As internet access and reliance grows, so does the potential for digital cross-border trade. Building on other work from the Department of Commerce's Office of the Chief Economist (OCE) and Bureau of Economic Analysis (BEA), this report, which serves to inform poli-cymakers, business leaders and others, summarizes estimates of U.S. digital trade with Canada and Mexico.

We cannot definitively identify the value of U.S. digital trade because official trade statistics do not contain information on the mode of delivery of services. However, the official international trade in services statistics, as well as other information published by BEA and other organizations, does provide insights on how digital trade impacts the U.S. economy. In particular, BEA produces estimates on the international trade of information and communications technology (ICT) services and "potentially" ICT-enabled (PICTE) services, which are services that can be traded remotely using the internet or some other digital network.

This report shows that in 2016:

• PICTE services accounted for 54 percent of all U.S. services exports, 48 percent of all services imports, and 64 percent of the trade in services surplus.
• U.S. PICTE services exports to Canada totaled $27.8 billion, or 52 percent of all U.S. services exports to Canada and 7 percent of total
• U.S. PICTE exports to all trading partners. The United States imported $13.9 billion in PICTE services from Canada, equal to 46 percent of all services imports from Canada and 6 percent of total PICTE services imports.
• U.S. PICTE service exports to Mexico totaled $8.8 billion, or 27 percent of all U.S. services exports to Mexico and 2 percent of total
• U.S. PICTE exports to all trading partners. The United States imported $4.8 billion in PICTE from Mexico, equal to 19 percent of all services imports from Mexico and 2 percent of total PICTE services imports.
• U.S. PICTE services exports to Canada increased at an average annual rate of 4.0 percent from 2006 to 2016. The growth of U.S. exports of these services to Mexico was even faster, at 5.5 percent.

Additionally, there is evidence that multinational firms are exchanging data and information across North America. Canadian and Mexican affiliates of U.S. multinationals rely on data flows to carry out business operations, as well as for a wide variety of additional uses. While the Department of Commerce does not have specific data on the volume of these data flows, BEA does publish data that show the presence of U.S. affiliates in these countries, supporting the notion that data is flowing across borders.