The Other Side of Trade

  • September 2, 2023

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The misunderstood giant of trade? That would be services.

By Alice E. Ancona

The past several years have been tough for pro-trade advocates. International trade has dominated the headlines like never before, but unfortunately, it has been portrayed as the bad actor, often misunderstood. That is probably the best place to begin: trade, despite getting a lot of attention, is still misunderstood. And the component of trade which is misunderstood the most is the service industry. What is a service? Simply put, if you can’t make it, mine it, or grow it, it’s a service. A services export is any service provided by a person in one country to people or companies in another country.

 

Tourism, for example. The services sector has become one of the most significant catalysts for economic growth in terms of job creation, value-added inputs, and international trade. According to the Coalition of Services Industries, services account for 80 percent of U.S. GDP and employ eight out of every 10 Americans. So it’s no small thing, which makes one wonder why it’s too often excluded in the story about trade and trade deficits. For data to help paint the picture a little better we’ll use pre-COVID data, since the pandemic disrupted travel, tourism, and education, all important components of services trade.

The U.S. is by far the largest services exporter in the world, maintaining a relatively consistent trade surplus in services since 1992. In 2019, U.S. exports of services totaled $875.8 billion, more than the entire GDP of Saudi Arabia. Just think about some of the types of services the U.S. exports: movies and other digital entertainment, software, and aircraft maintenance are some examples. Also consider global infrastructure projects that depend on U.S. expertise in engineering, architecture, and design. You cannot export a product without a service. Consider all the value-added functions/services that went into the production of an exported product

(Financial, legal, business services, real estate, etc.) as well as the services that go into sending that product to another country (transportation, logistics, etc.). The digital economy is dominated by services. So, what about trade deficits? With certain trading partners, when you factor in services, trade deficits turn into surpluses. Let’s take one example: Canada, which happens to be a top trading partner for Florida, as well as 30-plus other states. In 2019, U.S. “goods/product” exports to Canada totaled $292.8 billion.

Imports from Canada totaled $318.5 billion, creating a supposed trade deficit of $25.7 billion. Now let’s add in services. U.S. services exports to Canada were $67.3 billion and U.S. services imports from Canada were $38.2 billion, giving us a surplus of $29.1 billion. When you factor services into our trade relationship, we have a $3.4 billion trade surplus with Canada. With some other trading partners, services trade doesn’t wipe out the deficit, but it certainly makes a dent. In 2019, we had a $36 billion services trade surplus with China, an $18.9 billion services trade surplus with Japan, and a $16.7 billion services trade surplus with the UK – just to name a few.

Services trade is notoriously difficult to measure, so trade data on services is limited and definitely undercounted. It’s not hard to imagine that many people and companies have no idea the work they do is even considered a service export. International trade and the benefit it offers are not always understood. Not all trade is tangible. In a world of expanding digitalization, where innovation and the knowledge economy increasingly dominate economic activity, services trade is an invisible yet vital engine for growth.

Alice E. Ancona is COO and Senior Vice President of the World Trade Center Miami.

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Ivan Barrios - President and CEO

Ivan Barrios

President & CEO

Ivan Barrios is the President/CEO of the World Trade Center Miami. Ivan has served in this role since January 2020.

He most recently worked as Vice President for International Trade Development & TEAM Florida missions at Enterprise Florida, Inc., the state of Florida’s official economic development agency. He managed a statewide team of trade specialists that assisted Florida companies to export their products and services overseas.

Ivan has organized 28 Governor led trade missions to 22 countries from 1999–2015 for three governors. Special projects included 3,000 one-on-one business matchmaking appointments for exporters, managing two hemispheric trade shows, producing and publishing five Florida International Trade and Services Directories, coordinating the activities of the Florida International Bankers Association and creating the Florida Trade Data Center, a first of its kind information hub for Florida exporters.

Ivan holds a position on the Board of Directors of the World Trade Centers Association, where he represents the North American region. His extensive experience includes serving as a board member for the South Florida District Export Council and the Miami-Dade County International Trade Consortium. Ivan is an alumnus of the University of Miami, where he earned his degree in Business Administration.

Alice Ancona

Chief Operating Officer
Alice Ancona has held this role since January 2020.  She is charged with boosting organizational resilience and value creation of the operations, events, strategic programing, marketing and trade shows of the World Trade Center Miami (WTCM). With over two decades of experience, she brings a wealth of expertise to her position. In addition, she is charged with creating and executing international trade programs, trade missions, economic development initiatives, advocacy efforts, and innovative revenue-generating solutions as well as providing strategic long-term planning for the organization.
Before joining WTCM, Ms. Ancona led the international endeavors of the Florida Chamber of Commerce, serving as a prominent advocate for policies that enhance international trade, logistics, and investments. Her efforts centered on removing trade barriers, expanding market access, facilitating exports, negotiating trade agreements, and strengthening Florida’s trade infrastructure. Ms. Ancona played a pivotal role in connecting Florida to the global trade arena, facilitating relationships with international stakeholders, foreign agencies, elected officials, member companies, and governmental bodies at the state and federal levels.
Prior to her work at the Florida Chamber, Ms. Ancona spearheaded the governmental affairs division at the Greater Miami Chamber of Commerce. In this capacity, she directed policy agendas on a diverse range of issues, including trade, infrastructure investment, transportation, and workforce development. Her accomplishments include leading successful campaigns for the passage of crucial trade agreements, such as the Colombia FTA, DR-CAFTA, Panama FTA, Chile FTA, and KORUS. She also contributed to efforts to secure the Free Trade Areas of the Americas.
Ms. Ancona’s contributions extend beyond her professional roles.  She is a recognized thought leader and speaker at industry conferences, providing insights on global market dynamics, trade policy, and cross-border strategies. She has actively participated in various steering committees for Florida’s transportation planning initiatives and has been an active member of the Florida International Trade Partnership. Her involvement also includes serving on the Board of the Miami Dade County International Trade Consortium. Her dedication and achievements have earned her recognition, including the 2014 International Women’s Day Award from World Trade Center Miami, the 2015 Person of the Year designation by the Florida Customs Brokers & Forwarders Association, Inc., and the 2016 Women of Distinction Award from the Lauderhill Regional Chamber of Commerce.