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In 2023, the provision of services via commercial presence and online trade encountered fresh obstacles, as service providers worldwide faced a fragmented regulatory landscape, as reported in the OECD’s yearly analysis.
The count of service trade liberalisation reforms enacted in 2023 fell short of the previous year’s total. However, the overall effect of liberalisation policies slightly surpassed the introduction of new restrictions.
Efforts towards liberalisation in 2023 helped mitigate regulatory challenges in certain nations, especially in sectors related to infrastructure, such as construction, architecture, and engineering services.
Yet, these advancements were negated by the emergence of new impediments in various countries, impacting sectors including computer services, telecommunications, transport, and commercial banking due to the screening of foreign direct investments.
Additionally, stricter regulations on cross-border data flows, digital trade, and the market entry of foreign e-commerce platforms compounded the difficulties for global service providers, as noted by the OECD.
The OECD Services Trade Restrictiveness Index: Policy trends up to 2024 indicates a deceleration in the enactment of new regulations impinging on service trade from 2022 to 2023, in contrast to the changes seen from 2021 to 2022, spanning 22 major sectors.
The annual review, encompassing service trade regulations in 50 countries, which account for over 80% of the worldwide service trade, identified Japan, Spain, and the United Kingdom as having the least regulatory barriers to service trade in 2023.
Conversely, China, Korea, and Portugal were highlighted for implementing the most significant service trade liberalisation reforms in the preceding year.
In 2023, the sectors of distribution, sound recording, and motion pictures emerged as the most open, while air transport services, legal services, and accounting and auditing services continued to be the most restrictive on average among the surveyed nations.
OECD Secretary-General Mathias Cormann said, “With half of all jobs in services sectors, open and well-regulated service markets are essential to facilitate global economic growth. Yet services trade barriers remain high and progress on liberalisation is slow. More international cooperation is needed and the upcoming 13th WTO Ministerial Conference will be an opportunity to advance discussions on liberalisation of services trade policies, including on market access, and the implementation of good practices on services domestic regulations.”
By intensifying and coordinated efforts to lower trade barriers in services, significant reductions in trade costs could be achieved for companies that deliver services internationally, thereby boosting productivity in the manufacturing sector. This would yield benefits universally, with emerging market economies experiencing the most notable reductions in trading costs.
