The Top 10 Overlooked Facts About World Trade in Services

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Services create the vast majority of U.S. jobs.

Transcript of The Top 10 Overlooked Facts About World Trade in Services

  • OVERLOOKED WORLD TRADE IN SERVICES FACTS ABOUT
  • Top 10 Overlooked Facts About World Trade In Services 1 Services Create the Vast Majority of U.S. Jobs Services employ about 95 million ofAmericas 110 million private sector workers.The United States is home to thousands of highly competitive services companies in such sectors as audiovisual; finance; insurance; energy services; transportation,logistics,and express delivery services; information technology services; and telecommunications. Source: U.S. Bureau of Labor Statistics; Gresser, Global Works Foundation.
  • Top 10 Overlooked Facts About World Trade In Services 2 Source: World Bank; Gresser, Global Works Foundation. Service industries account for 70% of world gross domestic product (GDP) and employ about 3.2 billion people around the world. The larger the share of services in a countrys economic output,the more prosperous that country is likely to be. Services Make the World More Prosperous
  • Top 10 Overlooked Facts About World Trade In Services 3 Source: Jensen, Peterson Institute for International Economics. Jobs in Services Pay Well Approximately 18 millionAmericans are employed in business services such as software, architectural services,engineering and project management services,and insuranceall of which generate billions of dollars in exports.Their wages are 20% higher on average than those in manufacturing,which employs about 12 million Americans.
  • Top 10 Overlooked Facts About World Trade In Services 4 Source: Office of the U.S. Trade Representative. America Leads World Trade in Services The United States is by far the worlds largest exporter of services.U.S.services exports reached $632 billion in 2012,and the U.S.services trade surplus reached $195 billion.In addition,services sales by foreign affiliates of U.S.multinational corporations topped $1 trillion. Combined,total sales of U.S.services abroad reached approximately $1.7 trillion in 2012.
  • Top 10 Overlooked Facts About World Trade In Services 5 Source: WTO and OECD, Measuring Trade in Value Added. Services generate about half of U.S.exports measured on a value-added basisin large part because services contribute significant value to the production of factories and farms.The same is true of other developed economies. Services Provide the Lions Share of World Trade
  • Top 10 Overlooked Facts About World Trade In Services 6 Source: Jensen, Peterson Institute for International Economics. The Growth Potential for Services Exports Is Huge While U.S.services exports lead the world,their potential for growth is almost untapped.One in four U.S.factories exports,but just one in every 20 providers of business services does so. Just 3% of U.S.services output is exported.
  • Top 10 Overlooked Facts About World Trade In Services 7 Source: Office of the U.S. Trade Representative. The Trade in Services Agreement Promises Big Benefits The United States is now pursuing a high-standard trade agreement in services dubbed theTrade in Services Agreement (TISA).Some 50 countries* are taking part,and they generate 70% of world trade in services.This exciting new accord has the potential to ignite economic growth and job creation in the United States and abroad.
  • Top 10 Overlooked Facts About World Trade In Services 8 Source: Jensen, Peterson Institute for International Economics. Eliminating barriers to trade in services could boost U.S. services exports by as much as $860 billionup from 2012s record $632 billionto as much as $1.4 trillion. Such a dramatic increase could create as many as three million American jobs.The TISA is a once-in-a- lifetime chance to address these trade barriers across dozens of countries. Eliminating ServicesTrade Barriers Could Create Millions of Jobs
  • Top 10 Overlooked Facts About World Trade In Services 9 Source: WTO. Exports of Services Can Take Several Paths For example,a U.S.-based software company can export its products via the Internet (cross-border trade,known as mode 1),provide training to its staff based in Spanish- speaking countries in Panama (consumption abroad, mode 2),sell service contracts through a Japanese affiliate (commercial presence,mode 3),and employ a Dutch national with an H-1B visa at its headquarters (movement of natural persons,mode 4).All fourmodesare important for companies doing business in todays global economy.
  • Top 10 Overlooked Facts About World Trade In Services 10 Source: U.S. Bureau of Economic Analysis; Gresser, Global Works Foundation. U.S.services companies have invested more than $1.6 trillion abroad,creating more than 25,000 foreign affiliates in the process.These firms sold $1.16 trillion worth of services to foreign customers in 2009a sum equivalent to 8.3% of U.S.GDP. Investment Abroad Is a Key Part of U.S. Services Exports
  • Top 10 Overlooked Facts About World Trade In Services 11 References Edward Gresser,ServicesTrade Liberalization as a Foundation of Global Recovery,Progressive Economy Project at the GlobalWorks Foundation,prepared for the Coalition of Service Industries: February 24,2012. J.Bradford Jensen,GlobalTrade in Services: Fear,Facts,and Offshoring,Peterson Institute for International Economics: September 2011. WorldTrade Organization (WTO) and the Organization for Economic Cooperation and Development (OECD), MeasuringTrade inValueAdded,joint initiative and database (www.oecd.org/trade/valueadded): March 15,2012 (ongoing).
  • Top 10 Overlooked Facts About World Trade In Services 12 *Bonus fact: 48 countries are taking part in the ISA negotiations:Australia,Canada,Chile, ChineseTaipei,Colombia,Costa Rica,the European Union (on behalf of its 27 member states),Hong Kong China,Iceland,Israel,Japan, Korea,Mexico,New Zealand,Norway,Pakistan, Panama,Paraguay,Peru,Switzerland,andTurkey as well as the United States.