The Rise Of Global Trade In Services

Our mental images of "global trade" are usually about goods: cars and steel, computers and textiles, oil and home appliances, and so on. But in the next few decades, most of the action in terms of increasing global trade is likely to be in services, not goods. More and more of the effects of trade on jobs is going to involve services, too. However, most of us are not used to thinking about countries import and export across national borders transportation services, financial services, tourism, construction, health care, and education services, or many others.  The 2019 World Trade Report from the World Trade Organization focuses on the theme, "The future of services trade."  Here are some tidbits from the report (citations and references to figures omitted):

Services now seem to be transforming international trade in similar ways. Although they still only account for one fifth of cross-border trade, they are the fastest growing sector. While the value of goods exports has increased at a modest 1 per cent annually since 2011, the value of commercial services exports has expanded at three times that rate, 3 per cent. The services share of world trade has grown from just 9 per cent in 1970 to over 20 per cent today – and this report forecasts that services could account for up to one-third of world trade by 2040. This would represent a 50 per cent increase in the share of services in global trade in just two decades.
There is a common perception that globalization is slowing down. But if the growing wave of services trade is factored in – and not just the modest increases in merchandise trade – then globalization may be poised to speed up again.

Of course, high-income countries around the world already have most of their GDP in the form of services. But it's not as widely recognized that emerging market economies already have a majority of their output in services, too, or very close.

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