"Services" refers to a range of economic activities that involve the sale and delivery of an intangible product, such as audiovisual, construction, and computer and related services; energy; express delivery; e-commerce; financial, accounting, and legal services; retail and wholesaling; transportation; telecommunications; and travel. For many countries, including the United States, trade in services is a large and growing component of their overall trade. The 1995 World Trade Organization (WTO) General Agreement on Trade in Services (GATS), and subsequent annexes, established basic rules for global trade in services. The purpose of the ongoing Trade in Services (TiSA) negotiations is to build on those rules by further increasing liberalization among the 23 negotiating parties, including the United States and European Union (EU), to open markets to foreign service providers and enhance rules governing services trade. Congress has interest in the TiSA negotiations, as services accounted for $750.9 billion (33%) of U.S. exports in 2015. Congress also has a direct role in overseeing the ongoing TiSA negotiations, including in the context of the U.S. trade negotiating objectives on services it set under the Trade Promotion Authority (TPA) legislation passed in June 2015 ( P.L. 114-26 ). If TiSA is concluded, Congress would face legislation to approve and implement U.S. commitments under TiSA. This report provides a brief overview of U.S. trade in services, background on services in U.S. trade agreements, and an in-depth discussion of the ongoing TiSA negotiations. For more information on trade in services, please see CRS Report R43291, U.S. Trade in Services: Trends and Policy Issues , by [author name scrubbed]. For an executive-level summary of the TiSA negotiations, please see CRS In Focus IF10311, Trade in Services Agreement (TiSA) Negotiations , by [author name scrubbed]. The United States is a global leader in services and the service sector is an important part of the overall U.S. economy. Services accounted for 78% of U.S. private sector gross domestic product (GDP) and for 91.8 million (82%) private sector employees in 2015. Services encompass a broad range of economic participants and activities from express delivery to education and digital trade. Services not only function as end-use products but are often referred to as the "lifeblood" of the rest of the economy, facilitating goods and enhancing productivity and overall competitiveness of an economy. Global value chains, where different stages of production are located in different countries, are redefining the role that services play in international trade. Today, more than half of global manufacturing imports are intermediate goods traveling within supply chains, while over 70% of the world's services imports are intermediate services. Intermediate services embedded within a value chain include, for example, transportation, logistics, and distribution to move goods along; research and development to invent new products; telecommunications to open e-commerce channels; business services such as legal, accounting, marketing or human resources; and financial services to provide credits for the manufacture and consumption of goods. Compared to goods, the basic characteristics of services are complex. Services are intangible and can be conveyed in various formats, including electronically and direct provider-to-consumer contact. To address this complexity, members of the WTO have adopted a system of classifying four modes of delivery for services to measure trade in services (see the text box below). These modes are also used to classify government policies that affect trade in services in international agreements. Distinguishing among the various modes of delivery of services is important for analyzing and measuring the volume of services trade, and because the different modes of delivery can raise different policy issues. There are two distinct categories for measuring trade in services: cross-border trade and services supplied through affiliates. Cross-border services trade data measures U.S. exports and imports, and includes Modes 1, 2, and 4, as noted above. Looking at total cross-border trade, in 2015, services accounted for 33.2% of the $2.2 trillion total U.S. exports (of goods and services) and 17.7% of the $2.76 trillion total U.S. imports. The United States has continually realized surpluses in services trade, which have partially offset large trade deficits in goods trade in the U.S. current account. Many services require direct contact between the supplier and consumer and, therefore, service providers often need to establish a presence in the country of the consumer through foreign direct investment (FDI) as characterized by Mode 3. In 2013, U.S. firms supplied $1.3 trillion in services to foreigners through their majority-owned foreign affiliates. In 2013, foreign firms sold $878.5 billion in services to U.S. residents through their majority-owned foreign affiliates located in the United States ( Table 1 ). Unlike goods trade where many trade barriers are primarily at the border (e.g., tariffs or quotas), restrictions on services trade occur largely within the importing country, so-called "behind-the-border" barriers. These non-tariff barriers (NTBs) are often in the form of government regulations. Governments regulate service industries to pursue legitimate policy objectives and protect consumers from harmful or unqualified providers (e.g., licensing doctors to ensure they have the relevant medical training to protect public health). Concerns may arise if regulations are protectionist or are applied in a discriminatory and unnecessarily trade restrictive manner to foreign service providers that limits market access, favoring domestic providers. Because services transactions more often require direct contact between the consumer and provider than is the case with goods trade, many of the "trade barriers" that foreign companies face pertain to the establishment of a commercial presence in the consumers' country in the form of direct investment (Mode 3) or to the temporary movement of providers and consumers across borders (Modes 2 and 4). As the world's largest exporter of services, the United States has an interest in opening international markets and has been at the forefront of efforts to liberalize trade in services. The United States has a long history in tackling trade barriers in services in multiple forums, most recently in the proposed Trans-Pacific Partnership (TPP). The Trade Promotion Authority (TPA) legislation that Congress renewed and was signed into law on June 29, 2015 ( P.L. 114-26 ), contains specific provisions establishing U.S. trade negotiating objectives on services trade. The text broadly states that "[t]he principal negotiating objective of the United States regarding trade in services is to expand competitive market opportunities for the United States." Congress also specifically pointed to the utilization of global value chains and supported pursuing the objectives of reducing or eliminating trade barriers through "all means, including through a plurilateral agreement" with partners able to meet high standards. If the parties reach agreement on TiSA while TPA is in effect, and if the Administration meets certain statutory requirements and timelines, TPA allows Congress to consider the required implementing bill under expedited ("fast track") procedures. The 1995 multilateral GATS is the first and only multilateral framework of principles and rules for government policies and regulations affecting trade in services among the current 162 WTO members. The GATS also contains annexes for specific sectors: movement of natural persons, financial services, telecommunications, and air transport services. In the GATS, market access obligations and national treatment commitments are made on a positive, or opt-in, basis subject to a member's specific reservations. That is, each member identifies only those sectors and the modes covered by their liberalization commitments. As members can tailor the sectoral coverage to fit their national policy objectives, certain limitations, such as the number of suppliers, may be imposed. The GATS provides the foundation or floor on which rules in other agreements on services are based, including in U.S. free trade agreements (FTAs). Trade in services has been included in subsequent U.S. bilateral and regional FTAs, including in the TPP. These agreements have built on the GATS, and on each other, to further liberalize trade in services. Services and services trade have evolved significantly since GATS went into effect in 1995. Technology innovation such as the Internet has allowed for a greater volume and range of services to be traded and also has led to new barriers to trade in services. Efforts to expand the GATS have been ongoing as part of the WTO Doha Development Agenda (Doha Round) that was launched in December 2001. The Doha negotiations are stalled, and the 10 th Ministerial Conference of the World Trade Organization (WTO), held in Nairobi, Kenya, concluded in December 2015 with no clear path forward on the Doha Round. The Nairobi Declaration underscored the importance of a multilateral rules-based trading system with complementary regional and plurilateral agreements. Largely because of the lack of progress in the WTO Doha Round, a group of 23 WTO members are engaged in discussions on a potential sector-specific, plurilateral agreement to liberalize trade in services. Contrary to the WTO MFN principle, a plurilateral agreement applies only to those countries that have signed it. The WTO has allowed exceptions to MFN in plurilateral agreements, such as the WTO Government Procurement Agreement (GPA) and WTO Information Technology Agreement (ITA). Negotiations on a Trade in Services Agreement (TiSA) were launched in April 2013, initially led by Australia and the United States. The 23 TiSA participants account for about 70% of world trade in services (see Figure 1 ). The group has been referred to as a "coalition of the willing," as each participant sees a national interest in further liberalizing trade in services.