SADC Workshop on Trade in Services Statistics The GATS and relevant statistical frameworks Gaborone, Botswana, 28-31 January 2014
The GATS System of rules covering international trade in services - Measures affecting trade in services at all government levels - Covers all services (except: air traffic rights and services supplied in the exercise of governmental authority) - Identifies 4 modes for supplying services - Cross-border supply - Consumption abroad - Commercial presence - Presence of natural persons - Applies to product (service) and producer/distributor 2 (services supplier)
The GATS GATS Pillars - Set of unconditional general obligations - Specific commitments (Schedules) Annexes on specific issues Commitments under GATS By services sectors By mode of supply 3
The Services Sectoral Classification List GNS/W/120 1. Business services 2. Communication services 3. Construction and related engineering services 4. Distribution services 5. Educational services 6. Environmental services 7. Financial services 8. Health-related and social services 9. Tourism and travel-related services 10. Recreational, cultural and sporting activities 11. Transport services 12. Other services not included elsewhere 4
The GATS Modes of Supply (1/2) COUNTRY A Mode 1: Cross-border Consumer Service supply The service crosses the border COUNTRY B Service supplier Mode 2: Consumption abroad Consumer The consumer is abroad Consumer Service supply Service supplier Mode 3: Commercial presence Service supply Establish commercial presence $ $ $ $ $ Consumer Consumer in C Commercial presence Company 5
The GATS Modes of Supply (2/2) COUNTRY A COUNTRY B Mode 4: Presence of natural persons Service supply A self-employed goes to country A Natural person Consumer An employee is sent by a company of country B Service Mode 3 supply supply Controlled affiliate intra-corporate transferee Juridical person 6
The 4 modes of supply: Education services (example) Mode 1: Online courses Mode 2: Study abroad Mode 3: Foreign-owned university Mode 4: Self-employed teacher goes to work temporarily in a foreign country 7
Why are statistics on international trade in services needed in the WTO? Decision-making Market access Negotiate Compare Quantify Dispute settlement Useful for economic analysis also for the private sector 8
in particular for The assessment of trade in services under the GATS (Article XIX) The Regional Trade Agreements Transparency mechanism (WT/L/671) BOP data on trade in services by sector/subsector, by partner Trade by foreign affiliates by partner and industry WTO Council for Trade in Services Data on foreign direct investment by partner and by activity Data on movement of natural persons by services sector/subsector, by partner as from 3 years before entry into force of the agreement and subsequent years 9
Where is the problem? Goods cross-border response: - International Merchandise Trade Statistics (IMTS), Rev.3 - Compilers Manual Services mode 1: cross-border mode 2: consumption abroad mode 3: commercial presence mode 4: presence of natural persons response: - Manual on Statistics of International Trade in Services (MSITS) - Compilation guide 10
Interagency Task Force on Statistics of International Trade in Services Published in 2010 11
Why a revised Manual? Incorporate BPM6 and SNA 2008 revisions ISIC Rev.4, CPC 2.0... Need guidance on measuring GATS Modes of Supply, in particular Mode 4 New recommendations on activities of foreign affiliates 12
BPM6 - General observations Basic BPM5 framework retained. BPM6 double in length than BPM5! Less changes than from BPM4 to BPM5. More elaborated on services in particular In close co-operation with the Interagency Task Force on Statistics of International Trade in Services 13
Recommendations on Foreign Affiliates in MSITS 2010 Foreign Affiliates statistics closely linked with Foreign Direct Investment (FDI) In line with international standards SNA 2008 (National Accounts) BPM6 (BOP) Going further than these standards OECD Benchmark Definition of FDI, 4th edition OECD Handbook: globalization + economic analysis Eurostat Recommendations Manual on the Production of Foreign AffiliaTes Statistics (FATS) MSITS 2010: supply of services through commercial presence 14