Historically, dominant measures of international exchange were trade in goods, or tangible products, and capital, such as investments. Recently, services have become a larger portion of developed economies and international trade. Trade in services will only increase in the future, given the diminished importance of the constraint on the growth of trade in services imposed by the need for physical proximity. The current ability to deliver services over a wire has the potential to expand to such an extent that it may have large effects on labor markets and the US balance of payments (which includes trade in goods, services, and capital). Services that can be transferred over the internet include motion pictures, financial or legal contracts, information, software, data processing, and telephone assistance. The emergence of novel types of trade associated with offshore outsourcing, the growing importance of services trade, and recent innovations in measurement techniques for services—notably banking and insurance—make this an opportune time for this important book. Besides examining new patterns of trade in services, the chapters document the growing importance of transactions involving intangible assets and services connected with their creation or use. The book focuses on three themes. First, there are a number of challenges involved in measuring trade in services and intangibles; second, the US has many comparative advantages in the trade in services when compared with trade in goods; and third, new ways of trading services and intangibles can intensify international competition for jobs, capital investment, economic growth, and tax revenue.
