Technical Memorandum for Project 0871 "Measuring the Impact of Trade on the U.S. Economy"

An increasingly important issue is the size and scope of trade in services. Official statistics report that services account for roughly one-third of U.S. exports in gross terms and recent papers constructing value-added trade statistics suggest that services account for more than half of U.S. exports on a value-added basis. A difficulty with measuring the services sector in general and trade in the services sector in particular is that service activities and delivery technologies are evolving rapidly. It remains an open question as to whether the U.S. statistical system broadly and the Census Bureau in particular are doing an effective job measuring trade in services. For example, the Census Bureau does collect export information from some service sectors, but not all. Project 0871 “Measuring the Impact of Trade on the U.S. Economy†developed methodology to produce estimates of trade costs for nearly every 6-digit NAICS code in scope for the Economic Census. The paper is currently in the peer review process, so the estimates are not considered final. This memorandum will use the current estimates for purposes of discussion, on the assumption that the current estimates will be close to the final estimates.