World trade in services
Data extracted in July 2019.
Planned article update: July 2022.
Highlights
In 2018, the EU was the world’s largest exporter and importer of services.
In 2018, EU-28 extra-EU trade in services accounted for 29.7 % of the total value of trade in goods and services.
(%)
Source: Eurostat (bop_eu6_q) and International Monetary Fund (Balance of Payments and International Investment Position Statistics)
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.
Services are an increasingly important part of the global economy and play a central role in each of the EU Member States. The services sector contributes considerably more (than the industrial economy) to gross domestic product (GDP) and employment within the EU-28, accounting for approximately three quarters of total economic activity. However, the global value of international trade in goods is three and a half times as high as that for trade in services. This imbalance in levels of international trade may be attributed, among others, to the intangible nature of services, for example:
- some services are non-transportable and can only be consumed at their point-of-sale requiring either producer or consumer to cross a border in order to be exported;
- many countries regulate areas like professional services — for example, the legal profession, tax consultants or accountants — which are bound by national legislation;
- there are a range of services (at least in Europe) which are largely supplied by the public sector, for example, health or education services and trade in these areas is often restricted;
- services cover a heterogeneous range of products/activities that are difficult to encapsulate within a simple definition, often these are tailored specifically to a client’s needs and so unlike goods, they have a tendency not to be homogeneous, mass-produced items; as such they are sometimes difficult to separate from the goods with which they may be associated or bundled.
Box 1 — Services trade statistics by modes of supply
Statistics on the international supply of services by mode of supply are being developed primarily to meet the needs of the General Agreement on Trade in Services (GATS) trade negotiators and analysts. Statistics are required to support negotiations and to monitor the impact of services trade agreements.
Services differ from goods in respect of the immediacy of the relationship between supplier and consumer. Many services are non-transportable, in other words they often require the physical proximity of supplier and customer (for example accommodation services).
Full article
International trade in services — overview
Statistics on international trade in services
The main methodological references used for the production of statistics on international trade in services are:
- the International Monetary Fund’s (IMF’s) Balance of Payments and International Investment Position Manual (BPM6);
- the IMF’s Balance of Payments and International Investment Position Compilation Guide (BPM6 CG);
- Eurostat’s BoP Vademecum reference document for the transmission of data on international trade in services;
- the United Nations’ Manual on Statistics of International Trade in Services (MSITS 2010);
- the extended balance of payments services classification (EBOPS 2010);
- GATS — General Agreement on Trade in Services;
- MSITS Compilers Guide 2010.
All of the international trade in services statistics presented in this online publication are based upon the BPM6 methodology, adopted by the EU Member States from reference year 2013 onwards. A time series exists starting in 2010 for the EU-28 aggregate as Eurostat have estimated missing values prior to 2013 when they have not been provided by Member States. Less detailed services data, used as components for the quarterly balance of payments are available for the EU-28 since 1999, with even longer time series available from some Member States.
Statistics on international trade in services provide the monetary value of such trade for three different modes of supply identified in the GATS (the first, second and fourth modes — see 'Box 1 — Four modes of service supply' above). As such, the information presented in this section excludes services provided by foreign affiliates (mode 3) to other economies, as they are considered non-residents in the compiling country/economic area. The data are produced from transactions recorded under a country’s balance of payments (based on the trade that takes place between an economy’s residents and non-residents).
In 2018, the EU-28 was the world’s largest exporter and importer of services
The EU-28 is the world’s largest trader of services: in 2018, its exports of services were valued at EUR 919 billion and its imports at EUR 728 billion. Based on 2017 data for world trade in services, the EU-28 accounted for more than one quarter (25.5 %) of global exports and one fifth (20.2 %) of global imports. For comparison, the shares of the United States were 19.8 % for exports and 13.5 % of imports, while those for China were 5.3 % for exports and 11.7 % for imports (see Table 1).
Source: Eurostat (bop_its6_det) and International Monetary Fund (Balance of Payments and International Investment Position Statistics)
The United States ran the largest trade surplus for trade in services among the leading trading nations that are shown in Table 2 — some EUR 220 billion in 2018— while the EU-28 had the second largest surplus (EUR 190 billion); aside from these, there were only three other countries among those shown in Table 2 that recorded trade surpluses for international trade in services in 2018, namely, India, Hong Kong and Turkey.
The highest cover ratios — the value of exports divided by the value of imports, expressed as a percentage — for trade in services were recorded for Turkey (209.8 %) and India (164.5 %), suggesting that the relative importance of service exports was particularly high for each of these economies, in particular, transport services, travel services and personal, cultural and recreational services in Turkey and telecoms, computer and information services in India.
China had a sizeable trade deficit for services in 2018
By contrast, the biggest deficit for international trade in services was recorded by China (EUR 247 billion in 2018), as the value of its services exports (EUR 198 billion) was less than half the value of its imports (EUR 445 billion); this trade gap was also depicted through the value of the Chinese cover ratio for services (44.4 % in 2018), which was the lowest among the 15 countries/geographical aggregates for which data are shown.
Source: Eurostat (bop_its6_det) and International Monetary Fund (Balance of Payments and International Investment Position Statistics)
In 2018, EU-28 international trade in services accounted for 29.7 % of the total value of trade in goods and services — this share has been rising in recent years
Figure 1 provides an alternative analysis of aggregate figures for total services, presenting the relative importance of international trade in services compared with the overall value of trade in goods and services. In 2018, services accounted for an average share of 22.4 % of the world’s trade in goods and services; this could be compared with a share of 19.6 % some eight years earlier, confirming that services were a growing part of world trade.
Within the EU-28, the relative share of services in total trade for goods and services also rose between 2010 and 2018, from 26.8 % to 29.7 %, as international transactions for services became increasingly important to the performance of the EU economy. Using this same measure, the relative importance of services in total trade for goods and services grew at a similar pace (as in the EU-28) in India, and at a quicker pace in Japan, Australia, China and most notably Singapore. By contrast, the share of services in total trade fell modestly between 2010 and 2018 in Turkey and South Africa, and somewhat more strongly in Hong Kong and South Africa; these were the only countries to record a contraction in the share of services.
(%)
Source: Eurostat (bop_eu6_q) and International Monetary Fund (Balance of Payments and International Investment Position Statistics)
Between 2010 and 2018, China recorded the fastest growth for trade in services
During the period from 2010 to 2018, the value of EU-28 exports of services increased every year apart from a very small decrease in 2016, rising from EUR 567 billion in 2010 to EUR 919 billion in 2018 (an overall increase of 62.1 %).
During the same period, the value of EU-28 imports of services grew between 2010 and 2015, before dropping back in 2016 and 2017; a return to growth was observed in 2018. Overall, imports of services were 57.6 % higher in 2018 than in 2010 (see Figure 2).
Some of the EU’s global competitors reported even faster rates of growth for the value of their international trade in services. Nowhere was this more apparent than in China, as imports were more than four times as high in 2018 as in 2010 while the value of services exports were more than twice as high; services exports from Singapore also doubled during this period, while such exports from India nearly doubled.
(2010 = 100)
Source: Eurostat (bop_its6_det) and International Monetary Fund (Balance of Payments and International Investment Position Statistics)
International trade in services — by service category
Statistics on international trade in services by service category
Since the adoption of the sixth edition of the Balance of Payments and International Investment Position Manual (BPM6), international trade statistics for services have been grouped into 12 main categories: manufacturing services on physical inputs owned by others; maintenance and repair services; transport; travel; construction; insurance and pension services; financial services; charges for the use of intellectual property; telecommunications, computer and information services; other business services; personal, cultural and recreational services; government goods and services. Note that more detailed information is collected for 97 different services and that these data are available in Eurostat’s online database for more in-depth analyses.
In 2018, the EU-28 was particularly specialised in exporting other business services …
Table 3 shows the countries which recorded the highest levels of trade across each of the 12 main service categories in 2018. As for international trade in goods, the leading global exporters and importers of services, in absolute terms, are unsurprisingly some of the largest economies. The EU-28 had the highest value of exports for more than half of the service categories shown (7 out of the 12). However, the size of the export markets for these different services varied considerably: EU-28 exports of other business services (which include, among others, research and development services, legal, accounting, business and management consulting services, advertising, architectural, engineering, scientific and other technical services) were valued at EUR 234 billion (equivalent to 25.5 % of all EU-28 exports of services in 2018), while at the other end of the range, exports of construction services were valued at EUR 11.6 billion (1.3 % of the EU-28 total). The five other services where the EU-28 recorded the highest global levels of exports in 2018 were: transport services; telecommunication, computer and information services; insurance and pension services; manufacturing services; personal, cultural and recreational services.
The EU-28 recorded the highest value of imports for 8 out of the 12 service categories shown in Table 3, while China had the highest values for travel services and construction services and the United States for government goods and services as well as insurance and pension services. The EU-28’s imports were highest for other business services (EUR 213 billion), which accounted for 29.2 % of the total value of services imported into the EU-28 in 2018.
(billion EUR)
Source: Eurostat (bop_its6_det) and International Monetary Fund (Balance of Payments and International Investment Position Statistics)
… while emerging economies quite often recorded the highest export specialisation rates for various service categories
Table 4 provides an alternative analysis focusing on relative specialisation ratios. The highest ratios were quite often recorded for emerging economies and were spread across a broad range of economies. For example, China had the highest specialisation ratio in 2018 for manufacturing services (the relative share of this category in Chinese exports was more than five times as high as the average for the 15 leading trading nations/geographical aggregates for which this analysis is presented), whereas India was the most specialised country for exporting telecommunication, computer and information services (the relative share of this category in Indian exports was nearly four times as high as the average). Mexico (travel services; insurance and pension services) and the United States (maintenance and repair services; government goods and services) were the only countries to appear more than once in the ranking of the most specialised exporters for these 12 service categories.
(%, average = 100)
Source: Eurostat (bop_its6_det) and International Monetary Fund (Balance of Payments and International Investment Position Statistics)
The information presented in Table 5 reverses the focus of the analysis, detailing for each country/geographical aggregate where its relative trade specialisation (among the 12 service categories which form the basis of this analysis) lies. In 2018, the highest specialisation ratio for the EU-28, both for exports and for imports, was recorded for personal, cultural and recreational services. Results for some of the other countries confirm, for example, the relative importance of exports of: travel services from Australia and South Africa; financial services from Hong Kong; telecommunication, computer and information services from India; or manufacturing services from China.
(%, average = 100)
Source: Eurostat (bop_its6_det) and International Monetary Fund (Balance of Payments and International Investment Position Statistics)
Source data for tables and graphs
Data sources
Tables in this article use the following notation:
| Value in italics | data value is forecasted, provisional or estimated and is therefore likely to change. |
Direct access to
Metadata
- Balance of payments - international transactions (BPM6) (ESMS metadata file — bop_6_esms)
Further methodological information