14/02/2023 - Governments enacted substantial services trade liberalisation in 2022, underpinned by actions to improve business operations in domestic markets, advance regulatory transparency and ease remaining hurdles on business travel after the COVID-19 pandemic.

 

The global regulatory environment for services trade was dynamic with an increase in the volume of regulatory changes compared to 2021, reflecting countries’ continued efforts to address various global economic challenges.

 

Positive developments were counter-balanced, however, by a range of new services trade barriers, including on foreign companies’ ability to provide services locally, limitations on the movement of people and increased control on foreign investments, according to new analysis from the OECD.

 

OECD Services Trade Restrictiveness Index: Policy trends up to 2023  shows an increase in the adoption of new barriers to services trade across the 22 major sectors covered. The average increase in new services trade measures was five times higher in 2022 than the year before, with all sectors except telecommunications services showing an increase.

 

The annual report, which covers services trade regulations in 50 countries, representing more than 80% of global services trade, shows that Japan, the United Kingdom and the Netherlands displayed the lowest regulatory barriers to services trade in 2022. Economies with the highest services trade liberalisation in 2022 were Viet Nam, Japan and Kazakhstan.

 

Distribution services, sound recording, and architecture services were the most liberal service sectors in 2022, while air transport services, legal services, and accounting and auditing services were the most restrictive sectors, on average, across countries studied.

 

"Continued efforts to remove barriers to trade in services are essential to facilitate a strong and sustained economic recovery to strengthen resilience to future shocks and promote a more sustainable trading system,” OECD Secretary-General Mathias Cormann said. “To ensure that the benefits of open markets and a rules-based international trading system are preserved, policy makers should focus on minimising barriers that increase trade costs for services providers, weaken the gains from digital transformation and undermine competitiveness.”

 

The report shows that the average level of restriction in non-OECD countries across the 22 sectors is 1.5 times higher than in OECD countries in 2022, indicating continued regulatory fragmentation and uneven conditions for services market access.

 

Insights from the STRI demonstrate that ambitious efforts to ease barriers to trade in services could substantially reduce trade costs for firms that provide services across borders. In a hypothetical scenario where countries reduce their STRI index by half compared to the best performer in each sector, benefits accrue across all countries, with reduced trading costs most prominent in emerging market economies.

 

For further information on OECD work on the services trade, see: https://www.oecd.org/trade/topics/services-trade/

 

Direct media queries to John Drummond, Head of the Trade in Services Division of the OECD Trade and Agriculture Directorate (+33 1 45 24 95 36), or Lawrence Speer in the OECD Media Office (+33 1 45 24 79 70).

 

Working with over 100 countries, the OECD is a global policy forum that promotes policies to preserve individual liberty and improve the economic and social well-being of people around the world.