The United States is the world's largest services market and was the world’s leading exporter and importer of services in 2017, reports the U.S. International Trade Commission (USITC) in its new publication Recent Trends in U.S. Services Trade, 2019 Annual Report.
The USITC, an independent, nonpartisan, factfinding federal agency, compiles the report annually. Each year's report presents a qualitative and quantitative overview of U.S. trade in services and highlights some of the services sectors and geographic markets that contribute substantially to recent services trade performance.
This year’s report focuses on distribution services and includes chapters on three specific industries: logistics services, maritime transport services, and retail services. Each chapter analyzes global market conditions in the industry, examines recent trade performance, and summarizes the industry’s outlook.
The report describes trade in services via cross-border transactions through 2017 and via affiliate sales through 2016 (latest available data). Highlights include:
- In 2017, the value of U.S. commercial services exports was $778.4 billion (15 percent of global services exports), while imports totaled $520.4 billion (10 percent of global services imports). Preliminary data also indicate that in 2018, U.S. services exports increased by 3.4 percent to $805.7 billion, while imports rose by 4.3 percent to $544.3 billion. Distribution services accounted for 6 percent of U.S. cross-border services, and 12 percent of services imports.
- Within the services sector, sales by foreign affiliates of U.S. firms – the leading channel by which many U.S. services are delivered to foreign markets – totaled $1.4 trillion in 2016 while the value of services purchased from foreign-owned affiliates in the United States totaled $876.9 billion. Distribution services accounted for about 29 percent of total sales by foreign affiliates of U.S. firms and 30 percent of total purchases from foreign-owned firms located in the United States.
- The contribution of private sector distribution services to U.S. gross domestic product (GDP) was $2.7 trillion in 2017, accounting for 17 percent of U.S. private sector GDP. From 2016 to 2017 distribution services grew by 3.2 percent, faster than the 2.1 percent growth rate experienced by private sector GDP as a whole. Distribution services were also a leading contributor to U.S. private sector employment in 2017, accounting for 21.1 percent of the private sector workforce, or 25 million full-time equivalent (FTE) employees. Wholesale trade was the largest category of distribution services, accounting for 41 percent of distribution services’ contribution to U.S. private sector GDP, followed by retail trade (39 percent). From 2016 to 2017, GDP in wholesale trade grew by roughly 2 percent, while retail trade and transportation and warehousing each grew by 4 percent.
- Distribution services encompass a wide range of activities that facilitate the movement of goods through the supply chain—from producer to end consumer. Several industries in the distribution services sector have experienced consolidation through mergers and acquisitions over the past several years. The emergence of e-commerce over the last 10–15 years has also resulted in significant innovation in the delivery of distribution services. Further, a growing number of traditional retailers are developing the capability to analyze the data produced by customer’s interactions with their websites and apps, including data on browsing habits and purchasing activity.
The USITC hosted its 12th annual services roundtable on November 7, 2018. The discussion, summarized in the report, focused on how services trade is affected by tariffs, World Trade Organization commitments, other rules and agreements for trade in goods, and related crosscutting issues, and differences in the services economies of developed and emerging markets.
Recent Trends in U.S. Services Trade, 2019 Annual Report (Investigation No. 332-345, USITC publication 4975, September 2019) is available on the USITC's Internet site at https://www.usitc.gov/publications/industry_econ_analysis_332/2019/recent_trends_us_services_trade_2019_annual_report.htm.