Exporting services: challenges to start, and to expand

About this publication

International trade often refers to trade in goods, but the import and export of services – such as transport, logistics, finance, communications and the use of intellectual property – are equally important for the Dutch economy. Trade in services is embedded in the everyday activities of individuals and firms. People are using services from international firms when they order food or stream TV series. Firms depend on international services as well in the production of goods and other services.

Despite the flexible nature of services, firms wishing to export or import them are facing obstacles. It is important to identify such obstacles to international services trade and to find out which firms are hampered to a relatively large extent while expanding into new or existing foreign markets. The focus of this publication is on barriers firms face while expanding services to new markets or within existing markets.

Chapter 4 discusses how to start exporting services to a new EU destination. After a description of the firms that export to new destination markets, the study then focuses on factors that hinder the start of services trade to new countries. Do firms that already trade with neighboring countries of the new export market have an advantage? And what about geographical distance and virtual proximity? Is it easier to start exporting to countries with a large digital connection with the Netherlands? And what role do the laws and regulations in other EU countries play in the probability of an export start?

Firms continue to face various obstacles even after they have overcome barriers to entry and are able to export their services abroad. Chapter 5 examines the extent to which such barriers affect the export potential of existing service providers. Do regulations abroad limit the expansion of trade in services and which restrictions have the greatest limiting effect? Can we see any differences between the various trading restrictions? Can we draw a distinction between barriers at the border and behind the border?

Both chapters have been integrally translated as they were originally published in the Internationalisation Monitor 2022 second quarter: International trade in services: Developments and barriers. This edition of the IM describes the population of service traders; disentangles different causes of the decline in traded services; looks at barriers to international trade in services; describes developments in offshoring, and quantifies indirect trade in services.