Transatlantic ties beyond goods trade: Significance and policy implications of EU-U.S. services trade

Trade in services is an important component of international trade and is becoming increasingly more important with growth rates exceeding the rates with which goods trade increases. This is also true in the bilateral U.S. - EU relationship: Trade in services, and especially trade in digitally deliverable services, is a highly important element of the economic relations between the U.S. and the EU. And it is growing much faster than goods trade between the two economies. Despite its importance, trade in services has received much less attention in political and public discussions on the transatlantic trade relationship - even beyond the current narrow focus on the U.S. goods trade deficit. Against this background this policy brief attempts to explore major developing trends over time in EU-U.S. services trade in general and EU-U.S. trade in digitally deliverable services in particular. In addition to services trade, we analyze the development of services supplied by affiliates of U.S. multinationals in the EU and of those supplied by EU affiliates in the U.S. We provide policy suggestions based on data-driven insights derived from the analysis.