Services trade barriers impede economic recovery

A joint study by OECD and World Trade Organization (WTO) highlighted that if countries had implemented their commitments on services regulations, importers and exporters would have benefitted from cost savings of around US$ 150 billion annually.

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Countries across the world have underperformed on their commitments w.r.t. services regulations, which have negatively impacted the recovery of the world economy. An OECD index has indicated that the average increase in new measures across all sectors was five times higher in 2022 as compared to 2021. Audio-visual, computer and physical infrastructure services were particularly affected.

According to a research report by Organisation for Economic Co-operation and Development (OECD), the global economic uncertainty continues and higher costs related to inflationary pressures are being passed on through the prices of goods and services. The joint study by OECD and World Trade Organization (WTO) highlighted that if countries had implemented their commitments on services regulations, importers and exporters would have benefitted from cost savings of around US$ 150 billion annually.

Post Covid-19 and the Ukraine war, some new barriers to service trade have been imposed. Measures like imposing limits on companies moving people and providing local services, and increased control and screening of foreign investments have adversely affected trade liberalisation post Covid-19.

OECD Secretary-General Mathias Cormann said, “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”.