trade deficit with offshore financial centres was €76.5 billion, while that with the United States was almost as large (€74.1 billion). These deficits overshadowed the others, with the next highest trade deficit for services recorded for trade between the Netherlands and the United States (€14.7 billion); all of the remaining deficits were less than €10.0 billion.
Source data for tables and graphs
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- Balance of payments – international transactions (BPM6) (ESMS metadata file – bop_6_esms)
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