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© WTO/OMC 2
GATT and WTO in short• Havana Conference (ITO) – First Round (23) 1947• The GATT enters into force 1948• Annecy (33) 1949• Torquay (34) 1950• Geneva (42) 1956• “Dillon Round” (45) 1960-61• “Kennedy Round” (60) 1964-67• “Tokyo Round” (99) 1973-79• “Uruguay Round” (123) (Creation of GATS) 1986-93• Marrakesh Conference (signature of the Final Act) 1994• WTO enters into force 1.1.1995
WTO
© WTO/OMC 3
1986-93: Uruguay Round
• “Final Act”– Marrakesh Agreement (Establishing WTO) – Annex 1
• 1A: Agreements on Trade in Goods (GATT 1994 + …)• 1B: GATS (Trade in Services)• 1C: TRIPS (Intellectual Property Rights)
– Annex 2: Dispute Settlement Understanding– Annex 3: Trade Policy Review Mechanism– Annex 4: Plurilateral Agreements– Decisions and Declarations
WTO
© WTO/OMC 4
What is the WTO? (1/2)
• Independence from the United Nations system
• Member-driven (153 Members)– Decision-making by consensus
• Support from an independent Secretariat• Budget: 180 million Swiss francs (2007)• Headquarters in Geneva
(no permanent presence in the field)
WTO
© WTO/OMC 5
What is the WTO? (2/2)
• Deal with rules of trade• WTO agreements: contracts between Members• Agreements negotiated and signed by Members• Help producers of goods and services, exporters
and importers
Trade flow as freely as possible
WTO
© WTO/OMC 6
Objectives
• Raising standards of living
• Ensuring full employment
• Growth (income and demand)
• Growth in output and trade (goods and services) … optimal use of the world’s resources (sustainable development)
WTO
© WTO/OMC 7
Functions
• Administering WTO trade agreements• Forum for negotiations• Handling trade disputes• Monitoring national trade policies• Technical assistance and capacity building• Co-operation with other international
organizations (coherence)
WTO
© WTO/OMC 8
Basic principles of the multilateral trading system
• Most-Favoured Nation (MFN)
• National treatment
• Prohibited use of quantitative restrictions
• Respect of the bindings
WTO
© WTO/OMC 9
Current negotiations: DDA• Fourth Ministerial Conference in Doha
• Launch of new round of negotiations– “Doha Development Agenda”– Includes Services negotiations initiated in 2000
• Doha Ministerial Declaration – Work programme for negotiations– Original deadline: 1 January 2005
• “July package” (1 August 2004)
• Hong Kong Ministerial Conference
• “July 2008 package”
WTO
© WTO/OMC 10
Ministerial Conference
Secretariat
Appellate Body
Panels
Committees Committees
Goods Council Services Council
TRIPS Council
CTD (Development)CTE (Environment)CRTA (Regionalism)
BOPWG (Investment)WG (Competition)
WG (Transparency – Government Procurement)
AccessionsBudget
General CouncilTPRB DSB
Director-General
Trade Negotiations CommitteeTrade Negotiations Committee
WTO
Negotiating Group
Special Sessions
© WTO/OMC 11
Services:
• Most important activity in many countries of the world
• Single largest source of employment
• Most rapidly growing sector
• Universal inputs for many other sectors – services are everywhere
Services and TIS
© WTO/OMC 12
Services
• Intangible output of a production process
PRODUCTIONUSER’S NEED
PRODUCTS• GOODS (tangible)
• SERVICES (intangible)
• Key role in the economy• transport, telecommunications…• long term benefits - environmental, educational services…
• Services value added = 2/3 Global GDP
Services and TIS
© WTO/OMC 13
Agriculture/commodities
Telecommunications
Industrial goodsOther
Services
TransportBanking &
Insurance Computer &
SoftwareBusiness Services
Infrastructure services as a key to economic activity
Energy
Services and TIS
© WTO/OMC 14
Some Characteristics of Trade in Services
Services: 20% of world trade but 2/3 of world GDP
Intangible → non-tradable and non-storable
Conventional trade statistics do not cover all international trade in services
Services delivered by foreign affiliates > conventional international trade in services.
Simultaneity of production and consumptionRole of local establishment
Services and TIS
Strong government involvementPublic service obligations, infrastructural importance (transport, telecom, etc.)
© WTO/OMC 15
Certain services - international transport and communication - have been traded for centuries
Services are supplied in conjunction with goods (finance, insurance, marketing, etc.)
Services have become tradable as a result of:- technical progress (e-banking, tele-medicine,
distance learning)- government retrenchment- market liberalization and regulatory reform
Services and TIS
© WTO/OMC 16
GATS framework
• Legal text
• GATS defines:– Trade in services (4 modes of supply)– Service supplier / consumer– Commercial presence– Juridical persons / natural persons
• Commitments made from the imports perspective
GATS
© WTO/OMC 17
MEASURES AFFECTING TRADE IN SERVICES AT ALL GOVERNMENT LEVELS
ALL SERVICES(except air traffic rights and services supplied in the exercise of governmental authority)
FOUR MODES OF SUPPLY- Cross-border supply- Consumption abroad- Commercial presence- Presence of natural persons
APPLIES TO PRODUCT (SERVICE) AND PRODUCER/ DISTRIBUTOR (SERVICE SUPPLIER)
GATS: Scope, Coverage, Definition
GATS
© WTO/OMC 18
The GATSPillars and Commitments
GATSPillars
Set of general obligations and disciplines
Countries schedules of specific commitments
Annexes on specific issues
Commitmentsunder GATS
By modes of supply
By services sectors
GATS
© WTO/OMC 19
The Services Sectoral Classification List GNS/W/120
1. Business services2. Communication services3. Construction and related engineering services4. Distribution services5. Educational services6. Environmental services7. Financial services8. Health-related and social services9. Tourism and travel-related services10. Recreational, cultural and sporting activities11. Transport services12. Other services not included elsewhere
GATS
© WTO/OMC 20
• MTN. GNS/W/120 of July 1991 divides sectors into 12 groups
• Altogether ~ 160 sub-sectors identified
• Results from consultations with member countries
• Relevant sectors and sub sectors with respect to national services regulations
• Negotiating list Statistical classification
What is the GNS/W/120?
GATS Classification
© WTO/OMC 21
Description of Sectors
• Need for precise definition of sectors as defines scope of commitments
• GNS/W/120 may evolve and negotiators may use other classifications
• Corresponding code of the Central Product classification (CPC), Provisional version
• CPC is a tool, Members may describe sectors by using other definitions
GATS Classification
© WTO/OMC 22
GNS/W/120 – Provisional CPC (1/2)GATS
Classification
© WTO/OMC 23
Hierarchy •Section: 7 - Transport, storage and communications services •Division: 72 - Water transport services •Group: 721 - Transport services by sea-going vessels •Class: 7212 - Freight transportation
Breakdown: This Class is divided into the following Subclasses: •72121 - Transportation of frozen or refrigerated goods •72122 - Transportation of bulk liquids or gases •72123 - Transportation of containerized freight •72129 - Transportation of other freight
Description in CPC prov:
GNS/W/120 – Provisional CPC (2/2)GATS
Classification
© WTO/OMC 24
The 1st Mode of Supply
Supply of a service from the territory of one Member into the territory of any other Member
Service consumer
Service supplier
MODES
Member A Member B
© WTO/OMC 25
The 2nd Mode of Supply
Supply of a service in the territory of one Member to the service consumer of any other Member
Service consumer
Service supplier
Member A Member B
MODES
© WTO/OMC 26
The 3rd Mode of Supply
Supply of a service by a service supplier of one Member, through commercial presence in the territory of any other Member
Service consumer
Service supplier
Member A Member B
$
MODES
© WTO/OMC 27
The 4th Mode of Supply
Supply of a service by a service supplier of a Member, through presence of natural persons of a Member in the territory of any other Member
Service consumer
Service supplier
MODES
Member A Member B
© WTO/OMC 28
The 4 modes of supply: health services (example)
• Mode 1: Tele-diagnosis
• Mode 2: Hospital treatment abroad
• Mode 3: Foreign-owned clinic
• Mode 4: Short-term movement of foreign nurses or physicians
MODES
© WTO/OMC 29
The Movement of Natural Persons in GATS
Relevant framework
• GATS’ main text: mode 4 presence of natural persons• GATS’ Annex movement of natural persons
Description of Mode 4 in GATS’ Annex in terms of
Purpose of stay
Fulfilling a service contract, whether as a service supplier (self-employed) or as an employee
Duration of stay
Temporary: Measures regarding citizenship, migration, residence and permanent employment are not covered
MODE 4
© WTO/OMC 30
Which natural persons?• Self-employed of Member A • Employed by a service supplier of
Member A:– the employee is sent to Member B in respect of the
supply of a service– Member A has commercial presence in Member B
and sends its employee to its affiliate in Member B (intra-corporate transferees) or directly recruits a foreigner
Does not exclude any level of skill
MODE 4
© WTO/OMC 31
The Annex on Movement of Natural Persons
• GATS does NOT apply to measures – affecting natural persons seeking access
to the employment market– regarding citizenship, residence or
employment on a permanent basis
GATS does not define “temporary”
MODE 4
© WTO/OMC 32
The Annex on Movement of Natural Persons
• Commitments can be scheduled by categories of natural persons
• Governments are free to regulate entry and temporary stay, provided these measures do not nullify or impair the commitment
footnote 1: differential visa requirements, not to be regarded as nullifying or impairing benefits under a specific commitment
MODE 4
© WTO/OMC 33
Who is in and Who is out?Falling under Mode 4 Not falling under Mode 4
• Supply of services(Definition of particular services?)
• All skill levels
• Intra-corporate transferees or foreigners directly recruited by foreign affiliate
Contractual service suppliers –Self-employed–Employees of foreign service
supplier
Also: Services sellers, etc.• Temporary movement
• Employees in the “goods” sector
• Employees of host country firms
• Permanent migration
MODE 4
© WTO/OMC 34
Mode 4 and Current Commitments
Mode 4 Commitments• Supply of services
• All skill levels
• Intra-corporate transferees
Contractual serv. suppliers
Services sellers/ setting up commercial presence
• Temporary movement
• Mainly horizontal commitments
• Mostly high-level
• Intra-corporate transferees (~70%)
Contractual serv. suppliers (~10%)
Services sellers/ setting up commercial presence (~20%)
• 3-5 years: Intra-corp. transferees < 1 year: Contractual serv. suppliers< 3 months: Service sellers etc.
MODE 4
© WTO/OMC 35
UN CPCBasis for classifying services as product of economic activity, including services delivered through Mode 4
Industrial classification: relevant if statistics by occupation are not available
Mode 4 and Existing Classifications
ISCO-88Distinguishes categories of employment: can facilitate linkages statistics/negotiations
UN ISIC
Status in employment: identifies « independent service providers »
ICSE-93
MODE 4
© WTO/OMC 36
Mode 4 Information needs
Value of trade: Balance of Payments services trade
Contractual service suppliers as employees of service suppliersent abroad to fulfill a contract between his employer and consumer
Self-employed going abroad to fulfill service contract (independent professionals)
• Contractual service suppliers as employees• Self-employed• Intra-corporate transferees, employees of foreign affiliates• Service sellers / persons responsible for setting up commercial
presence
Number of persons (flows and stocks): Tourism and Migration statistics
MODE 4
© WTO/OMC 37
Main Issues for Measuring Mode 4
Mode 4 in MSITS
• The Manual on Statistics of International Trade in Services (MSITS) recognises that a statistical framework needs to be developed for measuring Mode 4
• Annex in MSITS as a first step
Main statistical issues
• Determining the coverage of Mode 4
• Only fragmentary indicators available
• Determining the indicators to measure Mode 4
MODE 4
© WTO/OMC 38
In what modes are the following services supplied?
Temporary presence of independent professional accountant to provide accounting services in country B
Establishment of a branch in B of an insurance company from country A
Services consumed by a business traveller of A while travelling abroad
Provision of medical advice by an expert team in country A to physicians carrying out by-pass surgery in country B
A dentist from B offers treatment in a practice he owns in A
Examples
© WTO/OMC 39
In what modes are the following services supplied?
Architect from A designs a construction project and delivers it to its client in B through the Internet, but makes occasional visits to B at the implementation phase
A computer specialist from C employed by a computer services company of B and sent to work in a branch located in B
An airline company from A has its plane repaired while stationed in country B. The crew stays in a hotel in B while the plane is being repaired.
A cook from A opening his own restaurant in country B
Examples
© WTO/OMC 40
• By service sectors
• By modes of supply
• Mode 1: Cross-border trade
• Mode 2: Consumption abroad
• Mode 3: Commercial presence
• Mode 4: Presence of natural persons
• By partner
GATS: Statistical information needed
Statistics
© WTO/OMC 41
GATS: statistical considerations
Territorial presence vs. residency
Cross-classifications (mode 4)
Services sectors vs. CPC/EBOPS/ICFA
Modes of supply vs. transactions
Temporary vs. 1 year guideline
Statistics
© WTO/OMC 42
• Measured in the balance of payments, within the current account
• Does not cover the whole of trade in services or showseparately (for example, mode 3 or mode 4?)
• Need for more detail in terms of service sectors (EBOPS)
• Not allocated by modes of supply
• Need for statistics broken down by partner
Trade in services between residents/nonresidents
Statistics
© WTO/OMC 43
Statistics
• Usefulness for measuring Mode 3 (commercial presence) and to understand globalisation
• Focus on the operations of majority-owned foreign affiliates
• Five basic variables, and additional variables
• Attributed by partner country
• Classified as a priority on the basis of the primary activity of the foreign affiliate (ICFA – focus on services)
FATS statistics
© WTO/OMC 44
.... But other indicators of interest for analysis
• Mode 3 and Foreign Direct Investment statistics (stocks and flows, important complement to FATS)
• Other FATS variables (number of service suppliers, employees, value of assets)
• Sectoral statistical frameworks: tourism , health
• Supplementary information from BPM6 linked to the movement of mode 4 persons
• Production, quantitative, employment indicators
Statistics
© WTO/OMC 45
The four modes of supply: statistical simplified criteria
Consumer or property located
Supplier Supply through:
Outside territory of residence
has no presence in consumer’s territory
Mode 2 (BOP, tourism statistics)
Mode 1 (BOP)
Mode 3 (FATS, FDI)
Mode 4 (BOP, migration, tourism statistics)
Commercial presence
has presence within consumer’s territory
Within territory of residence
Presence of natural persons
Statistics
© WTO/OMC 46
What’s the problem with measuring the value of GATS Modes of Supply?
?
?
?
Intermodal linkages
Services may be delivered through
several modes of supply
Mode 1
Mode 4
Mode 3Mode 2
A single service transaction through different modes
Statistics
© WTO/OMC 47
The GATS Modes of Supply (1/2)
COUNTRY A COUNTRY B
Mode 1: Cross-border
Mode 2: Consumption abroad
Mode 3: Commercial presence
CompanyCommercial
presence
Direct investment
ConsumerService supplier
The service crosses the border
The consumer is abroad
Servicesupply
Consumerin C
Consumer ConsumerService supplier
Consumer
$ $ $ $ $
BOP travel + part of transportation
Servicesupply
Servicesupply
BOP commercial services (excl. travel and construction)
FATS+ BOP construction Establish commercial presence
Statistics
© WTO/OMC 48
Mode 4: Presence of natural persons
Juridical person
Natural person
An independent goes to country A
COUNTRY A COUNTRY B
An employee is sent by a company of country B
Commercialpresence
intra-corporate transferee or directly recruited
Consumer C
Consumer
Consumer
The GATS Modes of Supply (2/2)
Servicesupply
Servicesupply
BOP commercial services (excl. travel)
Mode 3 trade
Statistics
© WTO/OMC 49
Allocation of BOP/EBOPS Services Items to Modes of Supply (1/2)
As a first step, MSITS proposes a simplified approach:
• Items deemed to be predominantly delivered through one mode
Mode 1
• Transportation (except supporting and auxiliary services to carriers in foreign ports),
• Communications services
• Insurance services
• Financial services
• Royalties and license fees
Mode 2• Travel (excluding purchases of goods)
• Supporting and auxiliary services to carriers in
foreign ports
Statistics
© WTO/OMC 50
Allocation of BOP/EBOPS Services Items to Modes of Supply (2/2)
Simplified approach (continued):
• Items for which significant elements of 2 modes of supply are involved
• Construction
• Computer and information services
• Other business services
• Personal, cultural and recreational services
Mode 1
?
Mode 4
Mode 3
?
Statistics
© WTO/OMC 51
4%
67%
29%
Mode 1
Mode 4Mode 2
Singapore
Commercial services exports by mode of supply, 2002
Statistics
Source: WTO Secretariat estimates derived from Singstats, Singapore's International Trade in Services: New Statistical Estimates and Analysis, March 2000 and Singapore's Balance of Payments: Methodological Improvements and New Reporting Format for the Services Account, December 2003.
© WTO/OMC 52
Economic Variables for FATS
• Sales (turnover) and/or output
• Employment
• Value added
• Exports and imports of goods and services
• Number of enterprises
Basic FATS variables(minimum recommended by MSITS)
Additional FATS variables
• Assets
• Compensation of employees
• Net worth
• Net operating surplus
• Gross fixed capital formation
• Taxes on income
• Research and development expenditures
Statistics
© WTO/OMC 53
Australia
Commercial services exports by mode of supply, 2002-03
Statistics
Mode 362.7%
Mode 219.4%
Mode 1+417.8%
Source: WTO calculations based on Trade in Services, Australia 2003-2004, Australian Department of Foreign Affairs and Trade (2005) and ABS (2007), International Trade in Services by Country, by State and by Detailed Services Category, Financial Year, 2006-07.
© WTO/OMC 54
Australian provision of services by mode of supply, 2002-03
Statistics
© WTO/OMC 55
Australia, exports of services by mode of supply, 2002-03
Mode 219.4%
Mode 362.7%
Mode 111.9%
Other5.9%
Mode 1+45.6%
Mode 2+40.1%
Mode 3+40.1%
$3.2 billion
Source: WTO calculations based on ABS (2007), International Trade in Services by Country, by State and by Detailed Services Category, Financial Year, 2006-07
Statistics
© WTO/OMC 56
Sales of services by Australia Breakdown by main partner, all modes, 2002-03
United Kingdom
16%
Other18%
United States39%
Indonesia3%
China3%
Hong Kong, China
3%
Japan4%
Singapore5%
New Zealand14%
Statistics
Source: Trade in Services, Australia 2003-2004, Australian Department of Foreign Affairs and Trade (2005).
© WTO/OMC 57
The size of mode 4 trade?
• Small compared to total trade, and to other modes of trade in services
• Importance varies across countries and sectors
• Mobility for skilled workers increasing and facilitated by special programs
• Both developed and developing countries are traders where mode 4 can be involved
Mode 4measurement
© WTO/OMC 58
One-year rule distinction between residents/non-residents
Mode 4 and “Temporary”
GATS does not define “temporary”
• In WTO Members’ schedules of commitments
Varies between about 3 months (service sellers) and 2 to 5 years (intra-corporate transferees)
• In international statistical standards (BPM5, SNA, migration, tourism)
Statistics on residents also include Mode 4 service suppliers
+ in GATS: nationality
Mode 4measurement
© WTO/OMC 59
BOP and Mode 4
BOP Items Relevance Limitations
Services (especially computer & information, other business, personal cultural & recreational, and construction services)
Service contracts with the importer
Include other modes of supply
Mode 4measurement
© WTO/OMC 60
Commercial presence, $64m, 16%
Fly in-fly out, $106m, 26%
Australian projects,
$238m, 58%
Australia's legal services export income by mode of supply, 2004-05(million USD and percentage)
Source: ILSAC Survey of Australian Exporet Market for Legal Services 2004-05
Mode 4measurement
© WTO/OMC 61
Amount (million USD) Per cent Share in Total Size of Transactions (million USD) Mode 1 Mode 2 Mode 3 Mode 4 Total Mode 1 Mode 2 Mode 3 Mode 4
< 0.2 82 1 15 7 105 77.96 1.18 14.17 6.69
0.2-2 205 5 56 31 297 69.12 1.60 18.92 10.36
2-20 358 1 288 52 699 51.18 0.12 41.27 7.43
> 20 1850 0 2706 775 5332 34.71 0.00 50.75 14.54
Total 2495 7 3065 865 6432 38.79 0.11 47.65 13.45
Top ten companies
1553 0 1750 573 3876 40.08 0.00 45.14 14.78
Source: Reserve Bank of India (2005), Computer services exports from India. (converted to US dollars by the WTO Secretariat).
Indian International Trade in Computer Services by Mode of Supply, 2002-03
Mode 4measurement
© WTO/OMC 62
Sales of Services by GATS Modes of Supply: 2005 Statistical Approximation
Mode of Supply Estim ated share
1 - cross-border supply 25 - 30 %
2 - consum ption abroad 10 – 15 %
3 - com m ercia l presence 55 - 60 %
4 – presence of natural persons less than 5%
Mode 4measurement
© WTO/OMC 63
Migration Statistics and Mode 4
Why relevant?
Which categories could be relevant?
Include temporary migrations for the purpose of work
But...Mode 4 very small within these categories
Mode 4measurement
Relevant framework
UN Recommendations on Statistics of International Migration
© WTO/OMC 64
Why relevant?
How could it help?
FATS and Mode 4
Relevant variables
• Employment• Compensation of employees
• Many commitments relate to intra-corporate transferees
• Separate identification of foreign non-permanent employment, of which intra-corporate transferees
Mode 4measurement
© WTO/OMC 65
2003 2004 2005 Austria 0.2 0.2 ... Canada 3.8 4.2 4.5 Germany 2.1 2.3 ... Japan 3.4 3.6 4.2 Korea 7.8 8.5 8.4 Switzerland 14.4 7.5 1.8 United States 57.2 62.7 65.5
Source: OECD (2007), International migration outlook: SOPEMI 2007 Edition.
Intra-corporate transfers in selected OECD countries (thousands)
Mode 4measurement
© WTO/OMC 66
Tourism Statistics and Mode 4
Relevant frameworksInternational recommendations on Tourism Statistics
Tourism Satellite Accounts: Recommended Methodological Framework
Why relevant?
Which categories could be relevant?
Include short-term visits for business and professional purposes
But...How detailed are these statistics?
Mode 4measurement
© WTO/OMC 67
Source: UNWTO(2008); * Excluding Mexico ** Excluding Hong Kong, China, Chinese Taipei and Macao and overseas Chinese.
United Kingdom 9 717 Canada 2 651
Spain 6 084 Saudi Arabia 1 603
United States * 5 569 Japan 1 523
China ** 5 548 Brazil 1 410
Poland 4 240 Australia 1 218
Hong Kong, China 3 862 Argentina 599
Russian Federation 3 233 Chile 442
Ukraine 3 040 South Africa 324
Singapore 2 925 Morocco 164
Arrivals for business and professional purposes, selected economies, 2006 (thousands)
Mode 4measurement
© WTO/OMC 68
Statistics for Measuring Mode 4
Categories Statistical coverage I. Service contracts, delivered in the host country by independent foreign supplier, or its employee(s)
BOP: Service transactions between resident and non-residents, major BPM5 services components Employment/migration/tourism statistics: business travellers
II. Employment contracts (non-permanent), for foreigners, in all domestic firms (not of interest for assessing mode 4)
BOP: Compensation of employees, with adjustments (e.g. sectoral breakdown and duration) Employment/migration statistics: migrants working in services.
(a) of which: foreign-owned or controlled resident services companies
A subset of the above; could be derived using the FATS register
Mode 4measurement
© WTO/OMC 69
Data Sources
• Statistics on the number and type of work permits granted (e.g. by duration / occupation)
• Information from social security systems / health insurance schemes in which foreigners may be distinguished
• Statistics on arrivals and departures from migration or tourism authorities (origin/destination, length of stay, purpose of stay...)
• Household, enterprise, labour-force surveys
• Border/passenger surveys
• Population censuses
Mode 4measurement
© WTO/OMC 70
Improving Mode 4 Related Statistics
Main difficulty in measuring Mode 4
Identify in available statistics the relevant subset of services and workers/visitors
Indicators on the value of Mode 4 services
• Identify Mode 4 in services sub-items
Migration/labour statistics
but little seems feasible at present
Sounder ground for improvement for detailed informationHowever not in short-term, and GATS Mode 4 not translated in precise statistical requirements
Mode 4measurement
© WTO/OMC 71
Mode 4measurement
• Supply of services, all skill levels, temporary movement• Categories of persons:
• Contractual service suppliers (self-employed or employee of the foreign contractual service supplier)
• Intra-corporate transferees and directly recruited by affiliate• Service sellers/persons responsible for setting up commercial
presence• Manual provides a first step • Framework currently developed in revised Manual
• Value of services trade for contractual service suppliers• Number of “ mode 4” persons moving and staying abroad
REMEMBER
Mode 4 measurement
© WTO/OMC 72
Distribution of imports by modes of supply?Examples
Table 1: Hong Kong, China - Imports of services, 2003-2006Balance of Payments transactions- million $
2003 2004 2005 2006
Transport 6719 8687 10462 11616
Travel 11448 13269 13305 14043
Other commercial services 7828 9027 10071 11247
Communication 941 1124 1141 1072
Construction 399 346 273 241
Insurance 622 611 606 613
Financial services 878 1165 1406 2017
Computer and information services 282 395 427 371
Royalties and licence fees 864 1111 1289 1357
Other business services 3772 4223 4878 5519Personal, cultural and recreational serv. 68 52 52 56
Commercial services 25994 30983 33838 36905FATS inward sales of services 83077 91612FDI inward stock in services 256333 311852 353579 483996FDI inflows in services 11931 23331 24661 32133
Source: WTO calculations based on IMF BOP database (2008) and Hong Kong Census and Statistics Department .
© WTO/OMC 73
Assessment of imports by modes of supplyBOP basis
0%
20%
40%
60%
80%
100%
2005 2006
Hong Kong, China
Mode 1
Mode 2
Mode 3
Mode 4
Examples
© WTO/OMC 74
US Sales of Services to APEC economies 2006, million USD
0
10,000
20,000
30,000
40,000
50,000
60,000
Canad
a
C
hile
M
exico
A
ustra
lia
C
hina
H
ong
Kong
In
done
sia
J
apan
K
orea
, Rep
ublic
of
M
alay
sia
N
ew Z
ealan
d
P
hilip
pines
S
inga
pore
Taipei
, Chin
ese
T
haila
nd
Modes 1 and 4 Mode 2 Mode 3
Source: US Bureau of economic analysis (2007)..
Examples
© WTO/OMC 75
New Chapter in revised 2010 Manual
• More on services delivery compared to BOP services transactions
• Chapter on modes of supply/mode 4:• Scope of chapter
• Defining modes of supply
• Mode 4 and relevant information for measuring
• Allocation by mode of supply for measuring value
• Additional indicators for analysis: number of persons
Revis
ion 2
010
New chapter