The Crisis Resilience of Services Trade
The current gloom and doom about goods trade has obscured the quiet resilience of services trade. Services account for over one fifth of global cross-border trade, and for some countries such as India and the United States close to a third of all e...
| Main Authors: | , |
|---|---|
| Format: | Brief |
| Language: | English |
| Published: |
World Bank, Washington, DC
2012
|
| Subjects: | |
| Online Access: | http://documents.worldbank.org/curated/en/2009/04/11362159/crisis-resilience-services-trade http://hdl.handle.net/10986/11123 |
| Summary: | The current gloom and doom about goods
trade has obscured the quiet resilience of services trade.
Services account for over one fifth of global cross-border
trade, and for some countries such as India and the United
States close to a third of all exports. New data on
cross-border trade from the United States reveals that since
mid-2008, trade in goods declined drastically but trade in
some services is holding up remarkably well. More aggregate
data available for other Organisation for Economic
Co-operation and Development (OECD) countries also suggests
that services trade has suffered less from the crisis than
goods trade. Initial evidence suggests that services trade
is buoyant relative to goods trade for two reasons: demand
for a range of traded services is less cyclical, and
services trade and production are less dependent on external
finance. If further investigation confirms that trade in
certain services is inherently less affected by crises, then
these services could play a more prominent role in
developing countries' diversification strategies. The
apparent resilience of services trade may be jeopardized by
protectionism. Even though few explicitly trade-restrictive
measures have so far been taken in services, the changing
political climate and the widening boundaries of the state
in crisis countries could introduce a national bias in
firms' choices regarding procurement and the location
of economic activity. |
|---|