The current gloom and doom about goodstrade has obscured the quiet resilience of services trade.Services account for over one fifth of global cross-bordertrade, and for some countries such as India and the UnitedStates close to a third of all exports. New data oncross-border trade from the United States reveals that sincemid-2008, trade in goods declined drastically but trade insome services is holding up remarkably well. More aggregatedata available for other Organisation for EconomicCo-operation and Development (OECD) countries also suggeststhat services trade has suffered less from the crisis thangoods trade. Initial evidence suggests that services tradeis buoyant relative to goods trade for two reasons: demandfor a range of traded services is less cyclical, andservices trade and production are less dependent on externalfinance. If further investigation confirms that trade incertain services is inherently less affected by crises, thenthese services could play a more prominent role indeveloping countries' diversification strategies. Theapparent resilience of services trade may be jeopardized byprotectionism. Even though few explicitly trade-restrictivemeasures have so far been taken in services, the changingpolitical climate and the widening boundaries of the statein crisis countries could introduce a national bias infirms' choices regarding procurement and the locationof economic activity.
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