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 1997-98, the most recent period for which annual services trade data are available. This year's report concludes with an examination of recent efforts to renew services trade negotiations under the auspices of the World Trade Organization (WTO) and some of the U.S. objectives of these negotiations.

The ITC, an independent, nonpartisan, factfinding federal agency, publishes this report as a companion to its separate annual 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 $83 billion surplus in 1998, offsetting 33 percent of the U.S. merchandise trade deficit of $247 billion. In 1998, U.S. cross-border exports of services grew by 2 percent, slower than the average annual growth rate of 9 percent recorded during 1989-97. In comparison, imports increased by 8 percent in 1998, almost identical to the average annual rate registered during 1989-97.

• Most service industries involved in cross-border trade recorded surpluses in 1998, notable exceptions being insurance, telecommunications, and maritime and air transportation (excluding passenger fares). Trade surpluses were largest in intellectual property-related services, travel and tourism, and banking and securities.

• In 1997, U.S.-owned affiliates' sales of services in foreign markets rose by 16 percent, faster than the 13 percent average annual growth rate posted during 1988-96. Insurance and public utilities services (e.g., electricity services) led among these sales.

• In January 2000, negotiations on trade in services recommenced under the auspices of the WTO. These negotiations will build upon the General Agreement on Trade in Services (GATS), the first multilateral and legally enforceable agreement covering trade and investment in services, which entered into force in 1995. Some of the objectives of the current round of talks include improvements to the basic framework of the agreement, stronger commitments to liberal trade principals by WTO members, and broader coverage of service industries.

The foregoing information is from the ITC report Recent Trends in U.S. Services Trade, 2000 Annual Report (Investigation No. 332-345, USITC publication 3306, May 2000). The report will be posted in the Publications and Reports area of the ITC Internet site 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.

ITC general factfinding investigations, such as this one, cover matters related to tariffs or trade. The investigations are generally conducted at the request of the U.S. Trade Representative, the Senate Committee on Finance, or the House Committee on Ways and Means; the ITC may also self-initiate investigations. The resulting reports convey the Commission's objective findings and independent analyses on the subjects investigated. The Commission makes no recommendations on policy or other matters in its general factfinding reports. Upon completion of each investigation, the ITC submits its findings and analyses to the requester. General factfinding investigation reports are subsequently released to the public, unless they are classified by the requester for national security reasons.