The Top 10 Overlooked Facts About World Trade in Services

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Updated: March 2016
Services create the vast majority of U.S. jobs.

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The Top 10 Overlooked Facts About World Trade in Services

  1. 1 Top Ten Overlooked Facts About World Trade In Services OVERLOOKED WORLD TRADE IN SERVICES FACTS ABOUT
  2. 2 Top Ten Overlooked Facts About World Trade In Services Services Create the Vast Majority of U.S. Jobs Source: U.S. Bureau of Labor Statistics; Gresser, Global Works Foundation. Services employ about 98 million of America’s 121 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.
  3. 3 Top Ten Overlooked Facts About World Trade In Services 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 country’s economic output,the more prosperous that country is likely to be. Services Make the World More Prosperous
  4. 4 Top Ten Overlooked Facts About World Trade In Services Jobs in Services Pay Well Source: Jensen, Peterson Institute for International Economics. Approximately 18 million Americans are employed in business services such as software, architectural services,engineering and project management services, and insurance—all of which generate billions of dollars in exports.Their wages are 20% higher on average than those in manufacturing,which employs about 12 millionAmericans.
  5. 5 Top Ten Overlooked Facts About World Trade In Services America Leads World Trade in Services Source: Office of the U.S. Trade Representative. The United States is by far the world’s largest exporter of services. U.S. services exports reached $716 billion in 2015, and the U.S. services trade surplus reached $227 billion. In addition, services sales by foreign affiliates of U.S. multinational corporations top $1.4 trillion annually.
  6. 6 Top Ten Overlooked Facts About World Trade In Services Services generate about half of U.S. exports—measured on a value-added basis—in large part because services contribute significant value to the production of factories and farms. The same is true of other developed economies. Source: WTO and OECD, “Measuring Trade in Value Added.” Services Provide the Lion’s Share of World Trade
  7. 7 Top Ten Overlooked Facts About World Trade In Services The Growth Potential for Services Exports Is Huge Source: Jensen, Peterson Institute for International Economics. 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.
  8. 8 Top Ten Overlooked Facts About World Trade In Services The Trade in Services Agreement Promises Big Benefits Source: Office of the U.S. Trade Representative. The United States is now pursuing a high-standard trade agreement in services dubbed the Trade in Services Agreement (TISA). 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.
  9. 9 Top Ten Overlooked Facts About World Trade In Services Eliminating barriers to trade in services could boost U.S. services exports by as much as $860 billion—up from 2015’s record $716 billion—to as much as $1.5 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. Source: Jensen, Peterson Institute for International Economics. Eliminating ServicesTrade Barriers Could Create Millions of Jobs
  10. 10 Top Ten Overlooked Facts About World Trade In Services Exports of Services Can Take Several Paths Source: WTO. 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 four“modes” are important for companies doing business in today’s global economy.
  11. 11 Top Ten Overlooked Facts About World Trade In Services 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 $1.4 trillion worth of services to foreign customers in 2013—a sum equivalent to 8% of U.S.GDP. Source: U.S. Bureau of Economic Analysis; Gresser, Global Works Foundation. Investment Abroad Is a Key Part of U.S. Services Exports
  12. 12 Top Ten Overlooked Facts About World Trade In Services 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).
  13. 13 Top Ten Overlooked Facts About World Trade In Services *Bonus fact: 50 countries are taking part in theTISA negotiations:Australia, Canada,Chile,ChineseTaipei, Colombia,Costa Rica,the European Union (on behalf of its 28 member states),Hong Kong China,Iceland, Israel,Japan,Liechtenstein,Mauritius, Korea,Mexico,New Zealand,Norway, Pakistan,Panama,Paraguay,Peru, Switzerland,andTurkey as well as the United States.
  14. 14 Top Ten Overlooked Facts About World Trade In Services 1615 H Street, NW | Washington, DC 20062-2000 www.uschamber.com

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