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Data services are among the most dynamic components of international trade and foreign direct investment. Technical progress, changes in the economic sector, factors influencing the international specialization in data services, and the impact of obstacles combine to determine the growth of trade and foreign direct investment in data services. UNCTC assumed the responsibility for preparing the sectoral paper on trade and foreign direct investment in data services (transborder data flows). The scope of the paper was to include an examination of the importance and impact of the emerging data-service industries, especially in Latin America; a clarification of conceptual issues related to trade and foreign direct investment in data services; a documentation of the dimensions of various forms of international transactions in services; an analysis of the determinants of these transactions; a review of the policies and issues relating to them; and an outline of possible actions at the national, regional, and international levels for dealing with questions related to data services. The present study contains the results of the work on these issues. Special attention is given throughout this book to developing countries in general and Latin American countries in particular.