June 30, 2008
News Release 08-063
Inv. No. 332-345
Contact: Peg O'Laughlin, 202-205-1819

U.S. service firms were preeminent in global services trade in 2006, reports the U.S. International Trade Commission (ITC) in its report Recent Trends in U.S. Services Trade, 2008 Annual Report.

The United States remains the world's largest services market and also the world's leading exporter and importer of services, according to the report.

The ITC, an independent, nonpartisan, factfinding federal agency, compiles the report annually. The report presents a statistical overview of U.S. trade in services and highlights the service sectors and geographic markets that contributed substantially to recent services trade performance.

This year's report focuses primarily on infrastructure services that significantly affect an entire economy. Separate chapters on specific service sectors (banking, insurance, telecommunications, logistics, and retailing) analyze issues affecting global competitive conditions in the industry, examine recent trade performance, and summarize activities intended to remove sectoral trade impediments.

The 2008 report covers trade in services from 2001 to 2006. Highlights of the report follow.

• The United States continues to have the largest services trade surplus of any country in the world. Infrastructure services were major contributors to the growing U.S. services surplus, as evidenced by a surge in exports of telecommunications, banking, and insurance services. The U.S. services surplus grew to $96.6 billion in 2006, its highest level ever reported.
• Sales of services by U.S. parent firms' affiliates abroad are no less dynamic. Such sales reflect the importance to many U.S. service sectors, including infrastructure services, of expanding a commercial presence abroad. In 2005 (the latest year with available data), sales of services by foreign affiliates of U.S. firms grew at approximately twice the average annual rate as in years 2001-04. In comparison, domestic sales of services by foreign firms' affiliates in the United States continued to grow slowly from 2001 through 2005.
• Global markets have emerged in many service industries, led by multinational rather than national enterprises. Significant cross-border merger and acquisition activity in insurance, banking, logistic, and retail services illustrates the importance of suppliers' proximity to consumers abroad. Technological advancements, such as mobile services in telecommunications, tracking in logistics, and supply chain management and customer databases in retailing, demonstrate the progress made by multinational firms in enhancing speed, efficiency, and reliability while managing operational costs throughout widened affiliate networks.
• Unilateral efforts to liberalize impediments to services trade and less direct government intervention in regulating infrastructure services continue to have a favorable impact on the expansion of infrastructure services trade. During the period covered by the report, the United States continued to negotiate free trade agreements with certain trading partners to reduce market access and national treatment impediments for U.S. companies seeking to expand services exports and/or increase their commercial presence abroad.
• International agencies and national statistical offices are working to develop more detailed and internationally comparable data on services trade, largely in response to demand from trade negotiators and trade policy makers. Revisions to classifications and definitions and new regulations in the European Union should help many countries provide more detailed reporting of particular services industries and of services trade with particular trading partners.

Recent Trends in U.S. Services Trade, 2008 Annual Report (Investigation No. 332-345, USITC publication 4015, June 2008) is available on the ITC's Internet site at /publications/332/pub4015.pdf. A CD-ROM of the report may be requested by e-mailing pubrequest@usitc.gov, calling 202-205-2000, or writing the Office of the Secretary, U.S. International Trade Commission, 500 E Street SW, Washington, DC 20436. Requests may also be faxed to 202-205-2104.