Distance Isn't Quite Dead: Recent Trade Patterns and Modes of Supply in Computer and Information Services in the United States and NAFTA Partners

73 Pages Posted: 4 Nov 2008

See all articles by Jacob F. Kirkegaard

Jacob F. Kirkegaard

Peter G. Peterson Institute for International Economics

Date Written: October 31, 2008

Abstract

This paper evaluates the statistical strengths and weaknesses of available data on US computer and information services trade and estimates the scope of delivery through GATS modes 1, 3, and 4. Trade values are estimated using a new methodology that adheres, to the greatest extent possible, to the definitions of modes of supply in the 2002 Manual on Statistics of International Trade in Services. This paper finds that US trade (particularly exports) in computer and information services are overwhelmingly and increasingly delivered through mode 3. The United States is found to have experienced declining overall revealed comparative advantage (RCA) in traditional mode 1 cross-border computer and information services trade from 1986 to 2006, while having a stable, positive RCA in mode-3 trade. A new methodology for tentatively estimating US imports of computer and information services in GATS mode 4 suggests that the IT services sector dominates US mode-4 imports, and that these are several times larger than US traditional mode-1, cross-border imports of computer and information services.

Keywords: US computer and information services trade, Services trade data validity, GATS modes of supply, Revealed comparative advantage

JEL Classification: L86, F16, F21, F22

Suggested Citation

Kirkegaard, Jacob F., Distance Isn't Quite Dead: Recent Trade Patterns and Modes of Supply in Computer and Information Services in the United States and NAFTA Partners (October 31, 2008). Peterson Institute for International Economics Working Paper No. 08-10, Available at SSRN: https://ssrn.com/abstract=1294664 or http://dx.doi.org/10.2139/ssrn.1294664

Jacob F. Kirkegaard (Contact Author)

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