A.1 Overview of the General Agreement on Trade in Services
5. In 1994, the Uruguay Round of multilateral trade negotiations was completed by the signing of the Agreement Establishing the World Trade Organization (WTO). Annex 1B to the Agreement contains the General Agreement on Trade in Services (i),[1] which established a set of rules and disciplines governing the use by WTO members of measures affecting trade in services. Trade in services was defined in article I of GATS as “the supply of a service”. The same article also defined four different ways in which a service can be supplied by a natural and juridical person (service supplier) from the territory of a WTO member to a service consumer in the territory of another WTO member. Article XXVIII elaborated the meaning of the main concepts set out by GATS for use in international negotiations[2] on liberalizing trade in services and in related analytical work.
6. The term “service” is not defined in the Agreement. However, the scope of services with which GATS is concerned was clarified by the secretariat of WTO in the Services Sectoral Classification List (MTN.GNS/W/120 (W/120)), which was based on consultations with the WTO members and issued in 1991. The identification in W/120 of relevant sectors and subsectors enabled WTO members to undertake specific commitments. It should be noted that WTO members have tended to avoid any major changes to the list to ensure the stability and comparability of commitments over time, even though related international statistical classifications have been revised (see chapter I, section B).
7. GATS created a need for specific data that led to the establishing of a special statistical domain: statistics of international trade in services. In view of the fundamental importance of conceptual framework of GATS for those statistics, its key elements are described in chapter 1, section B, of the Compiler’s Guide.
A.2. Data needs related to the General Agreement on Trade in Services
8. The GATS negotiators and trade in services policymakers, as well as the business community, research institutions and the public at large, need detailed and internationally comparable statistical information on the supply of services by mode, type of service and trading partner. The policymakers require such data to ensure an informed decision-making process leading to specific commitments, the comparison of national commitments and the conduct of efficient negotiations, as well as to assess the extent of liberalization reached in specific sectors or markets and provide statistical background for the settlement of disputes.
9. The availability of timely and comparable data reflecting the international supply of services would greatly benefit the business community, as such data would facilitate the evaluation of the importance of each type of internationally traded service and an understanding of how those services are provided in the respective economies, helping the business community to realize competitive advantages in a globalized world. Such data would also be of interest to research institutions and the public at large since it would allow them to assess the role of services in economic and social development both in their respective countries and globally and would enable them to participate more effectively in the formulation of their countries' trade policies.
10. The conceptual and practical issues related to the compilation of data on the value of internationally supplied services occupy most of the Guide. It is necessary to stress, however, that statistical needs related to GATS go beyond the value of services, as various non-monetary indicators of modes of supply are critically important for assessing their economic and social impact. Chapter 16 of the Guide focuses specifically on the conceptual and data compilation issues related to the compilation of such indicators.
A.3. The Manual on Statistics of International Trade in Services as a statistical response to data needs related to the General Agreement on Trade in Services
11. GATS has highlighted that the scope of the supply of services, which is of primary interest to trade negotiators and policymakers, is far broader than what statistics conventionally measure (e.g., it includes supply of services by commercial presence), thus making the statistical community aware of an informational gap that had to be filled. Dealing with that issue was a serious challenge as the conceptual framework of GATS differs from statistical frameworks adopted internationally for economic statistics. To meet that challenge successfully, it was necessary to conceptualize the supply of services by mode in a statistical context.
12. In response to that challenge, TFSITS drafted the Manual on Statistics of International Trade in Services (MSITS) and the Statistical Commission adopted it at its thirty-second session, in March 2001. MSITS established the statistical framework that allowed the measurement of the supply of services. MSITS was revised by the TFSITS less than a decade after its adoption to take into account the publication of revised international statistical standards, including BPM6; the 2008 SNA; the Central Product Classification (CPC), ver. 2; the International Standard Industrial Classification of All Economic Activities (ISIC), rev.4; the International Merchandise Trade Statistics (IMTS) 2010; the International Recommendations for Tourism Statistics (IRTS) 2008; and others, as well as the necessity for further elaboration of modes of supply measurement. The revised version of MSITS, adopted by the Statistical Commission in 2010, provides a clearer, more detailed and more comprehensive statistical framework, which, once implemented, will result in data crucial for statistical and economic analysis of the international supply of services and for evidence-based decision-making.
13. The MSITS 2010 statistical framework was developed using two main building blocks: (a) BPM6 concepts and definitions describing transactions between residents and non-residents of different economies and (b) concepts and definitions developed in the Foreign Affiliates Statistics (FATS) on the basis of BPM6 and the OECD Benchmark Definition of Foreign Direct Investment, 4th ed. The use of those two building blocks was necessitated by the following consideration: The ability to analyse the supply of services between natural and juridical persons located in the territories of different WTO members, in terms of the services transactions between residents and non-residents of different economies, made it possible not only to estimate the value of the supply of services by all modes, except for commercial presence, but also to provide details of the supply by service category and trading partner. However, since the BPM6 conceptual framework does not cover the supply of services through the commercial presence of service suppliers in the economy of service consumers, a new statistical framework for measuring the supply of services through that mode had to be established. That framework was developed as part of FATS. It should be underlined that that framework, once implemented, will not only generate information needed for purposes related to GATS, but also will result in statistics that are indispensable for a better understanding of the overall dynamics of the global economy and for assessing the impact of globalization on individual countries. Chapter 1 contains an overview of the main elements of those two components of the MSITS 2010 statistical framework, as well as the main concepts underlying the compilation of additional monetary and non-monetary indicators relevant for analysing the international supply of services. The remainder of the Guide deals with various issues related to data collection, compilation and dissemination.
14. While stressing the importance of the MSITS 2010 conceptual framework, it should not be overlooked that the MSITS recommendations and guidelines on the compilation of statistics by mode of supply are laid out only for statistical purposes. They do not imply any attempt to interpret GATS.[3] In that connection, MSITS 2010 recognizes that a comprehensive statistical treatment of modes of supply that fully mirror the GATS legal definition and other GATS articles is beyond its scope.[4] The same limitation applies to the present Guide.
A.4. Manual on Statistics of International Trade in Services 2010 and Compiler's Guide for the Manual on Statistics of International Trade in Services 2010
15. Although the original version of the MSITS was released in 2002, the international statistical community did not produce compilation guidance to accompany its recommendations. With the adoption of the 2010 edition of MSITS, the Statistical Commission specifically requested that TFSITS develop appropriate compilation guidance. That is the reason that the Statistics Division, with the assistance of TFSITS, established, in December 2011, an Expert Group on the compilation of trade in services statistics (EGCSITS) to assist in the preparation of the Compiler's Guide for MSITS 2010. The Expert Group included all members of TFSITS, as well as compilers from developing and developed economies, and was convened by the Statistics Division. The Guide represents the result of the work of both TFSITS and EGCSITS.
16. EGCSITS was established to ensure active country involvement in the development of the Compiler's Guide. In March 2012, the first meeting of EGCSITS was held through virtual discussion. The main objective of the meeting was to review the annotated outlines of all chapters of the Guide and to define its scope and the content of each of its chapters. A revised annotated outline was circulated for worldwide consultation in July 2012 and the first draft chapters were prepared. The outcome of the worldwide consultation and the draft chapters were discussed in a virtual meeting in October 2012. Further draft chapters were discussed at a third virtual meeting in March 2013. At all three meetings, about 65 representatives of countries and international organizations actively participated. At the end of June 2013, EGCSITS held a face-to-face meeting in Geneva to discuss the first full draft of the Guide. A revised version of that draft Guide was subsequently prepared and presented to TFSITS at its meeting in October 2013, and was discussed electronically by EGCSITS in November 2013. A draft version of the Guide was submitted to, and adopted by, the Statistical Commission at its forty-fifth session, held in March 2014. TFSITS finalized the draft Guide over the course of 2014.
[1] See www.wto.org/english/docs_e/legal_e/26-gats_01_e.htm.
[2] The regional economic integration agreements take their inspiration from the General Agreement on Trade in Services (GATS) definitions. However, some of these agreements may define the modes in a somewhat different way. The compilers should be aware of this while interpreting data on value of the services supplied under different modes in a regional context.
[3] Manual on Statistics of International Trade in Services 2010 (MSITS 2010), Statistical Papers, Series M, No. 86/Rev.1 (United Nations publication, Sales No.E.10.XVII.14), para. 5.32. Available at https://unstats.un.org/unsd/tradeserv/TFSITS/msits2010/docs/MSITS%202010%20M86%20(E)%20web.pdf.
[4] Ibid., para. 5.27.