Carsten Fink and Deunden Nikomborirak in chapter 4 in this volume bring us one step further in understanding the sometimes blurry but at the same time complex concept of services trade. Services trade currently represents around one fifth of total trade at the global level and it thus appears to be crucial for economists and policy-makers to get a better understanding of its intricacies. In this respect, their chapter provides very useful insights, in particular by emphasising the differences in the design of rules of origin for services and for manufacturing trade.

In the case of manufacturing trade, rules of origin tend to be based on a value-added criterion. Only goods that have been transformed sufficiently on the territory covered by the regional trade agreement, i.e. only goods to which sufficient value has been added within the relevant territory, are eligible for preferential treatment. The design of rules of origin for services trade differs significantly from this approach. In particular, instead of targeting the traded services and their level of transformation within the relevant territory, they tend to make reference to characteristics of services suppliers. In the case of companies, they, for instance, make reference to their incorporation under domestic law, their level of domestic employment or to domestic ownership and control, where ‘domestic’ refers to one of the members of the regional agreement. They also make reference to the level of business operations within the relevant territory.