CARIFORUM and UK EPA Study

Consequently, the assessment of the UK’s commercial and total trade in services by mode of supply during the period 2015 to 2020, which revealed the UK’s persistent balance of trade surplus on both metrics, and the near doubling of its services exports relative to imports, confirms that the UK is both a major and also highly competitive exporter of services, particularly over the recent decade. At the same time, the UK is mainly reliant on the commercial establishment of foreign affiliates overseas to export its services internationally, recording increased exports via this medium over the period 2017 to 2019. However, services supplied via electronic commerce/digital trade, while being the only mode recording a decline over the same period, is not to be ignored given the rising demand for e-commerce and the increased “platformization” of businesses during the on-going COVID19 pandemic. On the import side, the 2017 data confirms that the UK relies more on Mode 3 than any other mode, followed by Mode 1. However, due to a data gap for 2019, an assessment of Mode 3’s continued importance in UK imports is not possible, though it is safe to say that Mode 1 remained one of the most viable avenues by which to export of services to the UK over the period. Finally, while the low consumption of services via Mode 2 may be explained away by demand frictions, such as the cost of travel relative to the value of the service, the corresponding low take up of both exports and imports via Mode 4, however, suggests the possibility of deeper underlying factors that may be inhibiting the movement of persons, such as various technical and procedural trade barriers.

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