Exploratory Estimates of U.S. International Services by Mode of Supply

This paper presents exploratory estimates of U.S. international supply of services by mode. There is interest in international services by mode partly because government trade negotiators structure agreements around these modes. The estimates are based on statistics on trade in services published by the U.S. Bureau of Economic Analysis (BEA), an estimate prepared for this paper of distribution services, and BEA’s foreign affiliate statistics covering services supplied through the channel of direct investment by affiliates of multinational enterprises. The results indicate that mode 3, commercial presence, is the predominant mode of supply for both services supplied by and services received by the United States. The value of mode 3 exceeds the value of the other three modes combined. Mode 1, cross-border supply, is next largest for both services provided and services received, followed by mode 2. Mode 4, the presence of natural persons, has the smallest value for both directions of supply. The paper also provides information on estimates by mode developed by other countries. The paper concludes by offering next steps for further BEA research.