Since the outbreak of the Conflict between Russia and Ukraine, there has been much discussion of the impact on the supply chains of commodities such as energy and food, but little attention has been paid to the impact and analysis of trade in services. The impact of the conflict between Russia and Ukraine is not limited to trade in goods, but also in services, according to a world Trade Organisation (WTO) report released on April 12th.

In 2021, global trade in services, represented by commercial services, grew by 15% over the previous year. This led to a 33% increase in transport services, a slight recovery in travel services and a 12% increase in other services, including finance. WTO believes that the sanctions imposed by western countries on Russian enterprises and individuals will have a greater impact on commercial service trade. Russia is a net importer of services, with imports of $74 billion and exports of $55 billion in 2021. Russia is the world's 24th largest exporter of services, with a global share of 0.9 per cent, and would rank 13th if trade in services between EU countries were excluded. Russia is also the world's 19th largest service importer, with a global share of 1.4 per cent and 11th excluding intra-EU trade.

According to 2019 data, the EU is Russia's largest partner in service trade, the source of over 42 percent of its service imports and the destination of 31.1 percent of its service exports. In addition, Turkey (7.7%), the United Kingdom (5.1%), the United States (4%) and China (3.7%) were the top sources of Russian service imports. The US (6.5%), China (6.2%), Switzerland (6.1%) and the UK (4.8%) were the non-EU destinations for Russian service exports.

By sector, tourism and air transport services were the largest service trade categories in Russia before the outbreak, accounting for 46% and 36% of Russia's service imports, respectively. These sectors have been hit hard by the pandemic and have been hit hard by economic sanctions. Ireland's significant market share in Russian aircraft leasing could be significantly affected. According to 2019 figures, Russia paid $3.9 billion to EU countries for aircraft operating leases, of which $2.6 billion went to Ireland. In 2020, Russia's operating lease imports fell by 44 percent as a result of COVID-19 related travel restrictions. The seizure and seizure of Russian overseas assets by the West not only directly reduces Russia's motivation to pay relevant lease fees, but also changes the area and focus of Russian aircraft operation, which will further affect the export of relevant services to Ireland and other countries.

Intellectual property services are the third largest category of services imported into Russia, including patent royalties, research and development output, industrial processing and design, royalties and trademark royalties. In 2019, the European Union, Switzerland, the United States, the United Kingdom, South Korea and Japan together accounted for 96 percent of Russia's imports of such services, with a total import value of $6.6 billion. Escalating sanctions have made it harder for Russia to use the intellectual property of western companies. Whether from the perspective of compliance or spontaneous behavior, the willingness of enterprises to carry out service trade with Russian local enterprises may be significantly weakened, which will have a great impact on the import of Russian intellectual property service trade.

According to the data of service trade, although The proportion of Russia in global service trade is not high, the impact of russia-Ukraine conflict on global service trade cannot be ignored. Historical experience shows that with the rise of the economic aggregate of an economy or a region, the position of the service industry in the economic industry often becomes more important. The service industry has gained more development space due to its low dependence on mineral resources and less negative impact on the environment, and the extension of its development advantage to the international market is reflected in service trade. It is fair to say that the development of trade in services has been an important support force for global economic and trade development since the establishment of the WTO, especially since the beginning of the 21st century. It has also created significant value for the economy and society. Under the current international division of labor system, the levels of trade between different countries are richer, and the scope of comparative advantage is more extensive, extending from goods trade to service trade.

While Russia and Ukraine have a small share of global trade in services, the sector, including aircraft leasing, is an important market for many Western countries. Intellectual property transactions restricted by sanctions against Russia will not only change the investment cost and willingness of enterprises, but also change their investment and operation logic. Reducing foreign investment in Russia and weakening research and development in Russia will not only have an impact on the global development layout of these multinational companies, but also cause corresponding actions in Russia, and even change the habits and preferences of consumers. Compared with the manufacturing industry base and investment on which the development of trade in goods depends, the development of trade in services depends on hardware resources in a different way with the change of trade scale. In the initial stage of relatively decentralized business scale, service trade has relatively low requirements on hardware conditions and is mainly subject to the commitments of host countries such as market access of service industry. With the increase of business scale, the factor resources that need to be used intensively will increase significantly, and the original economic structure needs to be adjusted accordingly. As a result, resources will be reallocated across industries, and the constraints at this time may gradually shift to hardware infrastructure and environment. Russia's dependence on hardware resources in different sectors of trade in services is limited. If western countries withdraw, Russian companies or companies from other countries that have not imposed sanctions will fill the development space.

Trade in services is not only an important manifestation of scientific and technological progress and intellectual achievements, but also an important source of innovation and development of social and economic activities. Since the outbreak of the epidemic, trade in services has attracted more attention and achieved greater development due to its unique advantage of online interaction. Without the support of trade in services, the vitality of a country's economic development may be greatly affected. Not only will the upward space of industrial upgrading be squeezed, but it will also become more difficult to achieve development goals such as economic and social sustainability and addressing climate change.

In recent years, the impact of the service industry on the manufacturing industry continues to increase, becoming one of the key reasons for the steady development and continuous upgrading of the manufacturing industry, and the impact of the service trade on the goods trade is changing the map of international trade. For example, the changes in the price, delivery mode and stability of services, including transportation services, even determine the trade preference of enterprises and influence their choice of international trade target markets. If the service is unable to continue, the enterprise may be forced to choose to give up its original market, and lack of demand, the affected countries may be more passive in the global economic system, can lead to the development of the multilateral trade system improvement and more difficult to achieve consensus, further weakened after the outbreak of the global economic recovery.