RESTRICTEDWORLD TRADE
ORGANIZATIONS/CSS/W/44
29 January 2001
(01-0447)
Council for Trade in Services
Special SessionOriginal:  English
COMMUNICATION FROM ARGENTINA
Assessment of Trade in Services:
the Participation of Developing Countries
The attached statement has been received from the delegation of Argentina with the request
that it be circulated to Members of the Council for Trade in Services.
_______________
1. The purpose of this note is to contribute to the assessment of trade in services, in an overall
and sectoral basis, as mandated by Article XIX of the GATS. In order to avoid duplication of work,
reference will be made whenever appropriate to previous publications, such as the WTO AnnualReport or ad-hoc studies prepared by the WTO and UNCTAD Secretariats.
2. It goes without saying that trade in services -in particular as it is understood within the
framework of the GATS- is much less documented than merchandise trade
1, so all the usual caveats
apply in that regard. Even though the paper’s findings are mainly based on Balance of Payments
statistics, which only serve as an imperfect proxy for trade under modes 1 (cross-border),
2 (consumption abroad), and 4 (movement of natural persons) a closer look at available statistics may
still reveal factors and trends of relevance for the current services negotiations.
3. The paper focus is on developing countries taken as a group and, therefore, it does not
necessarily reflect Argentina’s position in these negotiations.
A. OVERVIEW OF TRENDS IN SERVICES TRADE
4. As noted in a recent WTO document,2 “the share of commercial services, measured on a
balance of payments basis, in total world exports and imports of goods and services has remainedvirtually unchanged since the mid-1990s”. In 1999, the services share in total world imports of goods
and services amounted to 19.6 per cent.
5. Cross-border supply has been estimated to be the major component of world trade in services,
accounting for 41 per cent of the total, closely followed by commercial presence with 38 per cent.
                                                     
1 See the WTO Secretariat document S/C/W/27 and Add.1, A Review of Statistics on Trade Flows in
Services,  for further details on the statistical limitations.
2 See S/C/W/27/Add.1, section II.S/CSS/W/44
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Both modes of supply account for some 80 per cent of total trade in services. The share of
consumption abroad represents some 20 per cent of the total3 (See Table 1).
6. More than half of world trade in commercial services is made up of travel and transportation
services (see Table 2).  However, in the last decade, the share of Travel and Transport in total
commercial services declined from 33.8 per cent in 1990 to 32.8 per cent in 1999 in the case of
Travel,4 and from 28.5 per cent in 1990 to 23 per cent in 1999 in the case of Transport; while the
share of the “other commercial services” rose sharply from 37.7 per cent in 1990 to 44.2 per cent in
1999.5
7. It is interesting to note that the BOP category “other commercial services” includes the so-
called producer services, such as financial services, communication services, insurance, computer-
related and other business services.  Human capital intensive producer services seem in fact to have
benefitted the most from technological innovations introduced primarily in developed countries (see
Table 3).
8. Developing countries' services exports seem to be particularly concentrated in travel and
transportation services, and dependence on these two sectors may pose a structural problem for
producing countries since supplies in these two sectors are closely related to the physical movement
of persons and goods -and, thus, to merchandise trade- rather than to movement of knowledge and
information.6
9. Trade in commercial services is highly concentrated. The top 15 traders accounted for 71 per
cent of world exports and 68 per cent of world impor ts. In addition, the share of the top 15 traders of
commercial services has not changed significantly since the mid-1990s and the group of leading
exporters of services largely overlaps with the group of leading importers (See Table 4).
10. The prevalence of developed countries in world services trade is also noteworthy. Developed
countries account for most of trade in commercial services. In 1999, developed countries’ exports
represented 72% of world services exports.7 Additionally, out of the 20 leading traders (both
importers and exporters), 15 are developed countries (See Table 5).
11. Since the conclusion of the Uruguay Round of trade negotiations, the contribution of
developing countries to world trade in services has remained fairly constant.  While in 1994 the16 leading developing countries accounted for 16.45 per cent of world services’ exports, this share
amounted to 16.29 per cent in 1999 (See table 6).
12. The share of services in total trade is more important for developed countries than for most
developing countries. In other words, developed countries are relatively more important as services
exporters while most developing countries appear to be relatively more important as merchandiseexporters. In fact, most developed countries record above-average shares of services in their total
exports, while most developing countries record below-average shares (See tables 9 and 10).
                                                     
3 Guy Karsenty, Assessing Trade in Services by mode of supply, in “GATS 2000: New Directions in
Services Trade Liberalization”, Pierre Sauvé and Robert M. Stern, Editors, Brookings Institution Press,
Washington D.C., 2000.
4 It must be borne in mind that Travel is a blanket category that covers all expenditure by travellers
abroad, including spending for other services like acco mmodation and telecommunications as well as for goods.
5 Based on own calculations
6 Rolf J. Langhammer, Developing Countries as Exporters of  Services: Looking Beyond Success
Episodes, Kiel Working Paper 992, July 2000.
7 Own calculations based on data contained in WTO - International Trade Statistics 2000.S/CSS/W/44
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13. From a global trading perspective, the situation appears just as unbalanced. As highlighted by
UNCTAD, except for a few exceptions, most developing countries have deficits in trade in services.8
In fact, in 1999, out of the 16 leading developing countries, only five recorded export surpluses intrade in commercial services, namely Hong Kong, China; Singapore; Turkey; Thailand; and Egypt
(see Table 5).
B. T
HE PARTICIPATION OF DIFFERENT REGIONS :
14. According to the WTO Secretariat,9 North America and Western Europe continued to record
above-average shares of services in their total exports, while Latin America and Asia remained below
the global average. Africa changed position and in 1999 the services share in its total exports of goods
and services exceeded, by a narrow margin, the world average, although this may be attributed to
weak world markets for major merchandise exports, including oil (See Table 7).
15. Over the past 15 years, North America, in particular the United States, and Asia appear to
have gained ground on world services markets. Both regions' exports rose above the world average.By contrast, services exports from Western Europe, Africa and Latin America grew below the world
average.
10
16. Regional trade balances also show some inte resting variations. According to 1999 Balance-
of-Payments data, North America and Western Europe recorded export surpluses of 67 and 31 billion
dollars, respectively. The United States recorded an export surplus of about 73 billion dollars in 1999,while the European Union’s surplus amounted to 13 billion dollars. In contrast, trade deficits in Latin
America, Africa and Asia amounted to 9 billion, 6 billion, and 72 billion dollars, respectively (See
table 8).
                                                     
8 See Assessment of Trade in Services of Developi ng Countries: possible contribution by UNCTAD
(Job 4235, dated 16 July 1999), paragraph 7.
9 See WTO Secretariat document S/C/W/27/Add.1
10 See WTO Secretariat document S/C/W/27/Add.1 for more details, in particular Table A2 in the
document.S/CSS/W/44
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Table 1:  Trade in Services by Mode of Supply, 1997
Mode Proxy used Value
(billion dollars)Total share in all
(percentage)
Mode 1: Cross border Balance-of-payments
(commercial services minus
Travel)890 41.0
Mode 2: Consumption
abroadBalance of Payments (Travel) 430 19.8
Mode 3: Commercial 
PresenceFATS gross output in services 820 37.8
Mode 4: Presence of
natural personsBalance of Payments
(compensation of employees)30 1.4
Total 2,170 100.0
Source: Guy Karsenty, Assessing trade in services by mode of supply, in "GATS 2000: New
Directions in Services Trade Liberalization" , Pierre Sauvé and Robert M. Stern, Editors,
Brookings Institution Press, Washington D.C., 2000.S/CSS/W/44
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Table 2: World trade in commercial services by category, 1990-1999
(billion dollars and percentage)
Value Share Annual Percentage Change
Exports1999 1990 1999 1996 1997  1998
All commercial services 1,350 100.0 100.0 7 4 1
Transportation 310 28.5 23.0 2 2 -1
Travel 440 33.8 32.8 7 0 0
Other commercial services 600 37.7 44.2 9 8 2
Imports
All commercial services 1,345 100.0 100.0 6 3 2
Transportation 373 32.1 27.7 2 2 -1
Travel 412 32.0 30.6 6 1 1
Other commercial services 561 35.9 41.7 8 5 5
Source: WTO Secretariat document S/C/W/27/Add.1S/CSS/W/44
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Table 3: World Trade in "other commercial services" by category, 1996-1998
(In percentage)
Share
1996 1997 1998
Other commercial services 100 100 100
Communications 5 5 5
Construction 7 7 7
Insurance 5 5 5
Financial 9 9 10
Computer and information 3 3 5
Royalties and licence fees 11 11 12
Other businesses 59 59 55
Personal, cultural and recreational 2 2 3
Source: WTO Secretariat document S/C/W/27/Add.1
Table 4: Leading Exporters and importers in world trade in commercial services, 1999.
(Billion dollars and share of world trade)
Rank Exporters Value Share Rank Importers Value Share
1 United States 253,4 18.8 1 United States 180,4 13.4
2 UK 101,5 7.5 2 Germany 132,8 9.9
3 France 82,6 6.1 3 Japan 114,2 8.5
4 Germany  79,3 5.9 4 UK 81,4 6
5 Italy 61,2 4.5 5 France 63,1 4.7
6 Japan 60,3 4.5 6 Italy 58,4 4.3
7 Netherlands 54,2 4 7 Netherlands 47,5 3.5
8 Spain 53 3.9 8 Canada 38,5 2.9
9 Belgium-
Luxembourg39 2.9 9 Belgium-
Luxembourg36,6 2.7
10 Hong Kong,
China34,9 2.6 10 China 30,7 2.3
11 Canada 34,2 2.5 11 Spain 30 2.2
12 Austria 30,5 2.3 12 Austria 28,3 2.1
13 Switzerland 26,3 1.9 13 Korea, Rep of 26,1 1.9
14 Korea, Rep.
Of24,8 1.8 14 Ireland 26,1 1.9
15 China 23,7 1.8 15 Hong Kong,
China24,5 1.8
16 Singapore 23,6 1.7 16 Chinese Taipei 23,5 1.7
17 Sweden 18,4 1.4 17 Sweden 23 1.7
18 Australia 17,2 1.3 18 Singapore 18,8 1.4
19 Turkey 16 1.2 19 Australia 17,9 1.3
20 Denmark 15,8 1.2 20  Norway 17,9 1.3
Source: WTO International Trade Statistics 2000.S/CSS/W/44
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Table 5: Leading Developing Economies in world trade in commercial services, 1999
(Billion dollars and share of world trade)
Rank Exporters Value Share Rank Importers Value Share
1 Hong Kong, China 34,8  2.58 1 China 30,6 2.28
2 Korea, Rep. Of 24,8 1.84 2 Korea, Rep. Of 26,1 1.94
3 China 23,7 1.76 3 Hong Kong,
China24,4 1.82
4 Singapore 23,6 1.75 4 Singapore 18,7 1.40
5 Turkey 16 1.19 5 India 17,1 1.28
6 Thailand 14,1 1.05 6 Malaysia 14,3 1.06
7 India 13,9 1.03 7 Thailand 13,9 1.04
8 Malaysia 11,9 0.89 8 Mexico 13,8 1.03
9 Mexico 11,8 0.88 9 Brazil 11,9  0.89
10 Israel 10,3 0.76 10 Indonesia 11,3 0.84
11 Egypt 9,3 0.70 11 Israel 10,8 0.80
12 Brazil 6,8 0.50 12 Turkey 8,3 0.62
13 Philippines 4,8 0.35 13 Argentina 8,2 0.61
14 South Africa 4,8 0.35 14 Philippines 7,5 0.56
15 Indonesia 4,6 0.34 15 Egypt 5,9 0.44
16 Argentina 4,3 0.32 16 South Africa 5,2 0.39
Total 16.29 Total 17.00
Source: WTO International Trade Statistics 2000.S/CSS/W/44
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Table 6: Share of Developing Country Exporters in World trade in commercial services11
1994 1999
Value
(billion dollars)Share of world exports
(percentage)Value
(billion dollars)Share of world exports
(percentage)
183.7 17.75 234.0 17.37
Source: Own calculations based on WTO data
Table 7:  Share of goods and commercial services in total trade of selected regions and 
economies, 1999.
(billion dollars and percentage, based on balance of payments data)
Exports Imports
Value Percentage share Value Percentage share
Total Goods Commercial
servicesTotal Goods Commercial
services
World 6890 80.4 19.6 6870 80.4 19.6
NorthAmerica
121216 76.3 23.7 1469 85.1 14.9
LatinAmerica358 85.1 14.9 386 83.8 16.2
Western
Europe2934 78.2 21.8 2822 78.4 21.6
Africa 147 80.1 19.9 158 77.7 22.3
Asia Pacific 1788 85.3 14.7 1616 79.2 20.8
Source: WTO Secretariat document S/C/W/27/Add.1
                                                     
1117 leading developing countries
12 Only US and Canada. Mexico in considered as part of Latin America.S/CSS/W/44
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Table 8: World trade of commercial services by selected region, 1999
(In billion dollars)
Exports ImportsTrade
Balance
World 1,350 1,345
North America 288 219 69
        United States 253 180 73
Latin America 53 62 - 9
        Mexico 12 14 - 2
        Brazil 7 12 - 5
        Argentina 4 8 - 4
Western Europe 640 609 31
        EU 574 561 13
Africa 29 35 - 6
Asia 264 336 - 72
        Japan 60 114 - 54
Source: Own calculations based on WTO Secretariat document S/C/W/27/Add.1.S/CSS/W/44
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Table 9: Share of goods and commercial services in total exports of developed countries, 
1999
(billion dollars and percentage, based on balance of payments data).
EXPORTS
Value Percentage Share
Total Goods Commercial Services
World 6890 80.4 19.6
USA 939 73.0 27.0
Canada 277 87.7 12.3
Austria 94 67.6 32.4
Belgium-Luxembourg 192 79.6 20.4
Denmark 65 75.8 24.2
Finland 48 86.4 13.6
France 381  78.3 21.7
Germany 619 87.2 17.3
Greece 15 34.5 65.5
Ireland 81 82.7 17.3
Italy 292 79.0 21.0
Netherlands 222 75.6 24.4
Norway 61 74.8 25.2
Portugal 34 75.6 24.4
Spain 164 67.7 32.3
Sweden 104 82.2 17.8
Switzerland 122 78.4 21.6
UK 369 72.5 27.5
Australia 73 76.5 23.5
Japan 464 87 13
New Zealand 17 74.8 25.2
Source: WTO International Trade Statistics 2000S/CSS/W/44
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Table 10: Share of goods and commercial services in total exports of selected developing
countries, 1999
(Billion dollars and percentage, based on balance of payments data)
EXPORTS
Value Percentage share
Total Goods Commercial Services
World 6890 80.4 19.6
Argentina 28 84.5 15.5
Brazil 55 87.7 12.3
Chile 19 80.8 19.2
Colombia 14 86.7 13.3
Mexico 149 92.0 8.0
Venezuela 20 93.4 6.6
Turkey 45 64.7 35.3
Egypt 15 36.1 63.9
Morocco 10 72.4 27.6
Nigeria 14 92.9 7.1
South Africa 33 85.6 14.4
Tunisia 9 68.0 32.0
China 218 89.2 10.8
Hong Kong, China 210 83.4  16.6
India 51 72.9 27.1
Indonesia 53 91.3 8.7
Korea, Rep. of 170 85.4 14.6
Malaysia 96 87.5 12.5
Philippines 39 87.7 12.3
Singapore 139 83.0 17.0
Thailand 71 80.0 20.0
Source: WTO International Trade Statistics 2000S/CSS/W/44
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Methodological Annex
For the purposes of this paper, the followi ng countries are cons idered as “developed
countries":13
EU Member states (Austria, Belgium, Denmark,  Finland, France, Germany, Greece, Ireland, Italy,
Luxembourg, Netherlands, Portugal, Spain, Sweden, UK).
United States
CanadaJapan
Iceland
Australia
Norway
SwitzerlandNew Zealand
__________
                                                     
13 The same countries are grouped as “industrial countries” in the IMF statistics.