Services by Mode of Supply
Services distributed by the mode of supply is the identification of the way how the services were traded. It is important to assess not only the individual services sectors, but also the services how they were traded or each service sector assessed by the modes of supply. This is the extended scope of international trade in services, also mentioned as international supply of services.
For example, it would be useful to know the volume of trade between two countries in legal services, that takes place through cross-border supply, consumption abroad, commercial presence or presence of natural persons, both by monetary, but also by non-monetary indicators (number of persons).
The General Agreement on Trade in Services (GATS), the first multilateral agreement to cover trade in services defines trade in services as the supply of a service through any of four modes of supply:
- cross-border supply: from the territory of one country into the territory of another country;
- consumption abroad: in the territory of one country to the service consumer of other country;
- commercial presence: by a service supplier of one country, through commercial presence in the territory of other country. The foreign affiliates trade (FATS) statistical framework is designed to provide information on the activity of enterprises located in foreign markets;
- presence of natural persons: by a service supplier of one country, through presence of natural persons of a country in the territory of any other country.
Since the commitments under the GATS are specified according to the four modes of supply, trade statistics for each service sector should ideally also be available according to each of the modes of supply.
Services Trade by Enterprise Characteristics (STEC)
Who are the services traders? Are the traders foreign owned and what is their size class by number of employees?
Services Trade by Enterprise Characteristics (STEC) aims to answer to those questions measuring international trade of services by using statistics from different data sources. This enables to present the same statistical data in the different way.
STEC data serve the following purposes:
- analyse the enterprises involved in international trade in services;
- input for the compilation of multi-regional input-output tables;
- enable deeper analysis on trade in value added.
Statistics on international trade in services’ currently provide the monetary value of trade in services, broken down by service category (e.g. computer services or legal services) and by partner country. These statistics are produced from the transactions recorded under the country’s balance of payments, which captures all transactions that take place between an economy’s residents and non-residents.
Linking the two datasets (the business register and services traders) at business level, using a common identifier (the business register code) has allowed a cross-classification to be created, providing us with new data on businesses involved in trade in services.
By reusing data that already exists, we are getting more value from these data. Using data from another source at the same time allows us to draw different information out of the original data set. We are thus able to classify businesses either by the information available in the business register or by other known characteristics, in order to analyse trade in services by businesses of different types.
In STEC compilation method, there are tables that consist of two or more dimensions. The tables include information about by size class, ownership, activity sector and service category.
The first STEC results are available in a Statistics Explained article, see right hand column on this page.