Measuring GATS Mode 4 Trade Flows

The paper discusses the research work which has taken place over recent years with respect to the measurement of GATS mode 4 – presence of natural persons, in the context of the revision of the Manual on Statistics of International Trade in Services. 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.