CARIFORUM and UK EPA Study

However, electronic commerce or digital trade remains an important conduit for the UK’s services exports given the global upheavals caused by the on-going COVID-19 pandemic and the radical and transformational shifts which have occurred across traditional business models. The accessibility of channels for the digital trade in services between the UK and CARIFORUM also augurs well for increasing access to technology and soft infrastructure that are needed to support industrial development, particularly as the world advances rapidly into the fourth industrial revolution. The analysis, therefore, generally confirms the UK’s comparative advantage in the supply of services via the establishment of foreign affiliates abroad (i.e., Mode 3) relative to all other modes, followed by Mode 1. Though attention must be given to underlying demand frictions as well as various technical and procedural trade barriers, which may explain the low utilization rates associated with Modes 2 and 4 services supply to the UK market, respectively. At the same time, the UK’s persistent export activities across the four modes of supply, in the majority of sectors, suggest some amount of fungibility of the supply modes, which makes it feasible for UK exporters to continuously shift their export activities between one or more Modes of supply, depending on their preferred business model, emerging market trends or external developments. However, complete fungibility of supply across all four modes was only possible for the Maintenance and Repair and Other Business services sectors, while for the majority of sectors, there were opportunities for shifting supply between Modes 1 and 3. On the other hand, the assessment of the UK’s sectoral imports by Mode of Supply , in the absence of data on Mode 3 imports, indicated that the dominant means used by foreign services providers to supply the UK was electronic commerce (Mode 1), both by value and sectoral coverage. This was followed by Mode 2 by value, though there were more opportunities for services to be supplied to the UK through the temporary entry of services providers (Mode 4) than that which existed for consumption abroad activities, making both Modes 1 and 4 the most

Page 172 of 241