VI - ASEAN-EC Trade in Services: A Synopsis

Summary

Any endeavour to trace common patterns of bilateral trade in services between EC member countries and individual ASEAN countries cannot be but tentative. This qualification is crucial for several reasons.

First, the sample in regional terms is very narrow. The U.K., probably the most important EC trading partner for ASEAN in services, has no information available except for tourist expenditures, royalties and receipts/payments related to overseas transactions of the BBC programme contractors. However, ASEAN countries are not separately specified and hence cannot be identified as partner countries. The three EC member countries which released information represent important traders and markets within the Community but fail to offset missing information on the U.K.

Secondly, the sectoral composition of service sectors for which information could be made available, is biased towards consumer services and merchandise transport. In quantitative terms, this does not seem to be a disadvantage in the case of ASEAN countries as most of the services exported by them still focus on consumer services and transport. However, the newly emerging business services in banking, finance, non-merchandise insurance, and telecommunications could not be identified in any of the three datasets though they are runners-up at least for Singapore as an offshore banking centre (Arndt 1986).

Thirdly, the three EC member countries are similar in their resource endowment and income level relative to ASEAN economies so that trade theory based on differences in resource endowment would suggest a fairly uniform pattern of an inter-sectoral division of labour between ASEAN and the EC (Heckscher-Ohlin type of trade). Yet, this pattern could not be verified. Table 3 which provides a breakdown of deficits and surpluses of the three countries by sub-sectors, years and individual ASEAN economies, yields more divergences than overlaps.