[Excerpt] The purpose of this paper is to try to understand the implications of the apparent expansions of U.S. export and import trade in services, the growth of U.S. firms’ service production in foreign countries and foreign firms’ service production in the United States, and the effects of these developments on the employment and wages of workers in the service producing sector within the United States. It is an introduction to the problems of interpreting the aggregate data on service trade that we hope to overcome later with the use of individual firm data in the second stage of the study.