Trade in services: Where is the EU strong, where are there dependencies?

Compared to 2010, this represents a global increase of 6 percentage points and an increase of approximately 8 percentage points for the EU. In Germany, the share of service exports was somewhat lower at around 24 percent, which is partly due to the strength of its industrial sector. Nevertheless, even in Germany, the share of services in total exports has risen by 7 percentage points since 2010.

The relevance of trade in services is also growing because its growth dynamics remain strong—unlike in goods trade. Over the past ten years, global service exports have grown nominally by 60 percent, while goods exports have increased by less than half that amount. Particularly in the last three years since the COVID-19 pandemic, global service exports have continued to expand robustly, whereas goods exports have grown only moderately or even declined. Within the EU, service exports have nearly tripled between 2005 and 2023, while Germany’s have increased by a factor of 2.5. Service trade is expected to continue growing significantly faster than goods trade in the coming years, not least because rising protectionism and the persistent weakness of German industry—due to high energy and regulatory costs—are weighing more heavily on goods trade than on services trade.

However, research on trade in services remains limited, largely due to the historical lack of internationally comparable, disaggregated data. This study addresses that gap by using the new OECD-WTO Balanced Trade in Services (BaTIS) database for the period 2005 to 2023 to examine global and, in particular, European trade in services, identifying potential strengths as well as existing vulnerabilities.

From a global perspective, the EU is by far the largest exporter of services, accounting for around 36 percent of global exports (including intra-EU trade), and the largest importer, with nearly 35 percent. The United States follow with a global export share of only about 15 percent and an import share of around 12 percent. However, the U.S. hold a strong position in services trade by maintaining the largest surplus among major countries. Germany ranks fourth globally in service exports with a share of 5.8 percent and third in imports with 6.8 percent. Other key players in global services trade include the UK, China, and France. China’s share in services trade is significantly lower compared to its role in goods trade, and it runs a deficit in services.

A central question in this report is which service categories the EU and Germany dominate or hold strong export positions in. Key findings include:

• For nearly all six major service categories, the EU has the highest global export share. Its global relevance is particularly pronounced in telecommunications, computer and information services, where it accounts for over 48 percent—driven mainly by computer services.
• Germany’s highest global export share is in postal and courier services, reaching 28 percent in 2023—a sharp increase from 13.1 percent in 2010.
• The U.S. hold a strong position in charges for the use of intellectual property, with a global share of 36 percent.
• Contrary to its dominance in goods trade, China lags significantly in services trade. Its best performance is in transport services, with a global export share of 6.1 percent, while its share in intellectual property charges is only 1.1 percent.

For the EU, the importance of intra-EU trade in services has increased slightly in recent years but remains nearly equal to extra-EU trade. This contrasts with goods trade, where intra-EU trade is far more significant due to lower internal trade barriers.

EU and German service trade relations are particularly close with the U.S., which is by far the most important partner for both exports and imports. Unlike in goods trade, the EU runs a services trade deficit with the U.S., amounting to around $95 billion. China, by contrast, is far less relevant for Germany in services trade, and both the EU and Germany maintain a small surplus in services trade with China.

Current trade conflicts highlight the importance of understanding critical dependencies. An analysis of transatlantic dependencies shows that the EU is more reliant on service imports from the U.S. than vice versa. This particularly applies to intellectual property charges (e.g., such as trademark rights or licenses for computer software and patents), where 68 percent of EU imports came from the U.S. in 2023, and in research and development services, with a U.S. share of nearly 47 percent. This must be considered in any potential extension of trade conflicts to services, especially regarding access to U.S. tech firms.

Conversely, U.S. export dependence on the EU in these service categories is also significant. Around 50 percent of U.S. exports of intellectual property charges and 46 percent of R&D services go to the EU, underscoring the EU’s role as an indispensable market for U.S. tech companies—a role that has grown since 2019.

By contrast, both the EU and Germany are only minimally dependent on services trade with China. If any dependency exists, it is on the EU’s import side for construction services, with a share of 20.5 percent. China, however, is far more dependent on the EU for services imports, particularly in computer services (43 percent EU share) and intellectual property charges (nearly 32 percent EU share). This contrasts sharply with goods trade, where EU import dependence on China has been rising for years.

Based on this analysis, the following recommendations can be derived:

• The OECD-WTO BaTIS data does enable a global comparison of trade in services at a reasonably disaggregated level for the first time and the period covered (up to 2023) is still quite relevant. However, given the dynamic nature of trade in services, more recent data would be advantageous. In addition, the data at the 2- and 3-digit levels is not yet sufficiently disaggregated to accurately identify the strengths of individual countries as well as possible major dependencies or chokepoints in trade in services. As for goods trade, this can be easily done due to the availability of highly disaggregated data up to the 6-digit level, and in some countries up to the 10-digit level (refer to, among others, Sultan/Matthes, 2025). Therefore, internationally comparable data on global trade in services up to the most recent data available is needed at a highly disaggregated level.
• The analysis shows that intra-EU trade in services has grown relatively to extra-EU trade but remains low compared to goods trade. This reflects significant tariff and non-tariff barriers within the EU single market, equivalent to a tariff of 100–110 percent according to IMF and ECB estimates. These barriers should be systematically reduced, as recommended by Enrico Letta and Mario Draghi in their reports for the European Commission.
• Given rising protectionism in goods trade, the importance of global services trade will continue to grow. However, trade barriers in this area remain relatively high, making further liberalization essential at the multilateral level.
• The growing importance of services trade makes it a promising area for strategic cooperation. For example, the EU could collaborate with CPTPP member states to reduce barriers in service sectors not yet covered under WTO rules.
• The dependency analysis shows that transatlantic interconnections in services trade are close. The EU market is indispensable for the U.S., particularly in intellectual property and R&D services, while the EU is highly dependent on U.S. imports in areas such as software or use of patents. These mutual vulnerabilities underscore that any escalation of trade conflicts into the services trade sector would entail significant losses for both sides. In the best-case scenario, it therefore, doesn’t come to that.
• In the event of continued aggression on the part of the US in the trade dispute, it is necessary to activate the EU's anti-coercion instruments in order to put pressure on the US. This would also make it possible to restrict trade in services, for example through an EU-wide digital service tax. In principle, this seems sensible, as U.S. tech companies in particular benefit significantly from the European market. However, the concrete usefulness depends on the exact design of the digital service tax, for example its taxable nexus, in order to keep potential damage to the EU as small as possible (Sultan/Förster, 2025). Targeting online advertising or the sale of user data would generally not harm end users in the EU in the case of free services. However, intermediaries that place advertising or purchase user data would be affected—although for these goods, many alternative providers exist.
  
  Moreover, the market power of the respective U.S. tech companies in their segments must be taken into account, which depends heavily on network effects and also on the availability of alternative providers. The frequently high market concentration of U.S. providers in digital services at least justifies considering targeted incentives to foster the development of European alternatives, as well as encouraging users to switch where this is possible without significant losses in utility.