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The growing role of services inputs in manufacturing exports ('services in boxes') has led to a proposal for a new modality of exporting services (mode 5 services) beyond the four modes of supply in the General Agreement on Trade in Services (GATS). For the vast majority of WTO members the significance of mode 5 services is considerable, both in exports and imports. However unlike traditional GATS services trade, mode 5 services 'in boxes' pay tariffs. This article estimates that the global GDP gains from liberalizing mode 5 services at multilateral level could reach up to EUR 300 billion by 2025 and world trade could increase by over EUR 500 billion. The article also examines the interplay between mode 5 services trade and the growing importance of future technological developments (e.g. software, digitalization, the Internet of Things). Our preliminary set of results shows that a Mode 5 Services Initiative is important not only because of the positive impact it would have on global trade flows but also because it would facilitate trade-led technological progress in all regions of the world. [ABSTRACT FROM AUTHOR]

This article draws the attention to the growing importance of services inputs in manufacturing sectors' exports in the EU and beyond. The GATS existing four modes of supply do not adequately cover this type of indirect services value-added trade. Hence, theoretically, the case for a new indirect mode of services supply -- 'mode 5' -- is made. On the basis of the TiVA database, our estimates of mode 5 services exports point to a substantial share of total merchandise trade. The article also finds that from a 'mode 5' perspective, services embodied into products are also subject to fairly complex trade rules. One such example illustrated in this article is the area of customs valuation. Other issues (trade facilitation, rules of origin) could have an impact on the way 'mode 5' services are traded. The renewed impetus at the WTO on trade facilitation and the post-Bali agenda should provide a new opportunity for policy makers to forge trade rules that are well-suited for the ways in which goods and services interact along global supply chains. [ABSTRACT FROM AUTHOR]