Summary

The opening case explores growing global trade in services. Today, the share of services in world trade is about 20 percent, and it is expected that by 2040, trade in services will account for about one-third of all trade. The growth in global trade in services is not unexpected given that services represent the bulk of economic activity in many nations. In the United States for example, services make up about 80 precent of all economic activity. However, while numerous agreements exist on cross-border trade in products, the same does not exist for global trade in services. Going forward, it is anticipated that this will need to be addressed if countries are to capitalize on the potential for greater trade in services.

Discussion Questions

1. Discuss the notion of global trade in services. How do you feel about having your X-ray read in India or your taxes completed in the Philippines?

2. Why has it been so difficult to negotiate agreements covering cross-border trade in services when agreements exist to cover cross-border trade in products?