Liberalizing global trade in Mode 5 services: How much is it worth?

Alessandro Antimiani () and Lucian Cernat
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Alessandro Antimiani: DG Trade

No 2017-4, DG TRADE Chief Economist Notes from Directorate General for Trade, European Commission

Abstract: The growing role of services inputs in manufacturing exports ("services in boxes") has led to a proposal for a new modality of exporting services (mode 5 services) beyond the four modes of supply in the GATS. For the vast majority of WTO members the significance of mode 5 services is considerable, both in exports and imports. However unlike traditional GATS services trade, mode 5 services "in boxes" pay tariffs. This paper estimates that the global GDP gains from liberalizing mode 5 services at multilateral level could reach up to €300 billion by 2025 and world trade could increase by over €500 billion. The paper also examines the interplay between mode 5 services trade and the growing importance of future technological developments (e.g. software, digitalisation, the Internet of Things). Our preliminary set of results shows that a Mode 5 Services Initiative is important not only because of the positive impact it would have on global trade flows but also because it would facilitate trade-led technological progress in all regions of the world.

Keywords: Mode 5 services; international trade; economic modelling (search for similar items in EconPapers)
JEL-codes: F13 (search for similar items in EconPapers)
Pages: 19 pages
Date: 2017-07-01
New Economics Papers: this item is included in nep-int
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Citations: View citations in EconPapers (5)

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Working Paper: Liberalizing global trade in Mode 5 services: how much is worth? (2017)
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