Chapter 6: Trade in Services

Question 1

Global trade in services: Types of Services offered globally (there are more)

Answer 1

§ Financial
			§ Shipping and distribution
			§ Professional and technical
			§ Other business services (software help, telecommunications, legal, advertising)
			§ Retail trade
			§ Healthcare
			§ Travel, recreation and entertainment
                ---Education

Question 2

Modes of Delivery: Four ways Services Are Traded

Answer 2

Mode 1 : Cross border
Mode 2: Consumption Abroad
Mode 3 : Commercial presence
Mode 4: Movement of natural persons

Question 3

Mode 1 : Cross border

Answer 3

Takes place when the service itself crosses the border form one country to another without the movement of persons . Service is transported via electronic or transportation services. ( ex. Management consulting, information and communication, education )

Question 4

Mode 2: Consumption Abroad

Answer 4

Consumption abroad related to services used by national of one country in another country where the service is supplies. This requires the consumer to travel across the border to another county to use the services. (ex. Tourism and travel related services, legal services, education and training, health reasons )

Question 5

Mode 3 : Commercial presence

Answer 5

Consumption abroad related to services used by national of one country in another country where the service is supplies. This requires the consumer to travel across the border to another county to use the services. (ex. Tourism and travel related services, legal services, education and training, health reasons )

Question 6

Mode 4: Movement of natural persons

Answer 6

○ Movement of natural persons refers to individual travelling fro their own county to supply services in another counter
Ex. Arts and culture, education, environmental, recreational and sports

Question 7

The Role of Services in Manufacturing

Answer 7

Some goods require services to make the transaction (selling a car– dealership, customization of car)

Question 8

Goods vs. Services Trade: Different Circumstances, Different Approaches

Answer 8

• Service export is invisible and intangible.

=Sell a service is selling promise to perform –> you must sell the individual who will deliver the service.

Question 9

Skills, Knowledge and Expertise

Which skills or knowledge can improve product and increase products?

Answer 9

Design
Engineering
Training
After Sales services

Question 10

Design

Answer 10

-essential component of quality manufacturing
= Manufactures need this skill to enhance product value, whether they provide it inn house or outsource to a service company

Question 11

Engineering

Answer 11

How can this service skill be harnessed for improved margins?

Question 12

Training

Answer 12

○ Companies that professional train their staff, agents and customers need presentation, technical writing, cultural awareness and language skills
Manufactures and services need to work together in this area

Question 13

value proposition

Answer 13

The outcome or the positive experience a client will receive as a result of doing business with you is the essence of the value proposition

Question 14

Building your value proposition

Answer 14

○ Customize it to their needs
○ Demonstrate how your solution is the best options
○ Set priorities and timelines to reinforce you VP
==Deliver superior value without sacrificing your profitability

Question 15

The desired outcome

Clients recognize value if the series exporter is

Answer 15

○ Good at understanding needs
○ Conscious of the importance of the bottom line
○ Creative brings innovative solutions
==Deterred to deliver satisfaction .

Question 16

Market Research:Implications for services

Answer 16

Need to perform standard market research, as we’ll as monitor potential markets, looking for special signs, solid information and competitive intelligence.

Question 17

Business Process Outsourcing

Answer 17

• The practice of hiring outside service providers to handle selected non core business process of a firm
Lower-cost countries where greater value and quality can be obtained.

Question 18

Trade Policies an dIssues Affecting Services Trade

GATS

Answer 18

General Agreement on Trade in services (GATS) is the instrument governing hit way services are traded around the world
• Main purposes is to improve access to international markets for service providers
–Aims to costs competition, lower prices, encourage innovation, increased employment, provide greater transparency and predictability and boost technology transfer fear.
—also tries to find mutual recognition between countries on certain levels of education (doctors, architects, lawyers)