RESTRICTEDWORLD TRADE
ORGANIZATIONS/WPGR/W/32
15 May 2000
(00-1974)
Working Party on GATS Rules
INTER-AGENCY TASK FORCE ON STATISTICS OF
INTERNATIONAL TRADE IN SERVICES
PROGRESS REPORT, MAY 2000
Background Note by the Secretariat
Responding to a request from the Working Party on GATS Rules, at its meeting of
4-5 May 2000, this Note briefly describes past and future work of the Inter-Agency Task Force on
Statistics of International Trade in Services.   The special focus is on work on the Manual on Statistics of
International Trade in Services and short-term prospects in this area.  The Annex provides a short
overview of the Manual.  More detailed information, in cluding the draft Manual itself, is available in the
Secretariat.
I. MAJOR ACHIEVEMENTS
In 1994, following requests from GATT and UNC TAD representatives, the United Nations
Statistical Commission decided to establish the Inter-Agency Task Force on Statistics of International
Trade in Services  (Task Force), with the following major objectives:
(i) to strengthen co-operation between internat ional organizations in the area of trade in
services statistics, and to liaise with other agencies or groups involved in it;
(ii) to promote the development of internati onal concepts and definitions and classifications
for trade in services statistics;  and
(iii) to improve the availability, quality and comparability of trade in services statistics
collected at international level.
The Task Force is convened by the Organisa tion for Economic Co-operation and Development
(OECD) and consists of members of the Statistical Office of the European Communities (EUROSTAT),
the International Monetary Fund (IMF), the Unite d Nations Statistics Divi sion (UNSD), the United
Nations Conference on Trade and Development (UNCTAD), the World Bank, and the WTO Secretariat.
From the outset, it was agreed  that the Task Force would focus on the statistical requirements
of GATS.  However, given the huge gap between these requirements and available statistical data,
concepts and practices, the Task Force considered its work  as a long-term exercise.S/WPGR/W/32
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It first examined the activities and requirements of  international institutions in this field, and
especially those of the WTO.  It then analysed  existing gaps between statistical frameworks and
statistical needs, and the extent to which a new st atistical framework could contribute to closing these
gaps.
At its fifth meeting, in May 1996, the Task Force decided to develop a conceptual framework
and classifications for statistics on trade in services to be published in a Manual on Statistics of
International Trade in Services  (Manual).  The objective was to meet requirements of GATS as far as
possible, while ensuring compatibility with existing statistical systems, especially the 5th edition of the
Balance of Payments  Manual (BPM5) and the System of National Acc ounts (SNA 1993), and without
creating excessive additional burden on reporting count ries.  It was also decided that the Manual's
guidelines should be suitable for a phased implemen tation (i.e. countries could implement the guidelines
flexibly and progressively, according to, inter alia , their own requirements).
An outline was prepared, and provisional drafts were produced, calling on both external
consultants and contributions from Task Force Members.   These drafts were also reviewed by national
representatives at several meetings of the United Nations and OECD.
The first complete draft of the Manual (5 November 1999) was circulated by the U.N. and the
IMF to national statistical institutions and Central Ba nks of their member countries as part of a world-
wide review, and made publicly available on the OECD's web pages1.  Over 60 National Statistical
Offices, Central Banks and National Economic Institutes responded with comments to the Task Forceby the end of January, 2000.  A vast majority of respondents warmly welcomed the Manual.  They
recognized its positive impact on statistics of trade in services, as well as its usefulness as a guide for
the improvement of statistical compilation systems.  The phased approach recommended in the
Manual was found to be particularly appropriate.  However, many respondent countries noted that
collection of additional statistical data would imply additional burden on compilers and on theirfinancial resources.  A vast majority of them stressed that they would be able to implement the
advanced requirements only in the long term.  In a number of cases, statistical offices were unaware
of the needs of their national trade negotiators.
At its tenth meeting, in February 2000, the Task Force reviewed the countries' comments and
decided on the appropriate modifications to the draft Manual.
II. FUTURE WORK AND PROSPECTS
Members of the Task Force are now redrafting the Manual to take account of comments
received as a result of world-wide consultations with a range of statisticians and users of statistics,
including balance of payments compilers, national accountants, compilers of data on employment and
income, classifications experts, statisticians responsible for the compilation of data on productionand/or use of services, and trade negotiators.  This next draft of the Manual  will be discussed at a
meeting of UN experts in July 2000.  Following this meeting, and after further redrafting as
appropriate, the Manual  will be translated into the official languages of the United Nations (French,
Spanish, Russian, Arabic, and Chinese as well as English) before being presented to the United
Nations Statistical Commission for its approval in 2001.  Following this approval, the Manual  will be
co-published by the European Communities, IMF, OECD, UN, UNCTAD and WTO.
                                                     
1 http://www.oecd.org/std/serv(99)2.pdf.S/WPGR/W/32
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The Manual represents a considerable progress in the area of statistics on trade in services, and
in particular, it provides for:
• a much more detailed classification than currently available (BPM5) for the compilation of trade
in services between residents and non residents;
• concepts and definitions for FA TS statistics (GATS mode3);
• a classification for FATS statistics;  and
• clarification and guidelines on the statis tical treatment of GATS' mode of supply;
However, it should be noted that the first versi on of the Manual will be only a first step towards
fulfilling GATS' statistical needs.  First, the Manual' s classifications still lack considerable detail with
regard to requirements arising from negotiations (ultimately, the detail of the Central Product
Classification would be needed).  Second, availability  of  data broken down by partner countries is
expected only for major items in the classifications.  Third, although partial guidelines on the statistical
treatment of GATS' modes of suppl y are given, it is not expected that countries would be able to
compile complete statistics by mode on supply in the foreseeable future.  Finally, implementation of the
Manual will likely take some time, even for countri es with advanced statistical compilation systems.
Successful implementation will depend on efforts by national statistical agencies and Central Banks,and, above all, on the willingness of governments to provide the necessary resources.S/WPGR/W/32
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ANNEX
Overview of the Manual on Statistics
of International Trade in Services
The first Manual on Statistics of International Trade in Services  (Manual ) is being prepared
by the Interagency Task Force authorized by the United Nations Statistical Commission on Statistics
of International Trade in Services (the Task Force) to meet the needs of a variety of producers and
users of statistics on international trade in services.  These include in particular statistical compilers,
but also governments and international organizations that must use statistical information in
connection with international negotiations pertaining to trade in services, and also businesses andothers that wish to assess developments in internati onal services markets.  A particular impetus for the
preparation of a separate manual on statistics of international trade in services has been the recent
tendency for trade agreements to cover services as well as goods, and the need for statistics both to
guide the negotiations relating to these agreements and to monitor the outcomes.
The Manual describes the four modes through which services may be traded under GATS.
While the Manual  features important new areas in the field of international services statistics, it does
so by building upon, rather than by modifying, in ternationally agreed standards for statistical
compilation.  It  provides a framework and a set of recommendations that will allow for the provision
of a range of statistics on international trade in services.  These recommendations are summarized inChapter 1 and elaborated on in the remainder of the Manual .  Chapter 2 proposes the framework and
describes its links to existing international standards and frameworks.  Chapter 3 focuses on the
compilation of statistics relating to resident-nonresident trade in services, building on the balance of
payments framework described in the fifth edition of the Balance of Payments Manual  (BPM5 ).
Chapter 4 recommends standards for compiling statistics on “foreign affiliates trade in services”, orFATS, drawing to a considerable extent on the concepts and definitions of the System of National
Accounts 1993  (1993 SNA ).
The BPM5  framework contains, inter alia, recommendations for the definition, valuation,
classification, and recording of resident-nonresident trade in services.  By building on this framework,
the Manual recommends extending the BPM5  classification of transactions by type of service to
provide more detail through the Extended Balance of Payments Services (EBOPS) classification.While not yet complete, a draft correspondence ta ble showing the relationship between the EBOPS
classification and version 1.0 of the Central Product Classification is included as an annex to the
Manual .  This table assists in the provision of clear definitions of the various components of the
EBOPS classification.  Except for the treatment of construction services (discussed in subsection
3.8.4 of the Manual ), the recommendations contained in the Manual  are consistent with BPM5 .  Thus,
a country’s balance of payments statistics will provide many of the data that are needed to implement
the recommendations relating to the measurement of resident-nonresident trade in services.
Recommendations are made in the Manual on the attribution of resident-nonresident transactions
across the modes of supply.
As well as providing services by way of trade between residents and nonresidents of an
economy (measured in balance of payments statistics), an economy may also supply services
internationally through the activities of foreign affiliates abroad.  The Manual  recognizes this in its
discussions on and recommendations for FATS statistics, which comprise the major part of the third
mode of supply, commercial presence.  Included are recommendations on (1) the selection of foreignaffiliates to be covered (which follows the definition of foreign-controlled enterprises used in the
1993 SNA) ;  (2) the attribution of FATS statistics (including a discussion on attribution by activity and
by product);  and (3) the variables to be compiled.  While this is a less well-developed area
statistically than the balance of payments statistics, some FATS statistics for foreign-owned affiliatesS/WPGR/W/32
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in the compiling economy may be found in, or derived from, existing statistics on domestic
production, including national accounts statistics based on the recommendations of the 1993 SNA  .
The recommended basic FATS variables discussed in this draft of the Manual  are:  number of
enterprises, sales (turnover) and/or output, employment, value added, and exports and imports ofgoods and services.  Additional FATS variables identified are assets, compensation of employees, net
worth, net operating surplus, gross fixed capital formation, taxes on income, and research and
development expenditures.  The definitions of these variables are drawn from the 1993 SNA .
The final area in which the Manual  moves beyond existing statistical frameworks is in the
area where enterprises producing services in one country employ individuals who are residents of
another country (in the BPM5  and 1993 SNA  sense) on a short-term basis.  While some limited data
are available from balance of payments statistics, there is a need for further development of statistics
related to employment and income of foreign nationals.  However, this area, which is part of the
fourth mode of supply (presence of natural persons), is still under discussion by the Task Force, so
there is relatively little discussion on, or recommendation for, compiling relevant statistics included in
the current draft of the Manual .
The Manual proposes a phased approach to implementation, so that countries, including those
that are beginning to develop statistics on inte rnational trade in services, can implement these
developments gradually and begin to structure available information in line with this new
international standard framework.  The sequence of elements, as suggested, takes into account therelative ease that many compilers may find in their implementation.  However, the order is quite
flexible, so that countries can meet the priority needs of their own institutions.  Full implementation -
to be seen as a long term goal, would represent a considerable increase in the detail of information
available on trade in services.
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