Liberalizing trade in services like transport, insurance, and finance can lower costs and boost international trade in goods and services. This can lead to increased production fragmentation across countries, resulting in even more trade benefits. By reducing barriers to services trade, countries can enhance global trade and gain from the specialization of production processes. The more production is split across different locations and coordinated by trade services, the greater the gains from reduced service costs. Service liberalization can drive further fragmentation of production, increasing international trade and trade benefits.