International trade in services by partner
Data extracted in May-June 2017
Planned article update: June 2019
In 2015, more than one quarter of EU exports of services were destined for the US, while almost one third of EU imports of services originated in the US.
The EU's largest trade surplus for services in 2015 was recorded with Switzerland.
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.
Focus on EU-28 trade in services by partner
In 2015, more than one quarter of EU-28 exports of services were destined for the United States …
The EU-28 exported services to non-member countries that were valued at EUR 832 billion in 2015. Figure 1 shows that the EU-28’s main export market was the United States, which accounted for more than one quarter (27.2 %; EUR 226 billion) of the EU’s exports. The next largest shares were recorded for Switzerland (14.0 %), offshore financial centres (5.1 %) and China (4.5 %). The aggregate for offshore financial centres includes European countries such as Andorra, the Isle of Man or 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 almost one third of EU-28 imports of services originated in the United States
Imports of services from non-member countries into the EU-28 were valued at EUR 686 billion in 2015. Figure 2 shows that the United States was, by far, the principal origin of extra-EU imports, accounting for almost one third (31.0 %; EUR 213 billion) of the EU’s imports. The next highest share was recorded for offshore financial centres (11.7 %), while Switzerland (10.6 %) was the only other partner to record a double-digit share of the total.
During the period 2010-2015, a growing proportion of the EU-28’s exports of services was destined for the United States, its share of the total rising from 24.6 % to 27.2 % (up by 2.5 percentage points); the relative importance of EU-28 exports to China, Singapore and (other) offshore centres also increased. A comparable analysis for the development of services imports reveals there was a greater shift in the structure of EU-28 trade between 2010 and 2015, as the proportion of EU-28 imports of services that originated in offshore financial centres rose from 7.0 % to 11.7 %. This analysis also confirms a pattern of increasing concentration, insofar as a growing proportion of the EU-28’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-28’s largest trade surplus for services in 2015 was recorded with Switzerland
In 2015, the EU-28’s largest trade surplus for services was recorded with Switzerland (EUR 44 billion); the EU-28 also ran sizeable surpluses for trade in services — within the range of EUR 10-14 billion — with Russia, the United States, Japan, Norway, China and Australia. Of the 29 trading partners shown in Figure 3, the EU-28 ran a deficit for trade in services with just six. By far the largest was recorded for trade with offshore financial centres (EUR 34 billion), while the other principal trading partners that were net exporters of services to the EU-28 included Turkey, Thailand, Morocco, Hong Kong and Egypt.
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 pertaining to individual EU Member States; note that the data presented covers total trade (in other words, intra- and extra-EU trade flows).
A relatively high proportion of the EU-28’s 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 10 of the EU Member States in 2015; half of these shared a border with Germany.
The United Kingdom was the largest export market for services from seven other EU Member States, while the United States was the biggest market for services exported from Germany, the Netherlands and the United Kingdom. Seven other trade partners (no data for Spain) each appeared once in the ranking of principal export markets; each of these was characterised by their close proximity to the reporting country. Indeed, six out of the seven shared a border, the only exception being Finland, which was the principal export market for services leaving Estonia (they share a maritime border).
Table 2 shows a similar set of information for imports. In 2015, Germany was the principal origin of services imports for eight of the EU Member States, followed by the United States (which was the principal origin of imports for five Member States) and the United Kingdom (which was the main origin of imports for four of the EU 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, for example, the Baltic Member States. 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; most notably Ireland, Malta, the Netherlands and the United Kingdom.
In 2015, 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 section 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 29 partner countries. Many of the largest bilateral surpluses and deficits for trade in services concern a range of countries that are considered among the world’s leading financial centres — for example, Ireland, Luxembourg, the Netherlands and the United Kingdom, as well as Switzerland and offshore financial centres.
In 2015, the biggest trade surplus for services was recorded between the United Kingdom and the United States (EUR 36.9 billion). This was more than three times the size of the next highest trade surplus, as services exports exceeded services imports by EUR 11.0-12.0 billion for trade between: the United Kingdom and Switzerland; Ireland and the United Kingdom; and the Netherlands and Ireland.
Box 3.3 — 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 the Netherlands recorded a trade surplus for services with Ireland valued at EUR 11.9 billion, while the Irish trade deficit for services with the Netherlands was valued at EUR 15.4 billion.
In 2015, the largest bilateral trade deficits for services involved Ireland
As already noted, Ireland accounted for the highest share of the EU’s imports of services from non-member countries in 2016; 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 2015: it confirms that Ireland had the two largest bilateral trade deficits for services — the Irish trade balance with offshore financial centres was EUR -33.3 billion, while that with the United States was EUR -19.5 billion. The next largest deficits for trade in services concerned trade between the Netherlands and offshore financial centres (EUR -16.7 billion), trade between Ireland and the Netherlands (EUR -15.4 billion) and trade between the Netherlands and the United States (EUR -12.6 billion).
Source data for tables and graphs
- Balance of payments, see:
- Balance of payments - International transactions (BPM6)
- Balance of payments, see:
- Balance of payments - International transactions (BPM6)
- International trade in services, geographical breakdown (BPM6)
- Balance of payments
- Balance of payments - international transactions (BPM6) (ESMS metadata file — bop_6_esms)
- International trade in services