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Realistic estimates of mode 4 trade are virtually non-existent. Based on the GATS legal definition, the paper introduces the statistical conceptualization of mode 4. While showing that balance of payments labour related flows indicators, such as worker's remittances and compensation of employees, cannot be used as substitutes, the paper discusses relevant balance of payments transactions in individual services sectors for estimating the value of this trade. Given the complexity of many services contracts (one service contract may involve the use of more than one mode to supply services to consumers), it provides simplifying assumptions that help build these measures of mode 4 trade in services. The paper recognizes that the proposed simplified statistical approach to modes of supply does not strictly adhere to GATS provisions and explains that it has been designed as a first guidance to provide relevant information for GATS while ensuring feasibility and consistency with statistical frameworks. Examples are given, showing the interest of some economies to estimate the size of mode 4 trade. The paper also presents how existing migration and tourism statistics could be used to assess the physical mode 4 movement (flows) and presence (stocks) in terms of number of persons. It introduces necessary extensions (separate identification of relevant mode 4 categories of persons, breakdowns by origin/destination, occupations, length of stay etc.) of these statistical frameworks in order to conduct a proper assessment of mode 4. 

No: ERSD-2008-05

Authors:
Joscelyn Magdeleine — WTO
Andreas Maurer — WTO

Manuscript date: October 2008

Key Words:

Mode 4, statistics, GATS, trade in services

JEL classification numbers:

C82, F13, F2

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This is a working paper, and hence it represents research in progress. This paper represents the opinions of the author, and is the product of professional research. It is not meant to represent the position or opinions of the WTO or its Members, nor the official position of any staff members. Any errors are the fault of the author. Copies of working papers can be requested from the divisional secretariat by writing to: Economic Research and Statistics Division, World Trade Organization, Rue de Lausanne 154, CH 1211 Geneva 21, Switzerland. Please request papers by number and title.

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