June 02, 2009
Trade in services
When we think of international trade, most of us think of goods or products, like cars, computers and clothing - that is, things we can see and touch. But a fast-growing part of international trade is now trade in services. Can you give us some examples?
Dr. Mike Walden, North Carolina Cooperative Extension economist in the College of Agriculture and Life Sciences at N.C. State University, responds:
"Many examples . . . if a U.S. legal firm or architectural firm or engineering firm engages with a client in Japan or a client in Europe, that would be an export, if you will, of U.S. services to those other countries. But also when foreign students come to the U.S., come to U.S. universities, that's an export, if you will, of U.S. educational services, as is when foreign tourists come to our Outer Banks or mountains or Pinehurst. That's an export of tourist services. And then a final example, the U.S. is the world leader in entertainment - movies and TV shows. When those movies and TV shows are broadcast in foreign countries, we can consider that an export of entertainment services. So I think it is a mistake to forget that we have obviously a thriving service economy, and many of those services we indirectly or directly export to other countries. And, indeed, if you look at the U.S. trade balances on services - that is, imports of services and exports of services - the U.S. runs a surplus, unlike in the goods market."
Posted by Dave at June 2, 2009 08:15 AM