The report presents a statistical overview of U.S. trade in services and provides industry-specific analyses focused on trends in exports, imports, and trade balances during 1995-96, the most recent period for which annual services trade data are available. This year's report concludes with an examination of the commitments scheduled for the 20 largest foreign telecommunication markets under the WTO agreement on basic telecommunication services. This examination is the first to identify precisely the many commitments that obligate U.S. trading partners to liberalize their markets for basic telecommunication services.

The ITC, an independent, nonpartisan, factfinding federal agency, publishes this report as a companion to its separate report Shifts in U.S. Merchandise Trade, issued annually in July.

Following are highlights of the report:

• U.S. cross-border trade in services generated an $80 billion surplus in 1996, offsetting 42 percent of the U.S. merchandise trade deficit of $191 billion. In 1996, U.S. cross-border exports of services grew by 8 percent, compared to 6 percent growth for imports. These rates were slower than the corresponding average annual growth rates of 11 percent and 7 percent, respectively, recorded during 1987-95.

• Most service industries involved in cross-border trade recorded surpluses in 1996, notable exceptions being insurance, telecommunications, and freight transportation. Trade surpluses were largest in intellectual property-related services, travel and tourism, and professional services such as law and health care.

• In 1995, U.S.-owned affiliates' sales of services in foreign markets rose by 20 percent, which doubled the 10 percent average annual growth rate posted during 1989-94.

• In February 1997, the United States and 68 of its trading partners, representing over 90 percent of the $512 billion global telecommunication services market, signed a broadly favorable agreement that concluded nearly three years of extended WTO negotiations on basic telecommunication services. The commitments became operative on February 5, 1998. The largest 20 foreign signatories, together accounting for 60 percent of global telecommunication revenues, predominantly scheduled binding commitments that liberalize both trade and investment conditions on a most-favored-nation basis.

The foregoing information is from the ITC report Recent Trends in U.S. Services Trade, 1998 Annual Report (Investigation No. 332-345, USITC publication 3105, May 1998). The report will be available on the ITC Internet server at www.usitc.gov. A printed copy may be requested by calling 202-205-1809, or by writing the Office of the Secretary, U.S. International Trade Commission, 500 E Street SW, Washington, DC 20436. Requests may also be made by fax to 202-205-2104.