World economy faces growing services-trade barriers

The world economy’s recovery from the consequences of the Covid pandemic and the war in Ukraine is increasingly hampered by governments slapping more restrictions on services trade. 

According to an OECD index, the average increase in new measures across all sectors was five times higher in 2022 than in 2021. Audiovisual, computer and physical infrastructure services were particularly affected. 

“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. 

Efforts to improve liberalisation – including the easing of business travel after Covid – were counterbalanced last year by fresh barriers, such as limits on companies moving people and providing local services, and increased control and screening of foreign investments.

In its report, the OECD cited joint research with the World Trade Organization showing that if countries implemented commitments on services regulations, importers and exporters would see cost savings of around US$150 billion annually. 

“Leveraging promising avenues for lowering business costs will be a key factor in the near term as global economic uncertainty continues and higher costs related to inflationary pressures are passed on through the prices of goods and services,” the OECD said. BLOOMBERG

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