1. CARICOM TRADE IN SERVICES STATISTICS (CTIS)PROJECT June-December 2016
Regional Training Workshop
November 21 to 25, 2016 by
Lucilla Lewis, Lead Consultant

2. MSITS
MANUAL OF STATISTICS ON INTERNATIONAL TRADE IN SERVICES (MSITS) CONCEPTUAL FRAMEWORK

3. Early History of Trade in Services RESULTING IN MSITS IN 2002 AND NOW MSITS 2010
Globalisation and trend towards trade liberalisation
Uruguay Round
WTO and the General Agreement on Trade in Services (GATS) and the Agreement on Trade- related Aspects of Intellectual Property Rights (TRIPS)
GNS/W/120 list of services sectors
Development of BPM5 and now BPM6
Developments by OECD and Eurostat
Establishment of Inter-Agency Task Force on Statistics of International Trade in Services
Development of Manual on Statistics of International Trade in Services

4. THE TIS STATISTICAL FRAMEWORK
The Extended Balance of Payments on Services (EBOPS)
The FDI Flows and Stocks
The Foreign Affiliates Statistics (FATS)
The GATS Four Modes of Supply

5. APPROACH OF MSITS
Consistency with international standards related to trade in services, and extending them where necessary and feasible
Recommendation of a phased implementation approach to meet each country’s priorities while improving inter- country comparability
Importance of metadata

6. Publication of Manuals
First manual was published by 6 agencies at the end of 2002:
The EC
The IMF
The OECD
The UN
The UNCTAD
The WTO

7. Why was it necessary to Publish the Manual on SITS
A guide to statistical compilers
A useful tool for Governments and international organisations that use statistical information in connection with international negotiations on trade in services in particular with respect to the General Agreement on Trade in Services (GATS) which came into effect in January 1995
To ensure standardisation and international comparability of statistics on trade in services compiled by countries.

8. How is the Manual on Statistics of International Trade in Services (MSITS) Structured?
It builds on existing statistical systems (BOP and SNA)
extends the balance of payments services classification (EBOPS)
recommends compilation of statistics on Foreign Direct Investment (FDI) and Foreign Affiliates Statistics (FATS)
identifies modes of supply of services (GATS 4 modes of supply- Cross Border, Consumption Abroad, Commercial Presence, Movement of Natural persons)
discusses statistics on the presence of natural persons (GATS mode 4)
Recommends approaches for compiling statistics on the GATS 4 modes of supply

9. WHY THE NEED FOR SITS
To support negotiation of specific commitments and to monitor thereafter developments in the areas concerned
To aid in the evaluation of market access opportunities
Help in the preparation of decisions on negotiating priorities and strategies
Facilitate the assessment of the extent of liberalisation
Provide statistical background for settling disputes
To provide the business sector with information to identify market opportunities

10. THE CHALLENGE: INTANGIBILITY OF SERVICES
The term services covers a range of intangible products and activities that are difficult to encapsulate within a simple definition.
MSITS adopts the definition of services from SNA as follows:
“Services are the result of a production activity that changes the conditions of the consuming units, or facilitate the exchange of products or financial assets…”

11. CONVERGENCE WITH SNA In the framework of this definition SNA speaks of
transformation services
Changes in the condition of the consumer’s goods
Changes in physical conditions of persons
Changes in the mental conditions of persons and
margin services: which result when one institutional unit facilitates the change of ownership of goods, knowledge capturing products, some services or financial assets between two other institutional units e.g. wholesalers and retailers

12. Extended Balance of Payments Services (EBOPS) classification
gives detail on resident-nonresident transactions in services
almost completely consistent with
1993 SNA and BPM5 and now SNA and BPM6

13. DIRECT INVESTMENT FLOWS
Provides definition of FDIs
Recommends compilation of flows and stocks of foreign direct investment enterprises

14. FATS VARIABLES Provides definition of foreign affiliates
Recommends basic variables for compilation – sales/turnover and/or output; employment; value added; exports and imports of goods and services; and number of enterprises
Recommends other variables for compilation

15. GATS 4 Modes of Services Supply
mode 1 – cross border supply mode 2 – consumption abroad mode 3 – commercial presence or FATS mode 4 – movement of natural persons

16. Possible data sources- MSITS
for EBOPS detail: expansion of balance of payments data collection or through dedicated TIS Questionnaire
for inward FATS: existing data sources e.g. national accounts, (collaboration with Central Bank to get preliminary register of FDIs and FATs), direct survey
for outward FATS: survey of domestic parents
Inward and outward FDI flows and stocks: BOP data
Rough approximation of GATS 4 Modes of Supply:
GATS Modes 1 and 2 and part of mode 4 balance of payments transactions,
GATS Mode 3 FATS statistics

17. MSITS 2010 (Second MSITS Manual published in 2010)
Why?
Largely to remain consistent with other statistical systems - BOP and SNA
To introduce a chapter which discusses in more details and makes further recommendations on the measurement of modes of supply of services
To go beyond SNA 2008 and BPM 6 and the traditional national accounting concept of trade to consider how services are delivered internationally from a perspective related to trade and market access negotiations !!!! Importance of information by trading partner

18. MSITS 2010 and International Agreements
While the 2 main building blocks of MSITS have remained, MSITS 2010 provides a clearer description of how to use these statistics with respect to international agreements.
BPM6 continues to be the primary source of statistical guidance on international trade in services, international investment transactions and economic flows associated with the movement of workers. MSITS therefore maintains the broader categories in BPM6 but provides further details so as to identify services that feature significantly in international trade.

19. Standard Components of BPM6 and MSITS 2010 both (CPC V2 based)
Manufacturing services on physical inputs owned by others
Maintenance and repairs not included elsewhere (n.i.e.)
Transport
Travel
Construction
Insurance and pension services
“Other” Financial Services
Charges for use of intellectual property (n.i.e.)
Telecommunications, computer and information services
Other business services
Personal, cultural and recreational services
Government goods and services (n.i.e.)

20. STANDARD PRESENTATION BPM6 AND EBOPS 2010

21. Components with Greater Details
Insurance services
Charges for use of intellectual property
Other Business Services
Personal, cultural and recreational services.

22. END OF SECTION