and value-added component, 2015

(cross-border supply), but also some elements of mode 2 (consumption abroad) and mode 4 (movement of service provider). The data thus do not account for trade under GATS mode 3 (sales by foreign affiliates). Transactions are accounted for as domestic sales since input-output tables use a locational rather than an ownership principle. So, the tables attribute sales to companies based on their geographical location, not the geographical location of the owning entity.

In this general framework, in services markets, Latin America and the Caribbean is mostly an input supplier for GVCs: backward linkages—imports of intermediate inputs used in the production of the region’s own services exports—are relatively small. Only in exports to North America and South Asia is the region’s proportion of backward linkages in services exports higher than that of forward linkages—exports of inputs used in production of other countries’ exports (figure 5.6).

Figure 5.6 Decomposition of Latin American and Caribbean services exports, by importing region and value-added component, 2015

Share of total services exports (%) 50 45 40 35 30 25 20 15 10 5 0 East Asia and Pacific Europe and Central Asia Latin America and the CaribbeanMiddle East and North AfricaNorth America South Asia Sub-Saharan Africa Backward GVC linkages Forward GVC linkages

Source: Borin and Mancini 2019. Note: The decomposition is based on data from the Eora global supply chain database’s multiregion input-output table, which records services trade based on the balance of payments, capturing primarily General Agreement on Trade in Services (GATS) mode of supply 1 (cross-border supply) and some elements of mode 2 (consumption abroad) and mode 4 (movement of service provider) but not mode 3 (commercial presence of foreign affiliates). Because input-output tables use a locational rather than an ownership principle, they attribute sales to companies based on their geographical location, not the geographical location of the owning entity. “Backward global value chain (GVC) linkages” refer to imports of intermediate inputs used in the production of the Latin America and Caribbean region’s own services exports. “Forward GVC linkages” refer to Latin American and Caribbean countries’ exports of inputs used in other countries’ export production.