Institute for Social and Economic Change
Working Paper: 241
Challenges and Prospects in the Measurement of
Trade in Services
Krushna Mohan Pattanaik
Economic literature has been eloquent in acknowledging the significant contribution of service and trade in services to economic growth. However, such studies fail to provide a workable definition of services and their trade, keeping apart the measurement of the same. Such an approach, consequently, has limited the understanding of the economic dynamics of services and trade in services. This in turn has restricted the development of a database that can capture the full essence of services and trade in services. Further, with the evolution of the General Agreement on Trade in Services (GATS), the demand for statistics on mode-wise trade of GATS has further compounded the problems of statistics on services and their trade. Since liberalisation of the service sector is an important segment of modern day globalisation, maintaining statistics on GATS mode-wise trade in services will be imperative for any country. It not only facilitates an understanding of the comparative advantage of a country in a specific service trade and negotiation strategies of its partner countries, but also to set its own negotiation strategies for a multilateral trade platform. It is in this context that this paper illuminates the need for data, gaps and revisions required in the existing data in order to capture the GATS mode-wise trade in services. In addition, the paper highlights the multilateral and regional attempts to maintain statistics in line with GATS.