Thinking in a box: A ‘mode 5’ approach to service trade

Lucian Cernat and Zornitsa Kutlina-Dimitrova

No 2014-1, DG TRADE Chief Economist Notes from Directorate General for Trade, European Commission

Abstract: This paper draws the attention to the growing importance of services inputs in manufacturing sectors’ exports in the EU and beyond. The GATS existing four modes of supply do not adequately cover this type of indirect services value-added trade. Hence, theoretically, the case for a new indirect mode of services supply - ‘mode 5’ - is made. On the basis of the TiVA database, our estimates of mode 5 services exports point to a substantial share of total merchandise trade. The paper also finds that from a ‘mode 5’ perspective, services embodied into products are also subject to fairly complex trade rules. One such example illustrated in this paper is the area of customs valuation. Other issues (trade facilitation, rules of origin) could have an impact on the way ‘mode 5’ services are traded. The renewed impetus at the WTO on trade facilitation and the post-Bali agenda should provide a new opportunity for policy makers to forge trade rules that are well-suited for the ways in which goods and services interact along global supply chains.

Keywords: International trade; trade in services; modes of supply (search for similar items in EconPapers)
JEL-codes: F13 F68 (search for similar items in EconPapers)
Pages: 18 pages
Date: 2014-03-03
New Economics Papers: this item is included in nep-int
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (19)

Downloads: (external link)
http://trade.ec.europa.eu/doclib/docs/2014/march/tradoc_152237.pdf Full text (application/pdf)
Our link check indicates that this URL is bad, the error code is: 404 Not Found (http://trade.ec.europa.eu/doclib/docs/2014/march/tradoc_152237.pdf [307 Temporary Redirect]--> https://trade.ec.europa.eu/doclib/docs/2014/march/tradoc_152237.pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:ris:dgtcen:2014_001

Access Statistics for this paper

More papers in DG TRADE Chief Economist Notes from Directorate General for Trade, European Commission Contact information at EDIRC.
Bibliographic data for series maintained by Zornitsa Kutlina-Dimitrova ().