Trade and jobs in Europe: The role of mode 5 service exports

Abstract

Over the past two decades, EU employment supported by extra-EU exports of goods and services has increased markedly, with a shift towards jobs supported by services exported as part of manufactured goods. The authors seek further insight into this trend through the full decomposition of trade flows using a multi-regional input–output model and the World Input–Output Database for 40 countries and 35 industries over the period 1995–2011. Their findings call for reflection by policy-makers regarding the four traditional modes of service supply under the General Agreement on Trade in Services with a view to adequately capturing this new reality in global trade.