6th OECD-Eurostat Meeting of Experts in Trade-in-Services (TIS) Tour Europe, 14th September 2005 The...

6th OECD-Eurostat Meeting of Experts in Trade-in-Services (TIS)

Tour Europe, 14th September 2005

The degree of openness of services industries and comparative

advantages in services

Isabelle RabaudIsabelle RabaudLecturer at University of OrléansLecturer at University of Orléans

Research Affiliate at LEOResearch Affiliate at [email protected]@univ-orleans.fr

"Degree of openness in services" - OEC"Degree of openness in services" - OECD-Eurostat TIS - 14th september 2005 - D-Eurostat TIS - 14th september 2005 - Paris - Isabelle Rabaud - LEOParis - Isabelle Rabaud - LEO

22

Services are feebly tradedServices are feebly traded

Services account for 74,2 % of value Services account for 74,2 % of value added created in OCDE in 2002.added created in OCDE in 2002.

Trade in services only represents 21.8 % Trade in services only represents 21.8 % of exports and 21.2 % of imports en 2002.of exports and 21.2 % of imports en 2002.

Services are traded according to four Services are traded according to four modes :modes : cross-border supply,cross-border supply,

consumption abroad (tourism),consumption abroad (tourism),

commercial presence (FDI),commercial presence (FDI),

presence of natural persons.presence of natural persons.


33

PURPOSESPURPOSES

Measuring the degree of international Measuring the degree of international openness in each service industry.openness in each service industry.Estimate comparative advantage of Estimate comparative advantage of each country in the different service each country in the different service industries.industries.Therefore, the inconsistencies of Therefore, the inconsistencies of trade in services’ statistics have to be trade in services’ statistics have to be corrected and matching between data corrected and matching between data on trade and statistics of value added on trade and statistics of value added (production) has to been obtained. (production) has to been obtained.


44

The DATAThe DATA

The joint OECD-Eurostat database of trade The joint OECD-Eurostat database of trade in services:in services:– 29 member countries (BLEU versus Belgium and 29 member countries (BLEU versus Belgium and

Luxembourg),Luxembourg),– 85 heading of services et 6 subdivisions,85 heading of services et 6 subdivisions,– Data in millions of dollars from 1970 to 2002.Data in millions of dollars from 1970 to 2002.Services are split into: transportation, Services are split into: transportation, travel, other services; the latter are travel, other services; the latter are subdivided into 50 items:.subdivided into 50 items:.The joint OECD-Eurostat database gathers The joint OECD-Eurostat database gathers statistics of national balance of payments. statistics of national balance of payments. But, countries begin registering in different But, countries begin registering in different years and have different sector coverage.years and have different sector coverage.


55

The deficiencies of the joint OECD-The deficiencies of the joint OECD-

Eurostat databaseEurostat database (1) The choice of the first (1) The choice of the first yearyear

Only Australia, Canada and New Zealand Only Australia, Canada and New Zealand provide data since 1970.provide data since 1970.In 1985, 17 countries register data on trade in In 1985, 17 countries register data on trade in services; they represent 74.5 % of credits and services; they represent 74.5 % of credits and 69.1 % of debits of OECD in 2002.69.1 % of debits of OECD in 2002.In 1992, 25 countries indicate data, covering In 1992, 25 countries indicate data, covering 94.8 % of credits and 93.8 % of debits in 2002. 94.8 % of credits and 93.8 % of debits in 2002. Statistics for Czech Republic are only available Statistics for Czech Republic are only available from 1993 on, and those of Slovakia only since from 1993 on, and those of Slovakia only since 1994.1994.1992 is retained as first year for measuring 1992 is retained as first year for measuring comparative advantagecomparative advantage


66


Eurostat databaseEurostat database (2) The choice of countries(2) The choice of countries

Denmark supplies information only for 3 Denmark supplies information only for 3 % of services industries among “other % of services industries among “other services”; it represents 2 % trade in services”; it represents 2 % trade in services in 2002. It will be excluded services in 2002. It will be excluded from the study.from the study.

Switzerland provides data only for 19 % Switzerland provides data only for 19 % of services products, but concentrate a of services products, but concentrate a greater share of trade: 2.4 % of credits greater share of trade: 2.4 % of credits and 1.3 % of debits. It was retained.and 1.3 % of debits. It was retained.


77

The share of countries in trade in The share of countries in trade in services (2002)services (2002)

COUNTRYCOUNTRY Share of Share of creditscredits

Share of Share of debitsdebits

FranceFrance 6.9 %6.9 % 5.7 %5.7 %

GermanyGermany 8.5 %8.5 % 12.6 %12.6 %

IrelandIreland 2.3 %2.3 % 3.4 %3.4 %

ItalyItaly 4.8 %4.8 % 5.3 %5.3 %

JapanJapan 5.3 %5.3 % 9.0 %9.0 %

NetherlandsNetherlands 4.5 %4.5 % 4.8 %4.8 %

SpainSpain 5.0 %5.0 % 3.2 %3.2 %

United United KingdomKingdom

10.4 %10.4 % 9.0 %9.0 %

United StatesUnited States 23.1 %23.1 % 19.1 %19.1 %


88


Eurostat databaseEurostat database (3) The choice of activities(3) The choice of activities

The “other services” are subdivided into The “other services” are subdivided into 9 industries of non equal weight in 9 industries of non equal weight in international trade.international trade.

The degree of subdivision available The degree of subdivision available varie considerably :varie considerably :– “ “telecommunication services” are in the telecommunication services” are in the

first subdivision of “communications first subdivision of “communications services”,services”,

– ““legal services” are in the fourth legal services” are in the fourth subdivision of “other business services”.subdivision of “other business services”.


99

Share of services in trade Share of services in trade (2002)(2002)

IndustriesIndustries Share in Share in

credits credits Share in Share in debitsdebits

Communications servicesCommunications services 3.9 %3.9 % 4.9 %4.9 %

Construction servicesConstruction services 3.6 %3.6 % 3.0 %3.0 %

Insurance servicesInsurance services 7.7 %7.7 % 6.2 %6.2 %

Financial servicesFinancial services 12.2 %12.2 % 7.0 %7.0 %

Computer and information Computer and information servicesservices

6.4 %6.4 % 4.7 %4.7 %

Royalties and license feesRoyalties and license fees 12.4 %12.4 % 13.3 %13.3 %

Other business servicesOther business services 44.6 %44.6 % 51,3 %51,3 %

Personal, cultural and Personal, cultural and recreational servicesrecreational services 3.1 %3.1 % 2.7 %2.7 %

Government services, n. i. Government services, n. i. e.e.

5.8 %5.8 % 6.4 %6.4 %


1010


Eurostat databaseEurostat database (3) The choice of activities, following(3) The choice of activities, following

Two criteria to select services industries :Two criteria to select services industries :– a share in credits and debits of “other a share in credits and debits of “other

services” exceeding 5 %,services” exceeding 5 %,– statistics supplied by at least 10 countries in statistics supplied by at least 10 countries in

1995 and at least 15 in 2002.1995 and at least 15 in 2002.

The subdivision of “communications The subdivision of “communications services” is added :services” is added :– “ “postal and courier services”,postal and courier services”,– ““telecommunication services”. telecommunication services”. Some activities necessary in order to Some activities necessary in order to form a partition are alsa included.form a partition are alsa included.


1111

(3) The choice of activities, end(3) The choice of activities, end

24 activities have been thus selected :24 activities have been thus selected :– ““communication services” are split into “postal and communication services” are split into “postal and

courier services” and “telecommunication services”,courier services” and “telecommunication services”,– ““computer services” are distinguished from “information computer services” are distinguished from “information

services”, services”, – ““other business services” are broken down into: other business services” are broken down into:

“merchanting and other related-services” (269), “merchanting and other related-services” (269), “operational leasing services” (272), “miscellaneous “operational leasing services” (272), “miscellaneous business, professional and technical services” (273):business, professional and technical services” (273):

“ “ legal, accounting, management consulting, and public legal, accounting, management consulting, and public relations” (274),relations” (274),““advertising, market research, and public opinion polling” advertising, market research, and public opinion polling” (278),(278),““Research and development” (279),Research and development” (279),““Architectural, engineering, and other technical services” Architectural, engineering, and other technical services” (280),(280),““agricultural, mining, and on-site processing services” agricultural, mining, and on-site processing services” (281),(281),““Other business services” (284),Other business services” (284),““Services between affiliated enterprises, n. i. e.” (285).Services between affiliated enterprises, n. i. e.” (285).

Other services industries are not subdivided.Other services industries are not subdivided.


1212

The inconsistencies of dataThe inconsistencies of dataCorrection are made in statistics of trade in Correction are made in statistics of trade in services to insure that the aggregate is equal services to insure that the aggregate is equal to the sum of its components.to the sum of its components.

Sector disaggregation of value added or Sector disaggregation of value added or production in STAN database remains weak: production in STAN database remains weak: 8 services industries.8 services industries.

Services industries break down differs for Services industries break down differs for value added (production) and trade:value added (production) and trade:– ISIC and EBOPS identify different activities ;ISIC and EBOPS identify different activities ;– Availability of data, from a sector point of view, Availability of data, from a sector point of view,

differs between STAN database and the joint differs between STAN database and the joint OECD-Eurostat database of trade in services.OECD-Eurostat database of trade in services.


1313

Simplified matching: ISIC-EBOPSSimplified matching: ISIC-EBOPS

EBOPSEBOPS ISICISIC

205: Transportation205: Transportation 60-63: Transport and 60-63: Transport and storagestorage

236: Travel236: Travel 55: Hotels and restaurants55: Hotels and restaurants

245: Communications 245: Communications servicesservices

64: Post and 64: Post and telecommunicationstelecommunications

253: Insurance + 262: 253: Insurance + 262: Financial servicesFinancial services

65-67: Financial 65-67: Financial intermediationintermediation

262: Computer and 262: Computer and information servicesinformation services

72: Computer and related 72: Computer and related activitiesactivities

268: Other business services268: Other business services 70-74: Real estate, renting 70-74: Real estate, renting and business activitiesand business activities

269: Merchanting and other 269: Merchanting and other trade-related servicestrade-related services

50-52: Wholesale and 50-52: Wholesale and retail trade; repairsretail trade; repairs

272: Operational leasing 272: Operational leasing servicesservices

71: Renting of machinery and 71: Renting of machinery and equipmentequipment

279: Research and 279: Research and developmentdevelopment

73: Research and 73: Research and developmentdevelopment

287: Personal, cultural and 287: Personal, cultural and recreational servicesrecreational services

81: Education + 85: Health + 81: Education + 85: Health + 90-93: Other community, social 90-93: Other community, social and personaland personal servicesservices


1414

Concomitant availability of trade Concomitant availability of trade and VA dataand VA data

IndustriesIndustries DEUDEU ESPESP FRAFRA GBRGBR IRLIRL ITAITA JPNJPN NLDNLD USAUSA

CommunicatiCommunicationon

91-91-0202

85-85-0202

85-85-0202

85-85-0202

85-85-0202

91-91-0202

92-92-0202

86-86-0101

Financial Financial intermediatiintermediationon

91-91-0202

85-85-0202

85-85-0202

96-96-0202

98-98-0202

85-85-0202

91-91-0202

95-95-0202

86-86-0101

Computer Computer and and information information s. s.

91-91-0202

95-95-0101

92-92-0202

92-92-0101

92-92-0202

95-95-0202

Other Other business s.business s.

91-91-0202

85-85-0202

85-85-0202

85-85-0202

98-98-0202

85-85-0202

91-91-0202

92-92-0202

86-86-0101

MerchantingMerchanting 91-91-0202

85-85-0202

85-85-0202

85-85-0202

98-98-0202

85-85-0202

92-92-0202

96-96-0101

Operational Operational leasing leasing servicesservices

91-91-0202

95-95-0101

92-92-0202

92-92-0101

92-92-0202

R & DR & D 91-91-0202

95-95-0101

91-91-0202

96-96-0101

92-92-0202

Personal, Personal, cult. s.cult. s.

91-91-0202

85-85-0202

85-85-0202

92-92-0202

00-00-0202

85-85-0202

91-91-0202

95-95-0202

86-86-0101


1515

Concomitant availability of trade and Concomitant availability of trade and production dataproduction data

IndustriesIndustries DEUDEU ESPESP FRAFRA GBRGBR ITAITA JPNJPN NLDNLD USAUSA

CommunicatiCommunicationon

91-91-0202

95-95-0000

85-85-0202

92-92-0101

92-92-0202

91-91-9898

92-92-0202

87-87-0101

Financial Financial intermediatiintermediationon

91-91-0202

95-95-0000

85-85-0202

96-96-0101

85-85-0202

91-91-0202

95-95-0202

87-87-0101

Computer Computer and and information information s. s.

91-91-0202

95-95-0000

85-85-0202

92-92-0101

92-92-0202

95-95-0202

Other Other business s.business s.

91-91-0202

95-95-0000

92-92-0202

89-89-0101

85-85-0202

91-91-0202

92-92-0202

87-87-0101

MerchantingMerchanting 91-91-0202

95-95-0000

85-85-0202

95-95-0101

85-85-0202

92-92-0202

0101

Operational Operational leasing leasing servicesservices

91-91-0202

95-95-0000

85-85-0202

92-92-0101

92-92-0202

R & DR & D 91-91-0202

95-95-0000

92-92-0202

96-96-0101

92-92-0202

Personal, Personal, cult. s.cult. s.

91-91-0202

95-95-0000

85-85-0202

89-89-0101

85-85-0202

91-91-0202

95-95-0202

86-86-0101


1616

Degree of openness (2002)Degree of openness (2002)COUNTRIECOUNTRIE

SSServices Services

in VAin VARate of Rate of open.open.

(C+D)/(C+D)/(2.VA)(2.VA)

Rate of Rate of open.open.(C+D)/(C+D)/

(2.PROD))(2.PROD))

FranceFrance 72.9 %72.9 % 8.0 %8.0 % 5.2 %5.2 %

GermanyGermany 70.0%70.0% 9.9 %9.9 % 6.5 %6.5 %

IrelandIreland 55.7 %55.7 % 56.2 %56.2 % n. a.n. a.

ItalyItaly 70.3 %70.3 % 7.9 %7.9 % 4.8 %4.8 %

Japan*Japan* 68.6 %68.6 % 3.1 %3.1 % 2.1 %2.1 %

NetherlandsNetherlands 72.6 %72.6 % 20.0 %20.0 % 12.2 %12.2 %

SpainSpain 68.3 %68.3 % 19.2 %19.2 % 8.0 %8.0 %

United United KingdomKingdom

73.1 %73.1 % 11.3 %11.3 % 5.9 %5.9 %

United United StatesStates

77.3 %77.3 % 3.3 %3.3 % 2.2 %2.2 %

OECDOECD 74.2 %74.2 %


1717

Communications services (2002)Communications services (2002)

COUNTRIESCOUNTRIES Degree of Degree of open. open.

(C+D)/(2.VA)(C+D)/(2.VA)

Degree of Degree of open. open.

(C+D)/(C+D)/(2.PROD)(2.PROD)

FinlandFinland 39.9 %39.9 % 3.79 %3.79 %

FranceFrance 7.1 %7.1 % 3.77 %3.77 %

GermanyGermany 5.0 %5.0 % 3.1 %3.1 %

ItalyItaly 7.3 %7.3 % 4.7 %4.7 %

JapanJapan 1.2 %1.2 % 1.1 %***1.1 %***


SpainSpain 6.0 %*6.0 %* 3.0 %**3.0 %**

United KingdomUnited Kingdom 6.3 %6.3 % 4.0 %*4.0 %*

United States*United States* 1.4 %1.4 % 0.8 %0.8 %


1818

Financial intermediation (2002)Financial intermediation (2002)


(C+D)/(2.VA)(C+D)/(2.VA)



FinlandFinland 9.4 %9.4 % 0.8 %0.8 %

FranceFrance 4.1 %4.1 % 2.0 %2.0 %

GermanyGermany 11.5 %11.5 % 4.8 %4.8 %

ItalyItaly 3.3 %3.3 % 1.8 %1.8 %

JapanJapan 1.4 %1.4 % 1.1 %1.1 %

NetherlandsNetherlands 7.1 %7.1 % 4,2 %4,2 %

SpainSpain 7.7 %7.7 % 4.9 %**4.9 %**




1919

Computer and information Computer and information services (2002)services (2002)


(C+D)/(2.VA)(C+D)/(2.VA)



FinlandFinland 247.5 %247.5 % 11.6 %11.6 %

FranceFrance 4.2 %4.2 % 2.3 %2.3 %

GermanyGermany 15.7 %15.7 % 11.9 %11.9 %

ItalyItaly -- 2.2 %2.2 %

JapanJapan -- --


SpainSpain 32.7 %*32.7 %* 23.1 %**23.1 %**

United United Kingdom*Kingdom*

8.8 %8.8 % 4.8 %4.8 %

United StatesUnited States -- --


2020

Other business services (2002)Other business services (2002)COUNTRIESCOUNTRIES Degree of Degree of

open. open.

(C+D)/(2.VA)(C+D)/(2.VA)



FinlandFinland 25.4 %25.4 % --

FranceFrance 5.9 %5.9 % 4.0 %4.0 %

GermanyGermany 6.9 %6.9 % 5.2 %5.2 %

IrelandIreland 64.8 %64.8 % --

ItalyItaly 7.9 %7.9 % 5.6 %5.6 %

JapanJapan 2.4 %2.4 % 1.8 %1.8 %


SpainSpain 13.1 %13.1 % 8.6 %**8.6 %**




2121

Personal, cultural and Personal, cultural and recreational serv. (2002)recreational serv. (2002)


(C+D)/(2.VA)(C+D)/(2.VA)



FinlandFinland 1.66 %1.66 % 0.12 %0.12 %

FranceFrance 0.88 %0.88 % 0.62 %0.62 %

GermanyGermany 0.44 %0.44 % 0.31 %0.31 %

IrelandIreland 1.29 %1.29 % --

ItalyItaly 0.55 %0.55 % 0.33 %0.33 %

JapanJapan 0.15 %0.15 % --


SpainSpain 1.21 %1.21 % 0.93 %**0.93 %**




2222

Degree of openness, conclusionDegree of openness, conclusion

the degree of openness in services industries remains the degree of openness in services industries remains highest in small countries: Finland, BLEU, Austria and highest in small countries: Finland, BLEU, Austria and Netherlands,Netherlands,United Kingdom is systematically more opened than United Kingdom is systematically more opened than United States, penalised by the size of their internal United States, penalised by the size of their internal market,market,““research and development” appears as the more research and development” appears as the more opened sector with a rate superior to 20 % in most opened sector with a rate superior to 20 % in most countries; “computer and information services”, countries; “computer and information services”, “operational leasing services” are also relatively “operational leasing services” are also relatively opened; “communications services” and financial opened; “communications services” and financial intermediation show a degree of openness slightly intermediation show a degree of openness slightly smaller; finally, in “personal, cultural and recreational smaller; finally, in “personal, cultural and recreational services”, the rate is rarely higher than 1 %, in line services”, the rate is rarely higher than 1 %, in line with the arbitrated nature of these activities.with the arbitrated nature of these activities.


2323

Comparative advantage in servicesComparative advantage in services


2424

Comparative advantage, summaryComparative advantage, summaryGermany and Japan appear neatly specialised in Germany and Japan appear neatly specialised in goods and show a comparative disadvantage in goods and show a comparative disadvantage in services, in particular in travel. services, in particular in travel. A high specialisation in “other services” is observed A high specialisation in “other services” is observed in United States and United Kingdom, mostly in in United States and United Kingdom, mostly in “financial services” and “other business services”, “financial services” and “other business services”, but also in “royalties and license fees” for the former, but also in “royalties and license fees” for the former, while they have a comparative disadvantage in goods. while they have a comparative disadvantage in goods. Comparative advantage of France in “travel” and, to Comparative advantage of France in “travel” and, to a lesser extent, in “other services”, is accompanied a lesser extent, in “other services”, is accompanied by an important comparative disadvantage in goods by an important comparative disadvantage in goods and transport. and transport. Comparative advantage of Ireland in « computer and Comparative advantage of Ireland in « computer and information services » is associated with important information services » is associated with important comparative disadvantages in « royalties and license comparative disadvantages in « royalties and license fees » and in « other business services ». fees » and in « other business services ». Finally, Mexico is characterised by an important Finally, Mexico is characterised by an important comparative disadvantage in insurance services. comparative disadvantage in insurance services. Results are not modified if contribution to balance is Results are not modified if contribution to balance is reported to trade in services only, excluding goods.reported to trade in services only, excluding goods.


2525

ConclusionConclusionThis study allows to propose three This study allows to propose three recommendation in terms of statistics of recommendation in terms of statistics of international trade in services:international trade in services:

– an increase of the degree of sector, an increase of the degree of sector, geographic and cross sector-geographic geographic and cross sector-geographic detail is desirable ;detail is desirable ;

– this work of sector disaggregation should be this work of sector disaggregation should be undertaken hand in hand for statistics of undertaken hand in hand for statistics of international trade in services and for international trade in services and for national data;national data;

– the improvement of sector ventilation should the improvement of sector ventilation should be implemented the same year for a given be implemented the same year for a given industry in all EU and OECD countries in industry in all EU and OECD countries in order to identify the break-downs occurring order to identify the break-downs occurring at the same time in all countries.at the same time in all countries.

6th OECD-Eurostat Meeting of Experts in Trade-in-Services (TIS) Tour Europe, 14th September 2005 The...

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