Transcript Introduction to the External Debt Statistics Guide

Manual on Statistics of
International Trade in Services
Workshop on
International Trade in Services
Beirut
April 18-20, 2011
Structure of Lecture
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Background
GATS; modes of supply
Foreign Affiliates Statistics (FATS)
Statistics on Activities of
Multinational Enterprises (AMNE)
Background
 The 2010 Manual on Statistics of International
Trade in Services (2010 MSITS) serves…
 primarily as a guide for compilers to support
implementation of statistical concepts
 governments in providing a better overview for
economic analysis, policy-making, and
guidance in international negotiations on
trade in services
 businesses and others to monitor developments
in international services markets, to identify
potential trade opportunities
Background
 The term “international trade in services” in
the Manual covers…
 trade in services between residents and
nonresidents
 services delivered through locally established,
but foreign-controlled enterprises
 cases where individuals are temporarily
present abroad to supply a service
 The Manual extends the concept of trade in
services, however it conforms entirely to
existing international standards
Background
 The Manual’s major components:
 BPM6 concepts and classifications related to
international trade in services
 BPM6 extensions by product category and partner
country
 Foreign Affiliates Statistics (FATS) that complement
BPM6, and are beyond the scope of BPM6, as broadly
defined in General Agreement on Trade in Services
(GATS)
 Statistical approach for the treatment of the GATS’
modes of supply, especially mode 4, i.e. services
supplied through the presence of natural persons
Negotiations under the Doha
Development Agenda (DDA); GATS (1)
 Under the framework General Agreement
on Trade in Services (GATS), WTO
members are committed to entering into
successive rounds of trade liberalizing
negotiations
 Governments require statistics to support
the negotiation of specific commitments in
trade in services, and to monitor
developments in the area concerned
GATS (2)
 In March 2001 the Guidelines and
Procedures for the Negotiations on
Trade in Services were adopted by
the Council for Trade in Services
 first set of legally enforceable multilateral
obligations and commitments governing
the use by WTO members:

laws; regulations; administrative actions in
respect of the purchase/payment/use of a
service; presence of foreign service suppliers
GATS (3)
 Three main objectives:
 to progressively liberalize trade in
services through rounds of negotiations
 by that to encourage economic growth
and development
 to increase participation of developing
countries in world trade in services
Modes of Supply (1)
 GATS defines the modalities through which
services may be supplied, depending of the location
of the supplier and the consumer:

Mode 1 – cross border supply
Supplier of one country supplies services to
consumers in another country without either
supplier or consumer moving into the resident
country of the other
•
•
e.g. services supply enabled by Internet or telephone;
law firm delivering legal advice by phone to a consumer; a
physician providing medical diagnosis to a patient via email.
Modes of Supply (2)

Mode 2 – consumption abroad
Consumers are outside their home territory to
consume services
•
e.g. travel
 Mode 3 – commercial presence
Service suppliers establish or acquire an affiliate,
branch or representative office in another
territory to provide their services
FATS
•
e.g. foreign bank invests in host economy to create a
subsidiary in order to supply banking services
Modes of Supply (3)
 Mode 4 – presence of natural persons (i.e. an
individual)
Individual moves temporarily to resident country of
consumer to provide the service on behalf of himself or
the enterprise (self-employed person or his/her
employee)
•
e.g. independent architect overseeing a construction project; a selfemployed computer consultant; or a computer specialist transferred
temporarily to a branch of his employer; fruit-picker on a host
country farm on the basis of a services contract
Balance of payments transactions are primarily
mode 1, mode 2, and [part of] mode 4
Modes of Supply (4)
Example:
 Supply of tourism and travel-related services:
 Mode 2 – consumption abroad
Consumers are outside their home territory to consume
services
 Mode 3 might be involved, e.g. the establishment of a
branch of a hotel chain
 With the presence of a hotel manager, Mode 4, intracompany movement; or a foreign tourist guide present
in the host economy
 Sale of services by international tourism operator
through computer reservation system, Mode 1
Modes of Supply (5)
Example:
A computer services supplier and a consumer are established
in 2 different territories
 The supplier has a commercial presence in a third
territory, Mode 3
 The affiliate may act as intermediary between client and
supplier
 However, most of the supply may be taking place through
Mode 4, i.e. the parent company sends specialist to client
 Part of the services are also provided online, Mode 1
 The affiliate may also be involved in the supply, online,
Mode 1, or itself sending an employee, Mode 4
MSITS: Allocation of BOP/EBOPS to
Modes of Supply
 BPM6/EBOPS largely corresponding to Mode 1:
Mode 1
• Transport(except supporting and auxiliary
services to carriers in foreign ports),
• Telecommunications services
• Information services
• Insurance and pension services
• Financial services
• Fees for franchises (part of charges for
intellectual property n.i.e.)
MSITS: Allocation of BOP/EBOPS to
Modes of Supply
 BPM6/EBOPS largely corresponding to Mode
2:
• Travel (excluding purchases of goods)
Mode 2
• Supporting and auxiliary services to carriers
in foreign ports
• Maintenance and repair services n.i.e.
• Manufacturing services on physical inputs
owned by others
MSITS: Allocation of BOP/EBOPS to
Modes of Supply
 BPM6/EBOPS services transactions, where no single Mode
is dominant
 Information technology consultant may provide
computer services through traveling to non-resident
client (Mode 4), or from his office through
telecommunications (Mode 1); or combination of two
 For construction, companies may want to establish
short-term commercial presence (Mode 3), and/or
post own workers in the host economy (Mode 4)
Extended Balance of Payments Services
Classification (2010 EBOPS)
 The EBOPS is consistent with the
BPM6 standard components
 Gives further detail on residentnonresident transactions in services
than covered in the BPM6
 Developed specifically for MSITS
Foreign Affiliates Statistics (FATS) (1)
 Mode 3, commercial presence: services delivered through
locally established but foreign controlled enterprises
 definition of foreign affiliate
 an enterprise resident in the compiling economy over
which a unit not resident in the economy has control
 similar to direct investment enterprise but only
concerned with enterprises in which the direct investor
has majority interest. (i.e. more than 50% ownership)
FATS(2)
 Establishment of affiliate usually only method that
permits close and continuing contact between provider
and customer
 Sales – measure of service transaction; therefore,
most important variable
 other important variables – employment; value added;
exports and imports of goods and services; and
number of enterprises
 generally required as an adequate assessment
 of economic effects of affiliate operations
 and measures to liberalize the delivery of services
through Mode 3
FATS (3)
 Outside the scope of balance of payments statistics
 Data compiled for:
 inward FATS —foreign-owned affiliates in the
compiling economy
 outward FATS —foreign owned affiliates of the
compiling economy
FATS (4)
 Why FATS?
 to capture aspects of international trade in
services that are out of scope of BPM6
 to understand the phenomenon of growing
integration and globalization
 to monitor commitments under the GATS
Statistics on Activities of
Multinational Enterprises (AMNE)
 not a grouping in MSITS but closely related to FATS
 provides information on foreign controlled enterprises
 data relate to overall holdings and activities of direct
investment enterprises
 wider dataset compiled separately from BOP and
IIP statistics
 complements data on international transactions
 data cover all activities (services as well as mining,
manufacturing, etc.)
What does MSITS Recommend?
 Disaggregate according to EBOPS (start with
items of major importance to country)
 Collect FDI statistics
 FATS basic variables
 EBOPS, FDI, and FATS by partner country and
by industry aggregates
 EBOPS memorandum items
 FATS further details
 Allocation to GATS modes of supply
Current Work
 Update of MSITS in line with the 2008 SNA
and BPM6
 revisions to EBOPS and to FATS
recommendations
 MSITS 2010 Approved by UNSC in February
2010
 EBOPS 2010 fully consistent with BPM6
 Develop recommendations for mode 4
 Develop compilation guidance (FATS, travel
services, remittances)
 Already developed for remittances
Where to Find the Manual?
http://unstats.un.org/unsd/tradeserv/TFSITS/
msits2010.htm