Compared with the levels achieved at the end of the last century, trade in goods appears to have declined in importance relative to GDP, especially in economies with growing service sectors. Deducting value added by services from GDP thus provides a better measure of the relative size of merchandise trade than physical output, although it neglects the growing services component of most goods output. Trade in services, traditionally called invisibles, is becoming an important element of global integration. The difference between the growth of real trade in goods and services and the growth of GDP helps to identify economies with dynamic trade regimes. Tariffs provide one indication of an economy s openness, but they are not definitive.
Countries typically have an array of tariffs that are applied to different partners.
Thus net flows, the sum of credits and debits, represent a balance in which many transactions are canceled out. Gross flows are a better measure of integration because they measure the total value of financial transactions during a given period. The investment indicators in the table were constructed from data recorded at the most detailed level available. Higher-level aggregates tend to be affected by the netting out of credits and debits and so produce a smaller total. The comparability of these indicators between countries and over time is affected by the accuracy and completeness of balance of payments records and by their level of detail.