THE SOARING TRADE IN NONTRADABLES

In recent years international trade has flourished in a category heret ofore considered largely nontradable. Services are being exchanged acr oss national boundaries in unprecedented volumes, with growth rates ex ceeding those for trade in merchandise. In addition to cross-border tr ade, foreign direct investment and sales by foreign affiliates are als o growing rapidly. The phenomenon has attracted growing attention both from impartial analysts and from government officials seeking to expa nd their countries' exports. This article examines the nature of this trade and considers which countries compete most effectively Among the various types of services traded, the most dynamic growth has occurre d in private sector activities such as advertising, accounting and fin ance, legal services, and computer and data processing services. Obsta cles to the trade, such as government barriers, are explored, and the efforts of the Uruguay Round of trade negotiations to reduce them are evaluated.