World trade in commercial services maintained a growing trend over the last four years.

According to estimates by the United Nations Conference on Trade and Development (UNCTAD), these flows (measured as the average of global exports and imports), grew 7% in 2024, at a year-on-year rate.

If that happens, world trade in commercial services will reach 8 trillion 467 billion dollars in 2024.

In the sixth edition of the Balance of Payments Manual, the current account is divided into several sections. These include goods, services (covering government goods and services, n.i.e.), primary income, and secondary income. Commercial services include all categories of services, with the exception of government goods and services, n.i.i.e. Commercial services are further divided into categories such as goods-related services, transportation, travel, and other commercial services.

“N.i.o.p.” is an abbreviation for ‘not otherwise specified’ (in English, ‘not included elsewhere’).

World trade in commercial services

Services trade continued to grow in the third quarter of 2024. However, it did so at a slower pace compared to annual figures. From UNCTAD’s perspective, this suggests that the positive trend in services trade may have stalled in many economies.

On the other hand, growth remained strong in the European Union and the Republic of Korea. It also remained robust in imports from Brazil and Russia, as well as in exports from China.

Despite this, China’s imports of services experienced a significant slowdown. In fact, they turned negative in the third quarter of 2024.

What follows is the trend in global commercial services trade, in billions of dollars:

• 2018: 6,154.
• 2019: 6,358.
• 2020: 5,263.
• 2021: 6,334.
• 2022: 7,307.
• 2023: 7,913.
• 2024 (projection): 8,467.

Definition

The General Agreement on Trade in Services (GATS) defines four modes of supply, depending on the location of the supplier and the consumer. 

• The first is cross-border supply (mode 1). In this case, both the supplier and the consumer remain in their respective territories of origin. The GATS also provides for other modes. 
• In mode 2, the consumer is outside his territory to consume services (consumption abroad). 
• In mode 3, service suppliers establish themselves in the consumer’s territory to offer their services. This is achieved through subsidiaries, through direct investment abroad (commercial presence). 
• Finally, in mode 4, services are provided through the presence of natural persons.