The detailed services trade data is (mostly) out (always a certain amount of data has been suppressed. Exports for IP for industrial processes has been renamed as licences for the use of R&D.
But otherwise nothing much has changed. Tax still drives a lot of services trade
But otherwise nothing much has changed. Tax still drives a lot of services trade
One simple fact that I think everyone should know and understand -- Ireland (the tax center) is the leading reported export market for US exports of software, accounting for 25% of total exports ...
Software exports to China did rise in 2019 -- but they are still dwarfed by exports of software to Ireland
The U.S. does now export about $5b in financial services to China -- but that's roughly 1/7th of what the US exports to the Caymans and Bermuda
If you look at the geography of US trade with Europe in R&D services (a big category, bigger than software) it is all with small corporate tax centers, not Europe's big markets
In fact, about 2/3rds of R&D services and 1/2 of the "Licenses for the use of outcomes of research and development" go to a set of small countries known for their, umm, business friendly tax regimes.
And it almost goes without saying that the US Tax Cuts and Jobs Act has had no obvious impact on the data -- which implies that it hasn't changed the basic incentive to offshore IP and profits (so that they are taxed at the lower GILIT rate).
One thing that is obvious from the data but isn't totally reflected in popular discourse is that many U.S. services exports (R&D services, licences for the use of R&D) are the first step in global tax chains that transfer taxable profits out of the US ...
