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U.S. Services Providers Remain Competitive in the Global Services Market, ITC Says

Tuesday, May 19, 2015
Sandler, Travis & Rosenberg Trade Report

The International Trade Commission’s annual report on trends in U.S. services trade finds that the U.S. is the world's largest services market and was the world’s leading exporter and importer of services in 2013. This report presents a qualitative and quantitative overview of U.S. trade in services and highlights some of the service sectors and geographic markets that contribute substantially to recent services trade performance. This year’s report focuses on distribution services and includes chapters on logistics, maritime and retail services. Each chapter analyzes global market conditions in the industry, examines recent trade performance and summarizes the industry’s outlook.

Highlights of this year’s report include the following.

- In 2013, the value of U.S. commercial services exports was $662.0 billion (14 percent of the global total) while imports totaled $431.5 billion (10 percent of the global total). Preliminary data for 2014 indicate that U.S. commercial services exports were up 3.4 percent and that imports were up 4.1 percent.

- From 2012 to 2013, U.S. cross-border services exports rose 5.1 percent (up from 5 percent in 2012) while imports grew 3 percent (down from 4.5 percent). Distribution services accounted for 7 percent of exports and 14 percent of imports, resulting in a trade deficit of $13.6 billion in this subsector in 2013.

- Within the services sector, sales by foreign affiliates of U.S. firms – the leading channel by which many U.S. services are delivered to foreign markets – rose 3.7 percent to almost $1.3 trillion in 2012. In 2012, top markets for sales by U.S.-owned affiliates were the United Kingdom (15 percent), Canada (10 percent), and Japan and Ireland (6 percent each). Distribution services accounted for 31 percent of the total.

- Since trade in distribution services is driven by consumer demand, fluctuations in income and consumer spending can have profound effects on the health of the industry. Further, as global economies become more integrated, the distribution services industry has needed to evolve rapidly to address issues such as shifting global supply chains, advances in digital technology and rising cost competition across all factors of production and distribution. Most notably, technology has increasingly enabled manufacturers to bypass traditional wholesalers and retailers. Consequently, distribution services suppliers have grown more adaptive as supply chains compress and the use of Internet technologies to purchase goods increases.

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