- International Monetary Fund
- Published Date:
- March 2003
DEPARTMENT OF ECONOMIC AND SOCIAL AFFAIRS STATISTICS DIVISION
Series M NO. 86
MANUAL on STATISTICS of INTERNATIONAL TRADE in SERVICES
Geneva, Luxembourg, New York, Paris, Washington, D.C., 2002
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International Monetary Fund
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Copyright © 2002
United Nations, European Commission, International Monetary Fund, Organisation for Economic Co-operation and Development, United Nations Conference on Trade and Development and World Trade Organization
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The Manual on Statistics of International Trade in Services has been developed and published jointly by our six organizations, managed through the mechanism of an inter-agency task force.
The Manual sets out an internationally agreed framework for the compilation and reporting of statistics of international trade in services in a broad sense. It addresses the growing needs, including those of international trade negotiations and agreements, for more detailed, more comparable and more comprehensive statistics on this type of trade in its various forms. The recommendations, which will be promoted by our six organizations, will enable countries to progressively expand and structure the information they compile in an internationally comparable way. The Manual conforms with and explicitly relates to the System of National Accounts 1993 and the fifth edition of the International Monetary Fund’s Balance of Payments Manual.
The Manual has benefited from strong cooperation among the international organizations, the advice of specialist consultants, the invaluable input of a large number of member countries’ experts and the many comments received during the worldwide review conducted by the United Nations and the International Monetary Fund in 1999-2000. It is intended for use by national and international agencies, and we commend it to countries for progressive implementation, taking into account their national information needs, priorities and resources.
United Nations Statistics Division
Statistical Office of the European Communities
Carol S. Carson
International Monetary Fund
Chief Statistician and Director of the Statistics Directorate
Organisation for Economic Co-operation and Development
United Nations Conference on Trade and Development
Director of the Statistics Division
World Trade Organization
The Manual on Statistics of International Trade in Services is the result of a wide-ranging and transparent process. It has been jointly produced by the organizations that participate in the Interagency Task Force on Statistics of International Trade in Services authorized by the United Nations Statistical Commission. It has benefited from strong cooperation among the six participating agencies, the sound advice of national experts and specialist consultants, and valuable contributions and comments from statistical compilers, trade negotiators, representatives of the business community, policy makers and analysts in all regions of the world and in international agencies.
The Task Force was established by the Statistical Commission in 1994. Its mandate was to strengthen cooperation among international organizations; encourage the development of international concepts, definitions and classifications; and promote the availability, quality and international comparability of international trade-in-services statistics. It was established in response to a growing demand from governments, businesses and analysts for more and better internationally comparable data on services trade, including those data needed in support of international negotiations and agreements. In view of the wide gap between statistical needs and available data, the work of the Task Force was considered a long-term exercise.
The Task Force consists of individuals representing the Organisation for Economic Co-operation and Development (OECD), which acts as the Convenor, the Statistical Office of the European Communities (Eurostat), the International Monetary Fund (IMF), the United Nations Statistics Division, the United Nations Conference on Trade and Development (UNCTAD) and the World Trade Organization (WTO). The Task Force members, in their initial meetings, considered possible strategies for improving the statistics. They decided that the preparation of new international methodological recommendations, both innovative and consistent with existing statistical systems, was a prerequisite for achieving its goals. Thus, in early 1996, they began to develop the present Manual.
Over the next several years, the Task Force members, with assistance from national experts and specialist consultants, developed the outline structure of the Manual, undertook research and prepared successive drafts of chapters and appendices. During this period, the Task Force was chaired first by Derek Blades (OECD), through 1999, and then by William Cave (OECD). Other Task Force members who significantly contributed to the development and production of the Manual were Jean-Claude Roman (Eurostat); Margaret Fitzgibbon, Mahinder Gill and Neil Patterson (IMF); Ann Chadeau and Erwin Veil (OECD); Mary Chamie (United Nations Statistics Division); Jolita Butkeviciene (UNCTAD); Jürgen Richtering (UNCTAD and later WTO); and Guy Karsenty (WTO).
The United States Bureau of Economic Analysis (USBEA), the Deutsche Bundesbank, and Statistics Canada made available leading national experts to work with the Task Force. These experts were Obie Whichard (USBEA); Almut Steger (Deutsche Bundesbank), who participated in her capacity as Chair of the Group of OECD-Eurostat Experts in Trade in Services Statistics; and Shaila Nijhowne (Statistics Canada), who participated in her capacity as Chair of the Technical Subgroup on Classifications of the Expert Group on International Economic and Social Classifications. Statistics Canada made additional research contributions, especially through Hugh Henderson. The Task Force employed two specialist consultants, Julian Arkell and Jack Bame, who undertook initial research and prepared early drafts of the Manual. Eivind Hoffmann (International Labour Organization), Thomas Hatzichronoglou (OECD), Francis Ng (World Bank) and Antonio Massieu (World Tourism Organization) provided advice to the Task Force.
The successive drafts of the Manual were subject to an extensive consultation and review process with expert groups, national statistical agencies, national central banks, international agencies, trade negotiators and data users. Reviews of the Manual or its status were undertaken during meetings of the IMF Committee on Balance of Payments Statistics, the Group of OECD-Eurostat Experts in Trade-in-Services Statistics, and the OECD Globalization Experts of the Working Party on Statistics of the Committee on Industry and the Business Environment; at workshops for national statisticians that were conducted by the UN Statistics Division, in cooperation with the regional commissions and national host agencies, in the Latin America and the Caribbean, Asia and Pacific, and African regions; at Asia Pacific Economic Cooperation and WTO seminars; and at a meeting of the United Kingdom Royal Statistical Society. The Task Force benefited immensely from the advice received at these various meetings and seminars, and also from comments received from about 70 countries following a mail-out of the draft Manual by IMF and the UN Statistics Division in November 1999 to central banks and statistical agencies worldwide.
The Task Force wishes to express its appreciation to the members of the expert group that was convened in July 2000 to conduct the final external technical review of the draft Manual. The members of this group of statisticians, trade negotiators, business representatives and data users commended the Task Force for its work and made a number of recommendations to be addressed before submission of the Manual to the Statistical Commission for approval. The group was chaired by Peter Pariag (Trinidad and Tobago) and its other members were: Mr. Henderson, Ms. Nijhowne and David Usher (Canada); Quancheng Song (China); Wai-Yi Wang (Hong Kong, China); François Renard (France); Ms. Steger (Germany); Akhilesh C. Kulshreshtha (India); Jung-Hoi Koo (Republic of Korea); Alfonso Sales Duarte (Mexico); Adisa Timothy Odunlami (Nigeria); Lidia Troshina (Russian Federation); Stefaans Walters (South Africa); Stuart Brown and Duncan McKenzie (United Kingdom); Bernard Ascher, Peter D. Ehrenhaft, Harry Freeman and Mr. Whichard (United States of America); Jose Carlos Mattos and Francisco Javier Prieto (Economic Commission for Latin America and the Caribbean); and Sherry M. Stephenson (Organization of American States).
As a result of the extensive review process, in 2000 and early 2001 the Task Force prepared a further draft of the Manual, under the coordination of Mr. Cave, who drew together substantive material drafted by Ms. Fitzgibbon, Mr. Karsenty and Mr. Whichard, as well as important contributions and guidance from Ralf Becker (UN Statistics Division), Ms. Butkeviciene, Ms. Chamie, Mr. Patterson, Mr. Roman and Ms. Steger. OECD contributed secretarial and administrative support, particularly by Joscelyn Magdeleine. Editorial support was financed by IMF.
The present draft was submitted to the Statistical Commission at its thirty-second session, in March 2001. The Statistical Commission approved the Manual as an international manual and commended the Task Force for its work.
List of acronyms
third edition of the OECD Benchmark Definition of Foreign Direct Investment
fifth edition of the IMF Balance of Payments Manual
Central Product Classification, Version 1.0
Extended Balance of Payments Services (Classification)
In this Manual the term “FATS statistics” refers to “foreign affiliates trade in services statistics” (i.e., not to “Foreign Affiliates Trade Statistics”, as in some other literature)
foreign direct investment
financial intermediation services indirectly measured
free on board
General Agreement on Trade in Services
General Agreement on Tariffs and Trade
Harmonized Commodity Description and Coding System of the World Customs Organization
International Classification of Status in Employment
ISIC Categories for Foreign Affiliates
International Labour Organization
International Monetary Fund
International Merchandise Trade Statistics: Concepts and Definitions, Revision 2
International Standard Classification of Occupations
International Standard Industrial Classification of All Economic Activities, Revision 3
international transactions reporting systems
most favoured nation
not elsewhere classified
not included elsewhere
Organisation for Economic Co-operation and Development
System of National Accounts, 1993
special purpose entities
Tourism Satellite Account: Recommended Methodological Framework
ultimate beneficial owner (used in respect of foreign affiliates)
United Nations Conference on Trade and Development
World Trade Organization
The Manual on Statistics of International Trade in Services is an important first step in addressing a growing demand from Governments, business and analysts for more relevant, detailed and internationally comparable statistics on such trade. A special emphasis is given to the statistical information needs of international trade negotiations and agreements.
The aim of the Manual is to provide a coherent conceptual framework within which countries can structure the statistics they collect and disseminate on international services trade. It recommends a number of core and additional data items to be implemented over time, and in so doing recognizes the constraints under which statistical compilers operate and the need not to burden data providers unduly. In order to facilitate countries’ adoption of this framework, it builds on existing standards for compilation, in particular the fifth edition of the International Monetary Fund’s Balance of Payments Manual (BPM5) and the System of National Accounts, 1993 (1993 SNA).
Following the General Agreement on Trade in Services and to clarify how trade in services takes place, the Manual describes four modes through which services may be traded internationally. It does so by considering the location of both the supplier and consumer of the traded service. The first of these modes, mode 1 or cross-border supply, applies when suppliers of services in one country supply services to consumers in another country without either supplier or consumer moving into the territory of the other. Mode 2, consumption abroad, describes the process by which a consumer resident in one country moves to another country to obtain a service. Further, enterprises in an economy may supply services internationally through the activities of their foreign affiliates abroad. This mode of supply, mode 3, is called commercial presence. The last of these modes of supply, mode 4 or presence of natural persons describes the process by which an individual moves to the country of the consumer in order to provide a service, whether on his or her own behalf or on behalf of his or her employer.
The Manual is innovative in that it takes at once a broader and a more detailed view of international trade in services than the conventional balance of payments perspective set out in BPM5. It provides a more detailed classification of services delivered through conventional trade between residents and non-residents than is contained in BPM5, includes a treatment of local delivery of services through a foreign commercial presence and takes a first step toward linking these two systems. Links to existing statistical frameworks are described and correspondences provided between the classifications used in the Manual.
The BPM5 framework contains, amongst other things, recommendations for the definition, valuation, classification, and recording of resident/non-resident trade in services. Building on this framework, the Manual recommends extending the BPM5 classification of transactions by type of service to provide more detail through the Extended Balance of Payments Services Classification (EBOPS). Correspondence tables showing the relationship between EBOPS, the Central Product Classification, Version 1.0 and the GNS/W/120 list (the list of services for trade negotiations under the General Agreement on Trade in Services) are included in annex III to the Manual. These tables assist in the provision of clear definitions of the various components of EBOPS. Except for small differences in the treatment of construction services, the recommendations contained in the Manual are consistent with BPM5. Thus, a country’s balance of payments statistics will provide many of the data that are needed to implement the recommendations relating to the measurement of resident/non-resident trade in services. Recommendations are made in the Manual on the attribution of resident/non-resident transactions across the modes of supply.
As well as providing services by way of trade between residents and non-residents of an economy (measured in balance of payments statistics), enterprises in an economy may also supply services internationally through the activities of foreign affiliates abroad. The Manual recognizes this in its discussions on and recommendations for foreign affiliate trade in services (FATS) statistics. Included are recommendations on (a) the selection of foreign affiliates to be covered (which follows the definition of foreign-controlled enterprises used in the 1993 SNA);* (b) the attribution of FATS statistics (including a discussion on attribution by activity and by product); and (c) the variables to be compiled. While this is a less well-developed area statistically than the balance of payments statistics, some FATS statistics for foreign-owned affiliates in the compiling economy may be found in, or derived from, existing statistics on domestic production, including national accounts statistics based on the recommendations of the 1993 SNA.
The recommended basic FATS variables discussed in the Manual are: sales (turnover) and/or output, employment, value added, exports and imports of goods and services, and number of enterprises. Additional FATS variables considered relevant are also identified. The definitions of these variables are drawn from the 1993 SNA.
For both resident/non-resident trade in services and foreign affiliate trade in services, the Manual recommends the compilation of statistics on trade by partner country.
One area in which the Manual moves beyond existing statistical frameworks is the area where services in one country are provided by individuals (or natural persons) from another country moving to the first country on a non-permanent basis to take up employment. This area, which is part of mode 4, is one in which countries make commitments in trade agreements, and while some statistics on associated payments are included in balance of payments statistics, there is a need for further development of statistics in this area. Consequently, there is only limited discussion on, and recommendation for, compiling relevant statistics on the movement of natural persons in the main text of the Manual. The subject is discussed more fully in annex I, including the relevance of currently available statistics on the employment and work related movements of foreign nationals.
Although it is an important first step, the Manual addresses to a limited extent the inherent difficulties experienced by compilers in collecting data on trade in services. In addition, the nature of trade in services is changing in response to new technologies. The Manual therefore identifies the need for further work in a number of areas. These include compilation guidance, improving the classification and descriptions of certain services such as internet related, environment related and tourism related services, and the development of a framework for the measurement of the movement of natural persons and associated payments in relation to trade in services. In a longer time frame, it is desirable that the links be reviewed and strengthened between classifications of services activity and products on the one hand, and classifications of international trade in services between residents and non-residents on the other.
The Manual proposes a phased approach to the implementation of its recommendations so that countries, including those that are beginning to develop statistics on international trade in services, can gradually begin to structure available information in line with this new international standard framework. The sequence of recommended elements, of which a subset are designated as core recommendations, takes into account the relative ease that many compilers may find in their implementation. However, the order is quite flexible, so that countries can meet the priority needs of their own institutions. Full implementation - to be seen as a long-term goal - would represent a considerable increase in the detail of information available on trade in services.