ABSTRACT
One of the distinguishing features of the General Agreement on Trade in Services (GATS), the key forum for multilateral liberalisation of services trade, is the inclusion of commercial presence as a mode of service delivery. The other modes – cross-border supply, consumption abroad and temporary movement of people – all result in trade transactions that are captured, albeit very imperfectly, in balance of payments accounts, on which the services trade structures of existing computable general equilibrium (CGE) trade models are based. Commercial presence does not. It represents a mode of delivery that would need to be added explicitly to most existing model structures. This is the first challenge in the application of CGE models to services trade liberalisation.
