Executive summary

The importance of services in the global economy has grown substantially in recent years, generating growth, new employment, and innovation. Since 2014, the OECD has been gathering evidence on services trade policies through the OECD Services Trade Restrictiveness Index (STRI), providing objective and comparable data annually on applied services policies across OECD countries and beyond. The STRI has been a key instrument to quantify the benefits of open services markets, identify opportunities for policy reforms, and to monitor emerging regulatory trends.

Services trade barriers are high and asymmetric. STRI data from the last decade demonstrate that global impediments to services trade persist at high levels and, in some countries, have increased over time. Geopolitical tensions, national security concerns, and initiatives to relocate production and services closer to home have fuelled the adoption of new barriers.

The share of market access barriers is substantial. Close to two-thirds of all services trade barriers identified in the STRI affect market access or national treatment of foreign services suppliers, thereby undermining meaningful progress on new market access.

Discussions on domestic regulations could be broadened. The new disciplines on services domestic regulations formally adopted at the World Trade Organisation (WTO) in early 2024 are expected to pave the way for easier and more transparent licensing. This landmark achievement is estimated to lower trade costs by up to USD 150 billion annually, but its materialisation will depend on timely and effective implementation. Data from the STRI shows that barriers related to domestic regulations go beyond licensing and transparency measures, often affecting the conditions of competition in the market.

Digitally-enabled services face impediments and growing fragmentation. On a global level, barriers to digitally-enabled services rose by 25% between 2014 and 2023, driven by increasing regulatory hurdles that affected communication infrastructures and data connectivity. Moreover, regulatory differences among countries have grown over the past decade. Stronger cooperation on improving the international rulebook on digital trade could help reverse this trend. In this regard, a successful conclusion of the Joint Initiative on E-commerce will be key, as well as a lasting solution on the moratorium on customs duties for electronic transmissions would be essential to provide certainty to suppliers of digital services.

Lowering services trade barriers is a gateway to strengthening the resilience of supply chains and fostering environmental sustainability. Services are an integral part of the digital and physical infrastructures that underpin supply chains, and lowering barriers can boost access to foreign inputs, improve interoperability, and encourage diversification of suppliers. Moreover, the potential of services trade to drive sustainable development and environmental stewardship remains largely untapped. Lowering services trade barriers in key sectors such as transportation services can contribute to the advancement of environmental sustainability objectives by incentivising businesses to implement good environmental practices, encouraging adherence to environmental standards, and promoting sustainable consumption patterns.

Revitalising services trade discussions is key to fuel global growth. The implementation of ambitious services trade reforms could bring annual trade cost savings in the range of USD 1 trillion (the equivalent of close to 1% of global GDP or around 13% of the value of global services trade in 2023), with important gains in business sectors, financial services, transport, and communications services. To achieve this, governments must work together to revitalise services trade discussions, including initiatives on progressive liberalisation through bilateral, plurilateral and multilateral services trade agreements, demonstrate leadership in developing national and international strategies, and work towards measurable targets. Involving businesses will be critical to ensure that reforms are implemented where they are needed the most. The scope of regulatory reforms presented in this report provide a unique roadmap for governments to develop ambitious strategies, and the STRI database, indices, and tools can facilitate these efforts.

╳

Disclaimers

This work is published under the responsibility of the Secretary-General of the OECD. The opinions expressed and arguments employed herein do not necessarily reflect the official views of the Member countries of the OECD.

This document, as well as any data and map included herein, are without prejudice to the status of or sovereignty over any territory, to the delimitation of international frontiers and boundaries and to the name of any territory, city or area.

The statistical data for Israel are supplied by and under the responsibility of the relevant Israeli authorities. The use of such data by the OECD is without prejudice to the status of the Golan Heights, East Jerusalem and Israeli settlements in the West Bank under the terms of international law.

Photo credits: Cover design by the OECD.

Corrigenda to OECD publications may be found on line at: www.oecd.org/about/publishing/corrigenda.htm.

The use of this work, whether digital or print, is governed by the Terms and Conditions to be found at https://www.oecd.org/termsandconditions.