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Service industries represent a huge potential growth market for trade transactions, but will need a rethink on the rules if that is to flourish.
The Bank of England states in its Mind the (current account) gap report, released in January, that both the UK and the US have suffered from restrictive rules in place around trade in services. It forecasts if services trade were as open as goods trade it could reduce global imbalances by up to 40%.
The level of trade in services is on the increase. Figures from the World Trade Organization (WTO) show trade in commercial services was $4.8 trillion in 2016, up from $2.9 trillion recorded in 2006. And trade in services is forecast to grow significantly, increasing to $12.4 trillion in 2030, accounting for around 25% of all trade.
Telecommunications platforms such as Netflix are seen as leading the way in the trade in services. The video-streaming company announced in January it has seen its subscriber numbers rise to more than 117 million. In the final quarter of 2017, the company saw 8.3 million new subscribers, with 6.36 million of those outside of its home market in the US.