IV:Electronic services trade

IV. Electronic services trade

Electronic delivery already plays an important economic and trade role in many services sectors. It has been crucial for the development of cross-border trade in services. Furthermore, where the supply of certain services across borders seemed unfeasible, such as in health related services, e-commerce has overturned this conception. E-commerce has led to the development of new forms of supply, such as Telehealth. Overall, the supply of services has been deeply modified by the information technology revolution. Legal advice is given by telephone, news services are transmitted by fax, payments are settled via electronic networks, not to mention that telephone, fax, etc. constitute communication services. Table 5 provides an overview of cross-border services trade which already largely takes place in electronic form. Communication services, computer and information services, and a number of financial services and insurance services, as well as other business services are frequently conducted over telecommunication networks. Cross-border trade in these sectors amounted to about US$ 370 billion in 1995. This is equivalent to 30 per cent of world services trade, or 6 per cent of total world trade, and it is much more important than trade in the digitizable media products discussed above.

The most important services sector for cross-border trade is "other business services". with world-wide trade worth over US$ 260 billion. This includes many services from accounting to engineering services, and it is unfortunate that a more detailed break-down is not available. However, services trade in communications, finance, etc. is not negligible either, at US$ 100 billion. The most important traders are France, Germany, Italy, Japan, the U.K. and the United States amongst industrial countries. China, Korea, Singapore and a number of other developing and transition economies, however, also report significant figures for this type of services trade.

We can expect rapid growth in cross-border services trade as telecommunications costs continue to decline and Internet-based trade becomes more prominent. Electronic commerce over the Internet is much more versatile than the other electronic media, as it allows interactive communication with voice, data and image transmissions and much more. Internet data transmission is also much more efficient than via conventional telephone lines, which is likely to reduce transmission costs. This will boost trade in services already conducted over telecommunication networks and it will also facilitate trade in new services and in services which were only traded in physical form before, as has been previously mentioned. Stock trading, automatic downloading of databanks, university courses, and medical diagnosis of x-rays are just examples of what is already done or will soon probably be done on the Internet.