The Importance of Measuring the Delivery of Services via Commercial Presence of Offshore Foreign Affiliates: Some Case Studies from Australian Business Experience

Abstract

There are major difficulties associated with measurement of each of the four modes of services trade delivery as defined in the General Agreement on Trade in Services (GATS): cross-border supply, consumption abroad, commercial presence, and movement of natural persons. The consequence is that the extent of global trade in services is hugely underestimated and the services sector does not receive the trade and economic policy attention it deserves. Australia is one of the world’s most services-intensive economies. This paper highlights recent business case studies in Australia, which demonstrates the importance of intensifying official efforts to enhance collections of services export data and to measure specifically “Mode 3” (Commercial Presence) delivery of international services.