Services Exports and the States: Measuring the Potential

States within the United States have long promoted goods exports to help their businesses and improve their economies. In contrast, promotion of services exports remains relatively unexplored, although the value of promoting services exports is potentially large. In 1995, services trade entered international discipline with the General Agreement on Trade in Services. In 2004, services trade made up more than one fifth of all U.S. trade. The United States routinely has a surplus in services trade. One barrier to state promotion of services exports has been the difficulty of measuring state services exports. This article discusses the potential of services trade for the states, reviews efforts to measure subnational services exports, and introduces a new method to estimate state-level services exports. This method can help state development officials better understand statewide economic trends, design programs, and approach federal policy makers about gaining advantages from future trade liberalization efforts.