International Trade in Services: Methods of Assessment

In the article the authors describe the main trends in international trade in services, compare different approaches to the assessment of international services trades through the balance of payments and through the evaluation of the statistics in terms of value added. The growing fragmentation of production processes across countries carries important consequences for the world trade and creates new opportunities for the global growth. Under the new conditions of global value chains acceleration, the trade liberalization and the business investment openness in countries are important conditions for sustainable economic growth and protectionism costs have become much more significant than usually perceived. The traditional instruments of trade policy in the form of tariffs do not apply to the quantitative analysis of services trade, taking into account the specific characteristics of services tradability. Trade in services  tends  to  be restricted mainly through market access barriers and through treatment of foreign providers that is less favorable than that of national ones.

The article reviews the evolution of analysis methods for barriers to trade in services and classifies the approaches to quantify the restrictions in services trade. There is also a review of the measures in services trade based on notifications of countries measures under the World Trade Organization.

Current trends in international trade are associated with a slowdown of the material production and the concurrent development and growth of the international trade in services.  The  international  trade  in services has become over the last decades not only one of the most dynamic sectors of the world economy, but also an important component of national economies, and requires an adequate level of state regulation. The development of the service sector requires a comprehensive assessment of trade barriers and regulatory measures. The provisions of the General Agreement on Trade in Services are far behind the practice of measures affecting international trade in services.

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