The U.S. service sector, which accounted for 78 percent of U.S. gross domestic product in 1998 and 80 percent of the U.S. private-sector workforce in 1999, continues to exert a strong positive effect on overall U.S. trade performance, reports the U.S. International Trade Commission (ITC) in its publication Recent Trends in U.S. Services Trade, 2001 Annual Report.

The report presents a statistical overview of U.S. trade in services and provides industry-specific analyses focused on trends in exports, imports, and trade balances during 1998-99, the most recent period for which annual services trade data are available. Industry discussions include a brief examination of issues and trends influencing competitive conditions. This year's report concludes with an examination of productivity in the U.S. service sector.

The ITC, an independent, nonpartisan, factfinding federal agency, publishes this report as a companion to its separate annual report Shifts in U.S. Merchandise Trade, issued annually in July.

Following are highlights of the report:

• U.S. cross-border trade in services generated an $81 billion surplus in 1999, offsetting 23 percent of the U.S. merchandise trade deficit of $346 billion. In 1999, U.S. cross-border exports of services grew by 4 percent, slower than the average annual growth rate of 8 percent recorded during 1990-98. Imports also increased by 4 percent in 1999, slower than the average annual growth rate of 7 percent registered during 1990-98.

• Most service industries involved in cross-border trade recorded surpluses in 1999, notable exceptions being insurance, telecommunication, and maritime and air transportation services. Trade surpluses were largest in intellectual property-related services, travel and tourism, and banking and securities.

• In 1998, U.S.-owned affiliates' sales of services in foreign markets rose by 21 percent, faster than the 13 percent average annual growth rate posted during 1989-97. Insurance, computer and data processing, and public utilities services (e.g., electricity services) led among these sales.

• The service sector harbors some of the highest and lowest productivity-growth industries in the economy. During 1990-98, productivity grew most rapidly in securities, wholesale, and telecommunication services. Service industries that experienced particularly slow productivity growth include motion picture and health services.

Recent Trends in U.S. Services Trade, 2001 Annual Report (Investigation No. 332-345, USITC publication 3409, May 2001) may be obtained from the Publications section of the ITC Internet site (www.usitc.gov). A printed copy may be requested by calling 202-205-1809 or by writing the Office of the Secretary, U.S. International Trade Commission, 500 E Street SW, Washington, DC 20436. Requests may also be made by fax to 202-205-2104.

ITC general factfinding investigations, such as this one, cover matters related to tariffs or trade, and are generally conducted at the request of the U.S. Trade Representative, the Senate Committee on Finance or the House Committee on Ways and Means. The resulting reports convey the Commission's objective findings and independent analyses on the subjects investigated. The Commission makes no recommendations on policy or other matters in its general factfinding reports. Upon completion of each investigation, the ITC submits its findings and analyses to the requestor. General factfinding investigation reports are subsequently released to the public, unless they are classified by the requestor for national security reasons.