John G. Murphy John G. Murphy
Senior Vice President, Head of International, U.S. Chamber of Commerce


March 09, 2017


George Orwell famously wrote that “to see what is in front of one’s nose needs a constant struggle.” This statement is certainly true for the vast and often overlooked world of trade in services. Consider:

  • Services Rule. Services dominate the U.S. economy. Broadly speaking, services provide about 80% of all American jobs (approximately 120 million of 150 million American jobs, according to data from the Bureau of Labor Statistics).
  • More Jobs, Higher Pay. Professional and business services employ 20.5 million Americans, making this sector a larger employer than manufacturing (66% larger, in fact). What’s more, these are good jobs: Wages in these fields are 18% higher on average than those in manufacturing (average hourly earnings of $31 versus $26).
  • Increasingly Tradeable. Many services can be exported, particularly those categorized broadly as professional and business services. These include fields such as audiovisual, software, architecture, accounting, engineering and project management, banking, insurance, waste management, and advertising. The Internet is making more of these services tradeable every day.
  • Competitive Advantage. The United States has become the world’s largest exporter of services. U.S. services exports reached $750 billion in 2016, and the United States has a trade surplus in services of $248 billion. What’s more, services sales by foreign affiliates of U.S. multinational corporations top $1.4 trillion.
  • Untapped Potential. Despite these big numbers, the potential for service industries to engage in international trade is almost untapped. One in four U.S. factories exports, but just one in every 20 providers of business services does so. Just 3% of U.S. services output is exported, according to the Peterson Institute for International Economics.

Clearly, a trade agenda that focuses exclusively on manufacturing and agriculture would leave money on the table. To capitalize on America’s tremendous strengths in services, the Trump Administration should jumpstart the Trade in Services Agreement (TISA) negotiations.

The TISA aims to remove barriers to trade in services among 50 countries that represent more than two-thirds of world trade in services. When the TISA negotiations began three years ago, the Chamber and other business groups advised that its chief goals should be to expand access to foreign markets and bar discrimination against U.S. companies. In addition, it should lift foreign governments’ limits on U.S. investments in their services sectors.

The TISA also represents an opportunity to craft enforceable rade rules that reflect how data has become the new currency of international commerce. That’s why the TISA must include enforceable rules to ensure that enterprises and individuals can move data across borders in a reliable and secure manner.

To illustrate the point, a recent Chamber study estimated that reducing market and regulatory barriers to cross-border information and communications technology (ICT) services could boost global GDP by an impressive $1.72 trillion. This finding confirms that international data flows have become a vital catalyst of global economic growth—and American companies and American technology are at the forefront.

The TISA is a great opportunity for the United States to go on offense. It’s a major opportunity to spur U.S. economic growth and job creation. The United States needs to be at the table, setting the rules of trade, and reaping the rewards.

About the authors

John G. Murphy

John G. Murphy

John Murphy directs the U.S. Chamber’s advocacy relating to international trade and investment policy and regularly represents the Chamber before Congress, the administration, foreign governments, and the World Trade Organization.

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