Abstract
In this paper, I examine the pattern of U.S. trade in producer services, emphasizing the significance of two-way trade in services. Evidence is presented that the pattern of trade in producer services can be explained by some of the same factors used to explain the pattern of trade in goods. Viewed in the context of the recent literature on increasing returns and trade in services, the results presented here suggest gains from liberalization due to increased product differentiation and global specialization. [F14, F10]
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