Leveraging Services for Employment, Growth and Equity: An Analysis of South Africa’s Trade in Services Data

by LEWIS, G., 2009
Research Report, Employment Growth & Development Initiative, Human Sciences Research Council

Accurate data on trade in services is necessary to inform industrial policy in the services sectors and to shape negotiating strategy at the World Trade Organization (WTO). Due to the inherent difficulty of measuring trade in services, however, there had until recently been little effort to provide a coherent conceptual framework for such trade activities. This has changed with the publication of the Manual on Statistics of International Trade in Services (2002). This manual introduces a number of refinements necessary to capture trade in services in a manner consistent with the General Agreement on Trade in Services (GATS). These include a more disaggregated standard for balance of payments reporting, namely the Extended Balance of Payments Services Classification (EBOPS); a system of reporting for foreign affiliate trade in services (FATS), which is necessary to capture trade via commercial presence (mode 3); and a technical appendix dealing with the difficulties of trade in natural persons (mode 4). Lewis compares South Africa’s data reporting systems with those recommended by the WTO, and suggests what is necessary to move closer to international best practice. It gives the details of the system recommended in the manual, examines the current state of South African data reporting, and provides some policy recommendations. The greatest need to improve data reporting is in the area of FATS data, which is not currently collected. The country can only get a sense of mode 3 trade from data on foreign direct investment.