UN to Measure Digital Impact in Trade of Services

digital trade

It’s hard to make trade policy without measuring where trade is taking place.

As part of a test program in a handful of countries, the United Nations will survey how much the delivery of services takes place remotely over internet and telecommunications networks versus in person, according to a Dec. 21 release from the UN Conference on Trade and Development.

The internet and new technologies allow companies around the world to digitally deliver marketing, management consulting, insurance and financial services and other services that once could only be completed in person with high travel costs.  Current reporting methods don’t calculate how much of this trade takes place online or in more traditional manners, the release said. The governments of Cost Rica, Egypt, India and Thailand will test a new statistical survey for gathering data on their trade of services to help frame policy talks on digital trade, the release said.

When governments know the volume of internet and technology-enabled trade, they can better take advantage of it, Torbjörn Fredriksson, chief of UNCTAD's Information and Communications Technologies Analysis Section, said in a statement.

"The new data will give governments some reliable and comparable statistics to support talks on issues related to digital trade," Fredriksson said.

Digital trade has come up against international obstacles as some economies demand that companies process data and transactions on servers within their borders as a means to control privacy and cybersecurity concerns. 

Negotiations stalled in recent weeks on the Trade in Services Agreement, or TiSA, a deal among 23 economies, including Costa Rica, which focuses exclusively on the services industry. The agreement was on track to wrap up by year’s end but paused at least in part because the European Union refused to agree to certain e-commerce provisions that promote cross-border data flow and prohibit local data storage requirements.

The world’s services market is valued at $55 trillion, according to the U.S. Trade Representative. The U.S. exported between $68.4 and $385 billion in digitally-enabled services in 2014, resulting in an up to $154 billion trade surplus in this area, according to data from the U.S. Bureau of Economic Analysis.  The agency, which currently uses the same trade measuring methods as the UN, said the range of values was due to the difficulty in tracking how services are delivered.

Preliminary data from the UN test will be available by December 2017.