OECD Services Trade Restrictiveness Index: Policy Trends up to 2022

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OECD Services Trade Restrictiveness Index: Policy trends up to 2022 February 2022


OECD TRADE AND AGRICULTURE DIRECTORATE This brochure is published under the responsibility of the Secretary-General of the OECD. The opinions expressed and the arguments employed herein do not necessarily reflect the official views of OECD countries. The publication of this booklet has been authorised by Marion Jansen, Director of the Trade and Agriculture Directorate. 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. Comments are welcome and should be sent to tad.contact@oecd.org.

Acknowledgements The OECD is grateful to the following persons for their assistance with the regulatory data collection for the 2021 update of the OECD Services Trade Restrictiveness Index: Spela Berlizg, Enes Karacayir, Laura Kuusela, Armine Manasyan, Thanh-Nha Quach, Gustavo Ribeiro De Macedo, Shawn Francine Alexandra Reo, Georgia Theodorakopoulou, and Veronica Zaboia.

© OECD (2022) You can copy, download or print OECD content for your own use, and you can include excerpts from OECD publications, databases and multimedia products in your own documents, presentations, blogs, websites and teaching materials, provided that suitable acknowledgment of OECD as source and copyright owner is given. All requests for commercial use and translation rights should be submitted to rights@oecd.org.


OECD Services Trade Restrictiveness Index: Policy Trends up to 2022

Main findings •

Global services trade regulations showed signs of liberalisation in 2021, slowing the steady build-up of trade barriers identified in previous years. The 2021 STRI shows that services liberalisation outpaced new restrictions during 2021, as the erection of new barriers to services trade slowed across almost all of the 22 major sectors covered.

Trade liberalisations were identified in several sectors such as air transport services or commercial banking. Easing regulations affected particularly services traded through commercial establishments (Mode 3) and through the temporary movement of services providers (Mode 4).

On average across sectors, the Czech Republic, Japan, and Chile displayed the lowest regulatory barriers to services trade in 2021. Economies with the most trade liberalisation in 2021 were the United Kingdom, Indonesia, and Viet Nam.

Supply chain resilience benefits from open markets for services trade, while lower services trade costs will facilitate recovery from the shock of the COVID-19 pandemic on exporters. Multilateral trade rules and open commitments on services can lock in these benefits and provide certainty to firms seeking to access foreign markets.

The trend towards market openness for services trade identified in the OECD’s annual monitoring exercise accompanies the landmark adoption of the WTO Reference Paper on Services Domestic Regulation at the end of 2021, demonstrating collective will to liberalise services trade. OECD analysis demonstrates that full implementation of the new WTO disciplines can unlock annual services trade cost savings in the range of USD 150 billion, with substantial benefits in financial services, business services, communications and transport services.

Ambitious efforts to ease services trade barriers could yield substantial benefits in reducing trade costs for firms that provide services across borders. On average across sectors, services trade costs could decline by 6% to 16% in the medium term if countries closed their regulatory gaps with best performers in the STRI by half.

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Monitoring services trade policy changes in 2021 Global services trade regulations showed signs of liberalisation in 2021, slowing the steady build-up of trade barriers identified in previous years. The 2021 STRI shows that services liberalisation outpaced new restrictions during 2021, as the erection of new barriers to services trade slowed across almost all of the 22 major sectors covered (Figure 1). The average cumulative increases across the sector scores was six times lower in 2021 than in 2020, indicating a reduction in the volume and depth of new trade restrictions. However, a slowdown in implementing new restrictions was complemented only by moderate policies to ease services trade barriers, and often concentrated in few sectors such as air transport or commercial banking. Despite policies to ease trade barriers, the level of restrictiveness in these sectors remains relatively high on average across countries (Figure 3).

Fewer and less harmful new trade restrictions for services in 2021 than a year before.

Figure 1. Changes in the STRIs per sector, 2020-2021 Trade liberalisations, 2020 to 2021

Trade restrictions, 2020 to 2021

Trade liberalisations, 2019 to 2020

Trade restrictions, 2019 to 2020

0.3 0.2 0.1 0

Digital network

Transport and distribution supply chain

Engineering services

Construction

Architecture services

Legal services

Insurance

Commercial banking

Accounting services

Road freight transport

Rail freight transport

Maritime transport

Logistics storage and warehouse

Logistics freight forwarding

Logistics customs brokerage

Logistics cargo-handling

Distribution services

Courier services

Air transport

Telecommunication

Sound recording

Motion pictures

Computer services

-0.2

Broadcasting

-0.1

Market bridging and Physical infrastructure supporting services services

Note: Sum of all the positive (restrictions) and negatives changes (liberalisation) across all the measures over the period considered. Source: OECD STRI database (http://oe.cd/stri-db).

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4| The most trade liberalisation was identified in measures related to the temporary movement of natural persons and easing requirements related to foreign equity (Figure 2). At the same time, several countries introduced tighter conditions on screening foreign investment in 2021, which were already on the rise in 2020. Some of the regulatory changes were implemented in response to the COVID-19 pandemic as governments implemented measures to protect public health and to mitigate its economic consequences. However, most COVID-19 policy measures have marginal bearing on the STRI database as these are largely temporary or target sectors not covered by the STRI, such as health, protective equipment or essential goods. Figure 2. Changes in economy-wide measures in 2021 Number of measures changed in the STRI database across all countries and sectors Tightening

Liberalising

Screening of foreign investments

Foreign equity

Temporary movement of natural persons is restricted by quotas 0

5

Source: OECD STRI database (http://oe.cd/stri-db).

10

15

20

25

30

35

40

45

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Most and least restrictive services sectors in 2021

Air transport services, legal services, and accounting and auditing services were the most restrictive sectors on average.

Distribution services, sound recording, and logistics freight forwarding were the most liberal services sectors in 2021.

Figure 3. STRI, minimum and maximum values by sector, 2021 Minimum

Maximum

Average

1 0.9 0.8 0.7 0.6 0.5 0.4 0.3 0.2

Distribution services

Sound recording

Logistics freight forwarding

Computer services

Motion pictures

Construction

Insurance

Logistics customs brokerage

Commercial banking

Engineering services

Road freight transport

Logistics storage and warehouse

Telecommunication

Architecture services

Logistics cargo-handling

Maritime transport

Courier services

Rail freight transport

Broadcasting

Accounting services

Legal services

0

Air transport

0.1

Note: The STRI takes values between zero and one, one being the most restrictive. The STRI database records measures on a Most Favoured Nations basis. Preferential trade agreements are not taken into account. Air transport and road freight cover only commercial establishment (with accompanying movement of people). Source: OECD STRI database (http://oe.cd/stri-db).

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6

Policy changes across modes of supply The STRI differentiates between the nature of policy changes by modes of services supply, namely cross-border trade (Mode 1), commercial establishment (Mode 3), temporary movement of natural persons (Mode 4), and changes that affect services irrespective of the mode through which they are supplied (all modes). In 2021, trade opening changes affected all modes of services supply but particularly Modes 3 and 4 (Figure 4). With respect to Mode 3, liberalising changes took place across several countries. For instance, the United Kingdom (UK) lifted the majority nationality-based ownership and control requirements for the issue of a UK Operating Licence in air transport services. In Indonesia, Presidential Regulation No. 10 of 2021 took effect in March 2021 updating the previous negative investment list that was adopted in 2016. The new regulation opened several sectors to foreign investment, including construction services. However, in some sectors, such as air transport services, the new regulation reversed previous efforts to liberalise investment. With regard to Mode 4, several countries have introduced new measures to facilitate the temporary movement of services providers. For instance, the United Kingdom updated the visa regimes applicable to contractual services providers and independent professionals under the T5 (Temporary Worker) route and eased the quantitative limits and qualification conditions for applicants under the new Skilled Worker visa route.1 In Australia, the number of documents required for business visa applications was reduced in 2021.

1

Conditions for EU services providers in the UK and UK services providers in the EU are subject to the EU-UK Trade and Cooperation Agreement and not covered in the STRI.

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|7 Figure 4. Policy changes and modes of supply, 2020-2021 Liberalising

Tightening

0.4 0.3 0.2 0.1 0 -0.1 -0.2 -0.3 -0.4 -0.5

Mode 1

Mode 3

Mode 4

Source: OECD STRI database (http://oe.cd/stri-db).

THE OECD SERVICES TRADE RESTRICTIVENESS INDEX: POLICY TRENDS UP TO 2022 © OECD 2022

All modes


8|

Overall STRI performance in 2021

The top ten economies with the best regulatory performance on average in the 2021 STRI were the Czech Republic, Japan, Chile, the Netherlands, Latvia, the UK, Germany, Lithuania, Colombia, and Spain (Figure 5). However, more than half of the economies covered (27 out of 50) have an STRI score above the OECD average.

Figure 5. Average STRI across countries, 2021 STRI

Average

0.6 0.5 0.4 0.3 0.2

0

CZE JPN CHL NLD GBR LVA DEU LTU COL ESP IRL AUS NZL DNK SVK USA CRI PRT LUX FRA KOR EST PER CAN OECD AUT SWE FIN SGP ZAF HUN POL SVN MEX CHE GRC CHN ISR ITA BEL TUR NOR BRA MYS VNM RUS KAZ ISL IND THA IDN

0.1

Note: The STRI indices take values between zero and one, one being the most restrictive. The STRI database records measures on a Most Favoured Nations basis. Air transport and road freight cover only commercial establishment (with accompanying movement of people). The indices are based on laws and regulations in force on 31 October 2021. The STRI regulatory database covers the 38 OECD countries, Brazil, the People’s Republic of China, India, Indonesia, Kazakhstan, Malaysia, Peru, Russian Federation, Singapore, South Africa, Thailand, and Viet Nam. 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. Source: OECD STRI database (http://oe.cd/stri-db).

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Leading reformers

Ambitious efforts to ease barriers could yield substantial benefits in reducing trade costs for exporting firms.

Economies with the highest STRI decrease in 2021 were the United Kingdom, Indonesia, and Viet Nam (Figure 6, Panel A). Compared to 2020, the UK’s STRI has decreased across all sectors due to a series of new regulations introduced after the transition period for the UK’s departure from the EU ended on 31 December 2020 (Box 1). In Indonesia, a new regulation on foreign investment entered into effect in March 2021 that eased market entry conditions across several sectors. In Viet Nam, a new Investment Law was introduced in 2020 which introduced a negative list approach for market access whereby the default position is market opening and sectoral exceptions are specified, and eased some of the conditions on foreign investment that have applied since 2014.

Over the period 2014-2021, where 2014 marks the first publication of the STRI, China, Kazakhstan, and Indonesia were the three leading reformers (Figure 6, Panel B). China recorded significant decreases in the STRI between 2014 and 2021 as a result of progressive liberalisation on regulations governing foreign direct investment. Kazakhstan demonstrated significant progress in liberalising its services industries over the past years, especially after its accession to the WTO in 2015. Indonesia has been implementing extensive reforms since 2014, with comprehensive and far-reaching reforms on foreign investment regulations in several services sectors in 2016 and 2021.

Cumulative decrease in STRI results across all sectors in 2021 and since 2014 A. 2021

B. 2014-2021

0

0 -0.2

-0.2

-0.4 -0.6

-0.4

-0.8 -1

-0.6

-1.2 -1.4

-0.8

-1.6 -1

GBR

IDN

VNM

-1.8

CHN

KAZ

Source: OECD STRI database (http://oe.cd/stri-db).

THE OECD SERVICES TRADE RESTRICTIVENESS INDEX: POLICY TRENDS UP TO 2022 © OECD 2022

IDN


10 |

Box 1. Changes in the United Kingdom’s services trade regulations in 2021 The UK left the European Union in January 2020 and entered into a transition phase which ended on 31 December 2020. A large number of new legislations and regulatory amendments were introduced as a result, and some of these have implications for the STRI (Figure 7). A few examples are described below.

Figure 7. Changes in the UK’s STRI from 2020 to 2021 Percentage decrease in the UK’s sectoral STRI across services sectors % 0 -10 -20 -30

Engineering services

Architecture services

Construction

Insurance

Commercial banking

Accounting services

Legal services

Customs brokerage

Freight-forwarding

Storage and warehouse

Cargo-handling

Distribution services

Courier services

Rail freight transport

Road freight transport

Maritime transport

Air transport

Sound recording

Motion pictures

Broadcasting

Telecommunication

-50

Computer services

-40

Source: OECD STRI (http://oe.cd/stri-db).

Contractual services providers and independent professionals can enter the UK on a T5 (Temporary Worker) International Agreement Worker immigration route which replaced the Tier 5 (Temporary Worker) route as of 1 December 2020. In addition, a new Skilled Worker visa route was introduced to replace the Tier 2 (General) visa route together with a new points-based system. Under this procedure, previous caps on the maximum number of Tier 2 (General) visas have been suspended and there is no longer a requirement for employers to undertake a Resident Labour Market Test. However, rules on sponsorship control continue to apply, and include the need to obtain a sponsorship license and pay an Immigration Skills Charge for the duration of the employment. As of January 2021, this charge must also be paid for EU/EEA nationals applying for a Skilled Worker visa. An updated Intra-Company Transfer route was also set up for workers who are transferred by their employer to a skilled position in the United Kingdom. In air transport services, the Operation of Air Services (Amendment, etc.) (EU Exit) Regulations 2018 implemented EU Regulation 1008/2008 into the UK domestic regulatory environment. One of the main changes include the lifting of majority nationality-based ownership and control requirements for the issue of a UK Operating Licence which entails a substantial liberalisation for investment in the sector. The Maritime Transport Access to Trade and Cabotage (Revocation) (EU Exit) Regulations 2019 revoked prior EU legislation that limited cabotage traffic only to EU vessels. Cabotage operations for foreign vessels are now permitted in certain circumstances under an "Open Coast" policy that applies to all nations.

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| 11 On 29 April 2021 a new Financial Services Act 2021 was adopted which introduces several changes to the UK’s regulatory framework. For instance, it changes some aspects of the United Kingdom’s prudential regulatory regime, and implements the Basel III standards. As of January 2021, the United Kingdom abolished the Low Value Consignment Relief, which relieved import VAT on consignments of goods valued at GBP 15. All imported goods up to GBP 135 will now be subjected to domestic VATs. The threshold for relief from customs duty continues to be GBP 135. The United Kingdom adopted a new National Security and Investment Act (NSIA) 2021 that will enter into force in 2022. The Act establishes new procedures for the screening of investments for the purposes of protecting national security. The United Kingdom stands to benefit from services reforms that enhance market access and bring sizeable gains. Recent OECD estimates suggest that closing half of the gap to best performers in terms of services trade regulations, as measured by the STRI, could lead to an average decrease in services trade costs of about 3.5% of export values in the medium term in the United Kingdom (Mourougane, Benz and Gonzales, 2021[1]).

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12 |

The benefits of open markets for services Ambitious efforts to ease barriers to trade in services could yield substantial benefits in reducing trade costs for firms that provide services across borders. On average across sectors, services trade costs could decline by 6% to 16% in the medium term if countries closed their regulatory gaps with best performers in the STRI by half (Table 1). Table 1. Trade cost effects of services liberalisation by sector Trade cost implications of policy reforms in the STRI, 2021 (% of export values) STRI Sector

Lower estimate (%)

Higher estimate (%)

Air transport

9

25

Accounting services

7

24

Insurance services

10

18

Legal services

6

20

Courier services

5

17

Architecture services

7

13

Logistics (storage)

5

13

Maritime transport

4

14

Engineering services

5

13

Telecommunications

6

12

Logistics (cargo handling)

4

12

Computer services

5

11

Rail freight transport

4

11

Logistics (freight forwarding)

4

11

Logistics (customs brokerage)

4

11

Road freight transport

4

10

Average

6

16

Commercial banking

16

32

Note: The table presents the trade cost implications of closing 50% of the gap to the best performing countries. All estimates correspond to the median among all countries. The following sectors were not covered in the estimations due to lack of data: broadcasting services, construction services, distribution services, motion pictures and sound recording services. Source: Calculations based on methodology in Benz and Jaax (2020[2])

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| 13 Figure 8. Trade cost effects of services liberalisation by country Trade cost implications of policy reforms in the STRI, 2021 (% of export values) Trade cost effect

90% confidence interval

0 -10 -20 -30

-50

THA IND RUS IDN ISL KAZ VNM CHN TUR BRA MEX ISR MYS KOR ZAF ITA POL NOR CHE SVN SGP HUN GRC BEL PER FIN USA AUT SWE EST CRI LUX PRT SVK NZL FRA CAN COL DNK AUS LTU ESP JPN IRL CHL DEU LVA GBR

-40

Note: The figure presents the trade cost implications of closing 50% of the gap to the best performing countries. The following sectors were not covered in the estimations due to lack of data: broadcasting services, construction services, distribution services, motion pictures and sound recording services. 90% confidence intervals are computed using the standard errors of the trade elasticity estimated from a gravity model. Source: Calculations based on methodology in Benz and Jaax (2020[2])

Burdensome domestic regulations that increase the costs of obtaining a license to operate or lower regulatory transparency hamper trade in services. In December 2021, 67 WTO members, representing 90% of world services trade, successfully concluded negotiations on a Reference Paper on Services Domestic Regulation aiming to slash administrative costs and create more transparent regulatory environments for services providers. Moreover, for the first time in WTO history, a provision specifying non-discrimination between women and men was included: when “adopting or maintaining measures relating to the authorization for the supply of a service, the Member shall ensure that […] such measures do not discriminate between men and women.” Over the past years, many economies have introduced broad internal regulatory reforms to streamline their regulations in services sectors and signal their commitment to good regulatory practices to any interested suppliers, foreign or domestic. The OECD STRI database records 46 of such liberalising policy changes related to the services domestic regulation disciplines between 2014 and 2021 (Figure 9). Most of these policy reforms are of horizontal nature, affecting a large number of sectors. Financial services stand out with the greatest sector-specific efforts towards more efficient services regulation.

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14 | Figure 9. Number of liberalising policy reforms related to services domestic regulation disciplines between 2014-2021 30 25 20 15 10

Courier services

Accounting

Distribution

Motion pictures

Broadcasting

Engineering

Architecture

Telecommunications

Rail transport

Commercial banking

Horizontal

0

Insurance

5

Source: OECD STRI database (http://oe.cd/stri-db).

Streamlined regulations in services sectors could reduce the time and cost required for complying with administrative barriers and regulatory red tape. These cost savings can incentivise new trade and new investment. They can also be passed on through lower prices to users of these services, including consumers and businesses. While the exact distribution of cost savings is difficult to assess, it is possible to quantify the magnitude of potential savings based on the current volume of services trade. Through the full implementation of the disciplines on services domestic regulation, economies can lower trade costs and reap substantial trade benefits: annual trade cost savings could be in the range of USD 150 billion, with substantial benefits in financial services, business services, communications and transport services (Figure 10). Figure 10. Annual trade cost savings in five broad services sectors Between JSI participants

With non-participants

USD billion 60 50 40 30 20 10 0

Transport

Insurance and pension

Finance

Communications

Business services

Note: Simple average of 48 SDR JI participants for which OECD STRI data are available. Values of some sectors are based on a smaller number of countries. Trade-weighted average of intra-EEA restrictiveness and MFN restrictiveness for EU members. Trade data from the OECD-WTO Balanced Trade in Services dataset (BaTIS). Source: OECD calculations based on Benz and Jaax (2020[2]) and report in WTO (2021[3]).

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| 15

Cross-cutting barriers to digital trade in 2021 The OECD Digital Services Trade Restrictiveness Index (Digital STRI) identifies, catalogues, and quantifies cross-cutting barriers that affect trade in digitally enabled services, and it complements other OECD tools that map the international regulatory and policy environment for digital trade. 2 In 2021, in collaboration with regional UN institutions, the OECD Digital STRI was expanded to 24 additional economies in Asia, Latin America and Africa, bringing the total number of economies covered to 74 (Annex C). This expansion permits a broader view of the global regulatory landscape, facilitates closer observation of regional variations, and enables a wider range of comparisons among economies and regional trade partners. The Digital STRI shows a stable regulatory framework for digital trade in 2021, following the trend already identified in previous years (Figure 11). Nonetheless, there are some differences across regions, both in terms of the level of trade restrictiveness as well as the trends observed in recent years. For instance, in Europe and in the Americas, the average level of restrictiveness tends to be low compared to the average in Asia or Africa. At the same time, economies in Africa have demonstrated considerable progress in lowering barriers to digital trade narrowing the gap with more developed economies. Figure 11. Evolution of the services regulatory environment for digital trade across regions Digital STRI averages, per year Europe

Americas

Africa

Asia

0.4

0.3

0.2

0.1

0

2016

2017

2018

2019

2020

2021

Source: OECD Digital STRI database (http://oe.cd/stri-db).

While the pace of adopting new barriers has generally been stable in the past years, the global regulatory environment for digital trade in 2021 continues to be complex and diverse across 2

Such as the OECD Digital Trade Inventory. For more details, see (Nemoto and López González, 2021[11])

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16 | countries (Annex C). Key challenges include reducing barriers on digital infrastructure and connectivity, which account for close to two-thirds of barriers across all countries (Figure 12). These include regulations that limit access to high quality communications services and measures that inhibit the seamless transfer of data across borders. Further reforms are needed to enable more electronic transactions and remove other barriers such as localisation requirements and limitations on online content providers. Strengthening intellectual property protection and effective enforcement measures against online infringements can further improve the regulatory environment for digital trade. While digitalisation enables easier cross-border trade, rules and regulations remain fragmented across borders. Regulatory divergences can result in additional costs for firms as activities need to be aligned across multiple regulatory frameworks. Figure 12. Trade barriers on digital infrastructure and connectivity are high Composition of the OECD Digital STRI, 2021

15% 3%

Infrastructure and connectivity

4%

Electronic transactions Payment systems

14%

64%

Intellectual property rights Other barriers

Source: OECD Digital STRI database (http://oe.cd/stri-db).

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| 17

Services trade in the European Economic Area The intra-EEA STRI database measures the extent of services trade restrictiveness within the EEA Single Market (Benz and Gonzales, 2019[4]). It shows that services trade within the EEA is substantially more liberal than the multilateral policies applied by EEA member countries towards non-members (Figure 13). However, a certain level of restrictiveness remains within the Single Market, demonstrating the potential for further market integration which at present varies widely across services sectors. When taking into account both EU rules and national laws, intra-EEA services trade barriers can also differ across countries.

Did you know? In 2020, intermediate services (services that serve as inputs to other economic activities) accounted for 77% of total EU services exports and 84% of EU services imports. Source: Eurostat.

Figure 13. Intra-EEA STRI average, minimum and maximum scores by sector, 2021 Minimum

Maximum

Average

EEA MFN Average

Insurance

Road freight transport

Computer services

Logistics freight forwarding

Motion pictures

Construction

Engineering services

Logistics customs brokerage

Maritime transport

Telecommunication

Sound recording

Commercial banking

0

Architecture services

0.1

Logistics storage and warehouse

0.1

Courier services

0.2

Broadcasting

0.2

Distribution services

0.3

Logistics cargo-handling

0.3

Rail freight transport

0.4

Legal services

0.4

Accounting services

0.5

Air transport

0.5

0

Note: The STRI indices take values between zero and one, one being the most restrictive. The intra-EEA STRI quantifies barriers to services trade within the Single Market of the EEA. By contrast, the STRI database records measures on a Most Favoured Nations basis, where preferential trade agreements are not taken into account. Air transport and road freight cover only commercial establishment (with accompanying movement of people). Source: Intra-EEA STRI database (http://oe.cd/stri-db).

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18 | In 2021, the regulatory environment in the EEA became more liberal in commercial banking, insurance, and distribution services (Figure 14). The reforms in the two financial services sectors were driven by Iceland and Finland. In June 2021, Iceland introduced a new Foreign Exchange Act that removed the last of the capital account restrictions imposed in November 2008. Foreign exchange transactions, and cross-border payments and capital movements are now free. Finland removed a temporary prohibition on direct marketing of consumer credit and credit intermediation in September 2021. The liberalisation in distribution services is due to reforms in Germany related to the introduction of online registration and declaration of VAT for a wide range of activities through the One-Stop-Shop (OSS). Other relevant changes across the EU include the abolishment of the value-added tax de minimis regime for goods valued under EUR 22 from 1 July 2021. Figure 14. Intra-EEA services trade policy changes, 2020-21 percentage point Cumulative trade liberalisations, 2020 to 2021 %

Cumulative trade restrictions, 2020 to 2021

0

-0.002 -0.004 -0.006 -0.008 -0.01

Distribution services

Commercial banking

Insurance

Source: Intra-EEA STRI database (http://oe.cd/stri-db).

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| 19

About the STRI This note highlights the key outcomes of the 2021 OECD Services Trade Restrictiveness Index (STRI) update and the latest trends affecting services trade and digital trade. It also indicates best practices and the countries that lead in services reforms. Since 2014, the OECD STRI has been a unique tool providing annual information on regulatory changes that affect trade in 50 countries and 22 key services sectors. The indicators take values between zero and one, with one indicating the most restrictive trade environment. The STRI is complemented by the OECD Digital STRI that measures barriers to trade in digitally enabled services as well as the OECD intra-EEA STRI that covers barriers within the European Economic Area. The STRI offers a comprehensive and transparent overview of global trends in services trade regulations, facilitating deeper analysis of the effects of such regulations on trade in services and the wider economy. This year, the STRI covers policy developments on services trade that were implemented up to 31 October 2021. This update includes changes introduced through new or amended laws and regulations. This evidence-based tool allows policy makers to benchmark their policies relative to global best practice, and to consider the likely impact of any reform options. The STRI also helps trade negotiators identify restrictions that impede trade and is a source of regulatory transparency for businesses seeking to enter foreign markets.

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20 |

References Benz, S. and F. Gonzales (2019), “Intra-EEA STRI Database: Methodology and Results”, OECD Trade Policy Papers, No. 223, OECD Publishing, Paris, https://dx.doi.org/10.1787/2aac6d21-en.

[4]

Benz, S., F. Gonzales and A. Mourougane (2020), “The Impact of COVID-19 international travel restrictions on services-trade costs”, OECD Trade Policy Papers, No. 237, OECD Publishing, Paris, https://dx.doi.org/10.1787/e443fc6b-en.

[6]

Benz, S. and A. Jaax (2020), “The costs of regulatory barriers to trade in services: New estimates of ad valorem tariff equivalents”, OECD Trade Policy Papers, No. 238, OECD Publishing, Paris, https://dx.doi.org/10.1787/bae97f98-en.

[2]

Ferencz, J. (2019), “The OECD Digital Services Trade Restrictiveness Index”, OECD Trade Policy Papers, No. 221, OECD Publishing, Paris, https://dx.doi.org/10.1787/16ed2d78-en.

[5]

Mourougane, A., S. Benz and F. Gonzales (2021), “Services trade in the United Kingdom and the global economy”, OECD Trade Policy Papers, No. 257, OECD Publishing, Paris, https://dx.doi.org/10.1787/b602b468-en.

[1]

Mourougane, A., A. Jaax and Gonzales, F (2021), Key factors explaining the services trade collapse in the wake of the COVID-19 crisis.

[9]

Nemoto, T. and J. López González (2021), “Digital trade inventory: Rules, standards and principles”, OECD Trade Policy Papers, No. 251, OECD Publishing, Paris, https://dx.doi.org/10.1787/9a9821e0-en.

[11]

OECD (2021), COVID-19, international mobility and trade in services: The road to recovery, https://read.oecd-ilibrary.org/view/?ref=1060_1060132-r39k8it7q7&title=COVID-19international-mobility-and-trade-in-services-The-road-to-recovery.

[10]

OECD (2020), Leveraging Digital Trade to Fight the Consequences of COVID-19, https://read.oecd-ilibrary.org/view/?ref=135_135517-02bikxyksj&title=Leveraging-DigitalTrade-to-Fight-the-Consequences-of-COVID-19.

[7]

WTO (2020), Overview of Developments in the International Trading Environment.

[8]

WTO and OECD (2021), Services Domestic Regulation in the WTO: Cutting red tape, slashing trade costs, and facilitating services trade, https://issuu.com/oecd.publishing/docs/oecdwto-brief-sdr-2021.

[3]

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Annex A. Policy changes across countries This annex presents the main policy changes identified in the annual STRI update for the countries covered. Detailed country information and summary notes can be found on the STRI website and online database. 1 Australia In 2021 the Design and Building Practitioners Regulation 2021, under the Design and Building Practitioners Act 2020, entered into force. This regulation regulates the registration of design practitioners, building practitioners and professional engineers in the construction sector and establishes a process to recognise qualifications conferred by foreign universities. Also in 2021 the number of documents required for business visa applications was revised and reduced. In 2020, Australia improved conditions for the recognition of professional qualifications gained abroad as actuaries. With the introduction of the Temporary Skill Shortage visa (subclass 482) in March 2018, foreign services providers are allowed to stay in the country for up to four years, compared to three years with the old 457 visa. In June 2016, New South Wales introduced a 4% surcharge for foreign persons (including foreign corporations) in addition to the duty payable on the purchase of residential property. Furthermore, foreigners are subject to a land tax surcharge of 0.75% in 2017 for residential property. Austria The maximum foreign equity share allowed in legal services was reduced to 25% for domestic as well as international law in 2020. Moreover, the new Austrian Investment Control Act, which entered into force in July 2020, expanded the scope of the screening of foreign investments. Screening exists without exclusion of economic interests in 14 services sectors. A new permit for intra-corporate transferees was introduced in October 2017. The period of validity has been extended from one to three years for managers and specialists. In addition, parts of the fixed line telephony market were deregulated in May 2017 following market analyses by the regulator. Changes resulting from EU law are described under the European Union heading in this Annex. Belgium One of the main rail freight operators in Belgium, B Logistics, was partially privatised in 2015, with the state-owned Belgian national railway company, SNCB, now owning only 31% of its equity shares. Changes resulting from EU law are described under the European Union heading in this Annex.

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Available at http://oe.cd/stri.

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22 | Brazil In February 2021 a new law reformed the governance structure of the Banco Central do Brasil (Brazil Banking Supervisory Authority). This reform included recognising the Banco do Brasil’s independency and financial autonomy, as well as its full authority over licensing and enforcement of prudential measures. The reform also includes a limitation of the length of term applicable to its governing body. In 2020, Brazil eased the licensing conditions for foreign banks and insurance providers, levelling the playing field compared to domestic financial services providers. A new General Data Protection Law (Lei Geral de Proteção de Dados Pessoais) entered into force in September 2020. The new law provides for the possibility to transfer personal data abroad if certain private sector safeguards are in place. In distribution services, policy changes in 2019 removed upper limits on shop opening hours. In 2018, Brazil implemented significant reforms on foreign investment in local airlines through Presidential Measure (PM) No. 863/2018. Congress converted the PM into Federal Law No. 13,842/2019 on 17 June 2019, embedding the reforms into the Brazilian Aeronautics Code (Federal Law No. 7,565/1986). Key reforms included the removal of a 20% cap on foreign participation in Brazilian airlines, allowing foreigners full ownership of the share capital. Limitations were also lifted on foreign control and management of Brazilian airlines, together with restrictions on the issuance and transfer of shares to foreigners. The Federal Supreme Court ruled in 2015 to exempt the designated postal operator from VAT and other local taxes for both its postal and courier services. In the same year, the temporary licensing for accountants and auditors was removed. Canada In April 2021, the Canadian Radio-television and Telecommunications Commission issued a series of reforms in the new telecommunications regulations following a review of mobile wireless services. In particular, the policy CRTC 2021-130 allowed regional mobile carriers to access the networks of the four existing carriers in Canada. Rates between regional mobile carriers and existing carriers are commercially negotiated between the parties, and the service is mandated for seven years. Since 2019, contracts for universal services obligations in the telecommunications sector are assigned on a competitive basis, which reduces barriers to competition. Regarding distribution services, since 2019 the pre-packaging of products is no longer subject to mandatory nominal quantities in distribution services. As of May 2018, Bill C-49, an amendment to the Canada Transportation Act, eased foreign ownership restrictions by lifting the foreign equity limit in the air transport sector from 25 to 49%. However, the voting share limits in Canadian airlines for individual foreign investors and foreign air carriers collectively remain at 25%. Chile In 2017, Chile revised its customs regulation, introducing, inter alia, an Authorised Economic Operators Scheme open to foreign firms and authorising the release of goods before the determination and payment of duties.

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| 23 China, People’s Republic of The Measures on Security Review of Foreign Investment came into force on 18 January 2021 that introduce tighter rules for foreign investment reviews on national security grounds. On 10 June 2021, China adopted a new Data Security Law which covers new rules related to data activities by businesses in China. The 2020 edition of the Special Administrative Measures for the Access of Foreign Investment (Negative List) introduced liberalisation of foreign ownership and legal forms in life insurance services, as well as easing the conditions for registered capital by foreign firms economy-wide. In 2019, the Special Administrative Measures for the Access of Foreign Investment (Negative List) was updated to introduce liberalisation in services sectors such as transportation or value-added telecommunications. The limitation of 49% equity for foreign participation in domestic maritime transport was lifted, together with previous requirements related to joint ventures in this sector. On 15 March 2019, China’s National People’s Congress (NPC) passed the Foreign Investment Law of the People’s Republic of China, which entered into force on 1 January 2020. The new Law replaces three previous laws regulating foreign-invested enterprises: the Law on Sino-Foreign Equity Joint Ventures, the Law on Wholly Foreign-Owned Enterprises, and the Law on Sino-Foreign Cooperative Joint Ventures. On 28 July 2018, the Special Administrative Measures for the Access of Foreign Investment (Negative List) issued by the Ministry of Commerce and the National Development and Reform Commission came into effect, replacing sections of the 2017 Catalogue of Industries for Guiding Foreign Investment. Compared to the 2017, the 2018 list relaxes or removes restrictions on foreign investments in several areas, including legal services, insurance, maritime transport, and logistics cargo-handling services. Nonetheless, services sectors that are included in the Negative List remain subject to government approval and sector specific requirements. A Cybersecurity Law entered into effect in 2017, introducing new restrictions affecting transfers of data abroad. This law remains the main framework regulating cross-border transfers of data. In September 2016, the general requirement for prior approval of foreign investments was replaced with an online notification requirement. In the same year, the Telecom Business Classification Catalogue introduced the mandatory resale of mobile communication services, while in professional services the applicable standards on fee setting were eased. Nationality requirements for directors of accounting and auditing firms were lifted, but residency requirements were maintained. Colombia Law 2155 of 2021 modified the internal tax de minimis regime that applied to goods imported via postal traffic, urgent shipments or fast delivery and narrowed its application to goods originating from countries with which Colombia has a trade agreement that expressly provides for the exemption of this tax. Furthermore, Decree 1165 of 2019 introduces several reforms in Colombia’s customs regime and, in particular, clarifies the registration or authorization regime applicable to logistics service providers, including customs brokers (authorization regime), freight forwarding (registration regime) and warehousing activities (habilitacion regime). In 2017, a new transparency requirement was introduced that promoted public participation. In the same year, Colombia passed an immigration reform which aimed to stream the immigration process. The reform prolonged the duration of stay of certain visa categories, but not to others such as Intra-Corporate Transferees, which according to the new “V” type visa are allowed stays of up to two years (down from three years). In 2016, the Decree 390 imposed minimum warehouse surface for postal operators, and THE OECD SERVICES TRADE RESTRICTIVENESS INDEX: POLICY TRENDS UP TO 2022 © OECD 2022


24 | introduced an obligation for courier services operators to be available 24/7. In 2015, the Financial Superintendence gained financial autonomy. Costa Rica Between 2019 and 2021 Costa Rica adopted a series of reforms lifting the restriction on foreign branches of commercial banks. As of 2020, restrictions on advertising no longer apply to architecture and engineering services. In 2017, Costa Rica ratified the United Nations Convention on Contracts for the International Sale of Goods, aligning national contract rules for cross-border transaction to internationally standardised rules. Since 2016, foreign accounting professionals that have a local or recognized degree are no longer required to take a local examination. In 2015, the Ley de Garantias mobiliarias introduced a securities system that facilitates the constitution, publicity and execution of warranties; this has contributed to further liberalising the banking sector. Czech Republic In February 2021, a new Act on the Examination of Foreign Investments entered into force creating new screening mechanisms of foreign direct investment based on national security considerations. These new screening provisions apply to sectors such computer services, telecommunication, broadcasting, road freight transport and rail freight transport services. In April 2017, the Regulatory Body for Access to Transport Infrastructure (Úřad pro přístup k dopravní infrastruktuře) was established as an independent regulator to oversee access to the rail infrastructure for rail transport operators. Changes resulting from EU law are described under the European Union heading in this Annex. Denmark As of 1 July 2021, Denmark introduced a mandatory investment screening process for non-EU investments with shares of at least 10% in sensitive sectors to national security or public order. These include, among others, investments related to certain IT sectors, critical technology and critical infrastructure. Screening is carried out by the Danish Business Authority. The new law applies to investments made after 1 September 2021. Changes resulting from EU law are described under the European Union heading in this Annex. Estonia In 2017, the duration of stay for intra-corporate transferees was extended from 24 to 36 months, while in 2018 the duration of stays for independent services suppliers was extended from 24 to 60 months. Changes resulting from EU law are described under the European Union heading in this Annex. European Union With effect from 1 July 2021, the EU abolished the VAT de minimis regime for goods valued under 22 EUR (Directive (EU) 2017/2455). On 19 March 2019, the EU adopted Regulation (EU) 2019/452 that allows EU Member States to maintain, amend or adopt mechanisms to screen foreign direct investments in their territory on grounds of security or public order. It applies from 11 October 2020. Revisions in the EU Customs Code in 2020 include an increase in the cost of business visitor visas from EUR 60 to EUR 80.

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| 25 In the context of the COVID-19 pandemic, Regulation (EU) 2020/459 waived the 80/20 grandfathering rule for airport slot allocations between 1 March 2020 and 27 March 2021. Accordingly, airport co-ordinators are required to consider slots allocated for this period as having been operated by the air carrier to which they were initially allocated. In maritime transport, Regulation (EU) 2020/436 extended the existing block exemption to liner shipping consortia from competition law until April 2024. In March 2019, Regulation (EU) 2017/352 establishing a framework for the provision of port services and common rules on the financial transparency of ports entered into force, harmonising rules related to the provision of port services. The new EU General Data Protection Regulation (Regulation (EU) 2016/679) entered into force on 25 May 2018 providing a comprehensive update on the EU data protection regime. Regulation (EU) 952/2013 revised the conditions, including on economic needs, that apply to authorisations for the operation of storage facilities for the customs warehousing of goods. These changes entered into force in 2016. Finally, in 2016, Directive (EU) 2016/943 harmonised the protection of undisclosed know-how and business information. Finland An amendment to the Law on the Information Society entered into force on 1 January 2021 requiring that providers of on-demand audiovisual media services secure at least a 30% share of European works in their catalogues and ensure prominence of those works. Since July 2021, double registration of a foreign vessel under the Finnish flag is allowed in those cases where the foreign vessel, which is registered in the ship register of another state in terms of ownership, is chartered to Finland under a bareboat charter agreement (bareboat-in cases).The charterer has to be a Finnish/EEA citizen or corporation. A temporary measure in view of the COVID-19 pandemic prohibits direct marketing of consumer credit and credit intermediation services. This measure was put in place in July 2020 but expired in September 2021. In 2020, Finland also introduced new conditions for non-EU/EEA individuals and entities seeking to buy real estate in the country. In commercial banking, new regulations were introduced in 2020 on interest rates and conditions for consumer credits. In the distribution sector, shop-opening hours were deregulated and labelling standards were reformed in 2016. Destia, a major state-owned construction enterprise, was privatised in 2014. Changes resulting from EU law are described under the European Union heading in this Annex. France In 2019, the public procurement regulation was modified to extend the non-discriminatory treatment in the public procurement process to all foreign entities. Credit registry with equal access of all lending institutions was recently revoked. Since 2015, a transport company established outside of France and seeking to provide cross-border transport services to France must submit a notification to the labour inspectorate where the service will be provided (déclaration préalable de détachement transnational). Changes resulting from EU law are described under the European Union heading in this Annex.

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26 | Germany In 2021 Germany introduced online registration and declaration of VAT for a wide range of activities through the One-Stop-Shop (OSS). Changes resulting from EU law are described under the European Union heading in this Annex. Greece On September 2019, capital control measures limiting the free outflow of money and foreign exchange transactions were lifted. A year earlier, in 2018, the limitation on duration of stay for independent services suppliers was extended from 24 to 36 months. Changes resulting from EU law are described under the European Union heading in this Annex. Hungary In the context of the COVID-19 pandemic, Hungary introduced a temporary foreign investment screening mechanism to protect public security, public order and health. This applies in certain sectors included in Government Decree 289/2020. The applicability of the temporary screening mechanism was extended until 31 December 2021 (see Gov Decree 189/2021) On 1 January 2019, the new Law on the Control of the Foreign Investments Offending the National Security of Hungary entered into force. The Law establishes a verification procedure of investors’ conformity with national security interests (pre-screening procedure) for specific activities. As of 2016, intra-corporate transferees from third countries can stay in Hungary up to 12 months on their initial permit. Since 2015, Hungary applies quotas on work permits for natural persons who do not have an EU nationality and are travelling on a temporary basis to the country. Changes resulting from EU law are described under the European Union heading in this Annex. Iceland In June 2021, a new Foreign Exchange Act came into force removing the last of the capital account restrictions imposed since November 2008. Foreign exchange transactions, and cross-border payments and capital movements are now unrestricted. In January 2020, the state's monopoly on letters weighing less than 50 grammes was abolished. Also in 2020, the Financial Supervisory Authority became part of the Central Bank of Iceland. The length of term for heads of the Authority was extended to five years, compared to four years before. Iceland also reformed its copyright enforcement regime, abolishing a statutory monopoly in copyright management in sound recording and aligning its regulation of copyright management and subsidies in the film industry with EU Directives. Deregulation of mobile telecommunications services took effect in 2017 and fixed line telecommunications in 2018. However, restrictions on movement of people introduced in 2017 limit access for contractual services suppliers to education and R&D activities. These measures include conditioningwork permits for intra-corporate transferees and independent services suppliers to the purchase of local health insurance. India In 2020, India eliminated pricing guidelines for transfers of shares between residents and non-residents, lowering barriers to services trade horizontally in all sector. The same year saw the introduction of regulation on non-discriminatory interconnection rates in the telecommunications sector. Self-handling for

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| 27 air cargo operators was allowed in 2019. In 2018, a number of restrictions were lifted on cabotage in maritime transport. Since 2018, all payment system operators in India are required to ensure that data related to payment systems operated by them are stored only inside the country. In 2017, India tightened its services regime by introducing an equalization levy of 6% on purchases of online advertising services from non-resident companies. In 2015, India lifted foreign equity limits from 26% to 49% in the insurance sector and foreign branches were permitted in reinsurance. Further investment liberalisation took place in 2016 when foreign equity limits were removed for airport services and cable and satellite broadcasting, and foreign equity limits were eased in civil aviation. Minimum capital requirements for establishing a company were eliminated in most sectors in 2016. Indonesia Presidential Regulation No. 10 of 2021 took effect in March 2021 setting out important new regulation on foreign investment in Indonesia and replacing the previous Presidential Regulation No. 44 of 2016 that introduced a negative list for investment regulation. Among others, the new Regulation lifted maximum foreign equity shared allowed for construction services and reduced the number of sectors that are closed to foreign investment. However, in some cases, such as air transport services, the new Regulation introduced more stringent conditions such as lowering the foreign equity limit to 49% after it had been raised to 67% in the 2016 Regulation. The new investment Regulation was one of the implementing measures introduced as a result of the 2020 Law No. 11 Omnibus Law on Job Creation which aimed to improve the investment conditions for foreign investment. As of 2018, the foreign equity limit in accounting firms was lowered to 20%, from 49% previously. The law also requires one half of all partners to be licensed accountants. Furthermore, technical specifications should now use local products and follow national standards subject to availability in the construction sector, which affects the conditions of competition in public procurement in favour of local providers. In 2017, more favourable conditions for the release of imported goods before determination and payment of duties benefitted distribution, courier and logistic services. In the same year, Indonesia revoked minimum capital requirements for maritime transport service. However, the Construction Act of 2017 imposed nationality requirements on the management of construction and architecture companies. Indonesia has fully or partially opened several sectors to foreign investment under the 2016 Negative Investment List. These include airfreight transport, logistics services, telecommunications, audio-visual services, and architecture and engineering services. Minimum capital requirements were removed in 2016. Ireland In 2020, Ireland shortened the procedure time for issuing visas, which improved the regulatory transparency for business in all the sectors. In 2016, Ireland introduced a timeframe of six months within which the Central Bank of Ireland, the sector regulator, must decide on applications for authorisations to provide insurance services. Changes resulting from EU law are described under the European Union heading in this Annex.

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28 | Israel In 2019 Israel established an advisory committee to assess the national security implications of foreign investment in certain sectors such as finance, communications, infrastructures, transportation and energy sector. In 2018, conditions affecting foreign ownership of terrestrial broadcasting companies were eased by raising foreign equity limits to 74% from 49%. Also, in 2018, a temporary licencing procedure for foreign architects and engineers was put in place. In commercial banking, the residency requirement for two-thirds of the board members of banks was lifted in 2017. In 2016, the Capital Market, Insurance and Savings Authority, the sector regulator for insurance services, became independent of the Ministry of Finance. Italy Since December 2020 and within the framework of Regulation (EU) 2019/452 Italy has regulated the possibility for foreign investments in sectors such as construction, engineering and audiovisual services to be subject to screening mechanisms, due to strategic importance and national security considerations. In 2017 Italy adopted a modification to the Consolidated Law on Banking introducing restrictions on branches of non-EU foreign banks. Moreover, since September of the same year, the Ministry of Economics and Finance acquired control of a major firm in the sector. Finally, in 2019 Italy enacted requirements to commercial presence of non-EU foreign banks within the framework of the EU Directive 2013/36/EU. In 2017, Italy has implemented Directive 2014/66/EU regarding intra-corporate transferees from non-EU countries. Accordingly, the maximum stay for intra-corporate transferees was reduced from five to three years. Other changes resulting from EU law are described under the European Union heading in this Annex. Japan Since June 2021 the Food Sanitation Act provides that food hygiene controls for all food business operators must be based on Hazard Analysis and Critical Control Point (HACCP) principles. In 2017, Japan amended the Customs Business Act to eliminate the need for a dedicated customs broker in each office and the economic need tests for authorizing business licenses. Also in 2017, a new data protection law entered into force. In 2015, Japan abolished the previous requirement for the domestic company registration, that at least one of the representative directors must be resident in Japan. Kazakhstan Since 16 December 2020, foreign banks and foreign re/insurance companies are allowed to establish branches in Kazakhstan. To open its branch in Kazakhstan, foreign bank or foreign re/insurer must ensure the existence of an agreement between the authorized regulator of the Republic of Kazakhstan and the financial supervision body of the state of origin of the foreign bank or foreign re/insurance organization. At least two executive managers of a Kazakhstani branch of a foreign bank or a foreign re/insurance company must be residents of the Republic of Kazakhstan. Since 2019, a new law on currency control treats branches of foreign companies as "residents" requiring them to conduct all transactions with other residents in the local currency. However, it remains possible to perform transactions between a resident and a non-resident in foreign currency.

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| 29 In the construction sector, as of 1 July 2020, design and construction works were removed from the list of public procurement to be conducted by way of tender with prior qualification selection, easing access to foreign suppliers. In the maritime services sector, provisions granting to the National Sea Shipping Company benefits and preferences for the mandatory services rendered by maritime ports was repealed in 2019. Korea In August 2020, Korea introduced important amendments to the Personal Information Protection Act (PIPA), including with respect to the treatment of pseudonymized information, the transfer of certain provision on personal information from Act on the Promotion of Information and Communications Network Utilization and Information Protection’s to the PIPA, and the addition of certain types of information to the scope of “sensitive information”. As of March 2019, foreign IT services providers with no office in Korea must designate a local agent responsible for data privacy compliance. In 2017, the number of licenses for road transport operators was regulated. In the same year, new requirements were introduced on the acquisition of land and real estate by foreigners. The requirement that foreign investors transfer stocks to Korean national(s) within six months in cases where their registration is cancelled was lifted in 2015. Restrictions on internet banking were also lifted. Conversely, a requirement that only licensed architects may establish an architectural firm was introduced. Latvia In 2019, Latvia undertook structural reforms in financial services, modifying the system of supervision. As of January 2017, the fixed telecommunication market segment is deregulated. Since 2014, Latvia has also tightened regulation in a few sectors, most notably in telecommunications and broadcasting services with the introduction of investment screening mechanisms in 2017. Finally, Latvia removed schedules for airport use for passenger carriers in 2018. Changes resulting from EU law are described under the European Union heading in this Annex. Lithuania In 2018, new conditions were introduced for obtaining subsidies for movie production. As of June 2017, the market for fixed telephony was deregulated following market analyses by the regulator. Since that same year, foreign professionals are no longer required to take a local examination in order to become a licensed auditor. Up to 28 November 2017, at least one person of the administration of a company providing banking services had to live in Lithuania; this requirement has been lifted. In 2016 Lithuania tightened the limitation on the duration of stay for contractual services suppliers which changed from 36 to 12 months. Changes resulting from EU law are described under the European Union heading in this Annex. Luxembourg Since December 2015, the approval to establish a branch may be refused if reciprocity for Luxembourg companies is not ensured by national law. Changes resulting from EU law are described under the European Union heading in this Annex.

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30 | Mexico In recent years, Mexico has passed a series of reforms, including, inter alia, a new telecommunications and broadcasting law, and a new financial law. The telecommunications reform eased foreign participation in the mobile and fixed-line services segments of the sector. It also introduced a new independent regulator, with exclusive authority over the sector and new sanctioning powers, and a series of procompetitive measures challenging the dominant position of incumbent firms. The financial reform aimed to strengthen prudential regulation, increase credit penetration and promote competition. As a result, foreign financial institutions can now open branches in Mexico to provide insurance services. Although this possibility is still subject to government authorisation, and granted on the basis of reciprocity, it nevertheless increases certainty and clarity on the regulatory environment applied to insurance services. In 2015, Mexico established an independent rail regulatory agency. In 2017, it rolled back the foreign equity restrictions on domestic air transport services; foreign ownership of air companies is now permitted up to 49%. In 2020, the adoption of the Ley de Infraestructura de la Calidad (Quality Infrastructure Law) has promoted the adoption of international standards for construction services. As of June 2019, Mexico reduced the de minimis threshold for which no duties are imposed on imports up to USD 50 (and down from USD 300). This policy change will affect business operations in the distribution, logistics and courier services sectors. Malaysia Malaysia has eased foreign investment conditions in services, including in telecommunications, professional, distribution and courier services. In 2015, the Registration of Engineers (Amendment) Regulations entered into force, allowing full foreign ownership in engineering firms. Netherlands The divestment of ASR Nederland N.V., previously a state-owned insurance provider, was completed in September 2017. Also in 2017, the Government’s share in ABN AMRO Group N.V. was reduced to 56% (from 63%). Changes resulting from EU law are described under the European Union heading in this Annex. New Zealand In May 2020 and in response to the COVID 19 pandemic, New Zealand introduced a national interest assessment for foreign direct investment in strategically important businesses. In June 2020, New Zealand introduced interest rate regulation for consumer credit contracts. On 1 December 2019 New Zealand abolished its de minimis threshold for online shopping, requiring that most overseas businesses selling goods to consumers in New Zealand charge goods and services tax. In April 2017, the Trade Single Window (TSW) was deployed, including the introduction of a system for pre-arrival processing of shipments. For motion pictures services sector, a temporary ban on the parallel importation of films for commercial sale for a period of five months from the film’s international release ended on 31 October 2016. In May 2015, the Companies Act 1993 was amended to require all companies to have at least one director domiciled in New Zealand or in an “enforcement country” (currently Australia only). Norway In 2020, Norway changed its de minimis regime for small value consignments. From 1 April 2020, foreign sellers of goods with value lower than NOK 3 000 (about USD 340) per unit are eligible to use a simplified VAT scheme ‒ the VAT on Electronic Commerce (VOEC). At the same time, the threshold for customs

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| 31 duties has been raised from NOK 350 (about USD 40) to NOK 3 000 for goods where the obligation to collect Norwegian VAT is handled through the VOEC scheme. As of 1 January 2019, a new investment screening mechanism has been in effect. It covers investments in certain companies whose activities are essential to national security interests, including national financial stability and autonomy. The screening mechanism applies to direct or indirect acquisitions of one-third or more of the share capital, assets, or voting rights or transactions that would enable the acquirer to exercise significant control over the company. Investments that impose a “not insignificant” risk to national security interests may be blocked or subjected to further conditions. In 2018, the government sold all its shares in Scandinavian Airlines. A new law on copyright protection entered into force in 2018, which improved the protection of rights holders. The new EU General Data Protection Regulation (Regulation No. 2016/679) entered into force on 25 May 2018, providing a comprehensive update on the EU data protection regime. In 2017, pro-competitive regulations overseen by an independent regulator were introduced in the rail freight sector and an independent appeal body was established under competition law. Courier services were liberalised in 2016 with the adoption of the EU postal directive. In telecommunications, fixed line origin was deregulated in 2016. However, as from the same year only EEA operators benefit from regulated termination rates in fixed and mobile markets. Poland In January 2019, Article 114a of the Alien Act entered into force, introducing quotas for natural persons seeking to provide services in the country on a temporary basis as intra-corporate transferees, contractual services suppliers and independent services suppliers. In 2018, Poland introduced an investment screening mechanism; the law on the control of certain investments requires investors to obtain prior approval from the competent minister before acquiring shares of Polish companies operating in strategic sectors. Also in 2018, Poland introduced a new Act Governing the Business Operations of Foreign Enterprises and other Foreign Persons on the Territory of the Republic of Poland. The Act improves the regulatory environment for entrepreneurs by uniting previously dispersed provisions in one law and eliminating legal uncertainties. Changes resulting from EU law are described under the European Union heading in this Annex. Portugal In 2020 Portugal introduced broadcast or airtime quotas are in place for national and European film productions. A reform implemented in 2017 extends the duration of the visa for contractual services suppliers and independent services suppliers on their first entry permit from four to twelve months. In 2015, a liberalisation measure in the architecture services sector repealed a reciprocity requirement for admission to the Portuguese Order of Architects, which is a prerequisite to practice in Portugal. At the same time, however, a similar reciprocity requirement was introduced in the Order of Portuguese Engineers and the Order of Portuguese Technical Engineers. Changes resulting from EU law are described under the European Union heading in this Annex.

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32 | Russian Federation Since August 2021 foreign insurance companies are allowed to establish branches in the Russian Federation. To open its branch, foreign re/insurer must ensure the existence of an agreement on information exchange between the authorized regulator of the Russian Federation and the financial supervision body of the foreign re/insurer’s State of origin. As of December 2021, the owners of communication lines crossing the State Border of the Russian Federation can only be Russian legal entities. As of 2021, a telecom operator that provides an access to the Internet is obliged to provide to its subscribers, without charging a fee, access to websites, information systems and computer programs included in the list of domestic socially significant information resources (in particular, to the websites of state agencies). The list of such sites is to be established by the Government of the Russian Federation. As of 2021, an operator providing cable television broadcasting must provide the state regulator with an access to its communications network for installation of technical means of control that would enable the regulator to verify that the providers of TV channels (TV programs) broadcasted in the communication network of this operator comply with the legislation of the Russian Federation on mass media. As of 2021, a foreign entity that owns an Internet website accessed during one day by more than five hundred thousand Internet users in the Russian Federation and which is either i) distributing information in the state languages of the Russian Federation; ii) distributing advertising aimed at Russian consumers; iii) processing personal data of Russian users, or iv) receiving funds from Russian legal entities or persons, is subject to Russian regulation. In particular it must incorporate a legal entity or open a branch or representative office in the Russian Federation. In case of non-compliance, the state authorities can ban the distribution of advertising on its Internet website. Other possible sanctions that could be imposed by the regulator include prohibiting the collection and cross-border transfer of personal data and the partial or complete blocking of the Internet resource of the foreign entity. As of 2021, the Government limited the provision of information on certain Russian entities (such as issuers of securities, credit and insurance organizations, specialized depositories, enterprises of the defence complex, etc.) to audit organizations that are under the direct or indirect control of a foreign citizen or foreign legal entity. A new 2020 Law on protection and encouragement of investments provides for the possibility to enter into investment agreements with the State or its municipalities to benefit from a preferential regime. Such investment agreements include State’s guarantees of protection in the form of a stabilization clause (that could apply to taxation or land use rights), as well as State subsidies in reimbursing costs for development of the investment project’s infrastructure (including transport and digital infrastructure). Such investment agreements can only be concluded with a legal entity incorporated in the Russian Federation. Singapore Singapore has undergone important regulatory reforms over the past years that have contributed to significant services trade liberalisation. The Competition (Block Exemption for Liner Shipping Agreements) Order which exempts maritime liner shipping agreements from certain obligations under the Competition Act expired on 31 December 2021. In 2017, new reforms were introduced to allow foreign architects from jurisdictions that entered into mutual recognition agreements with Singapore. In 2017, several reforms in the courier and postal sector aimed at promoting competition in the sector. Since 2015, commercial associations between law practices and other professionals are allowed. THE OECD SERVICES TRADE RESTRICTIVENESS INDEX: POLICY TRENDS UP TO 2022 © OECD 2022


| 33 Slovak Republic As of 2018, in Accounting, the Slovak Republic eased its procedures for recognition of qualifications gained in third Countries. In courier services, a dispute settlement mechanism, under the auspices of the regulatory authority, was introduced in 2016. Other changes resulting from EU law are described under the European Union heading in this Annex. Slovenia Since October 2020 Slovenia has introduced screening of foreign direct investment on the grounds of security or public order. As of 2018, intra-corporate transferees from third countries can stay in Slovenia up to 36 months on their initial permit. In 2016, Slovenia adopted a new Collective Management of Copyright and Related Rights by which conditions for membership in a collective copyright management body are based on objective, transparent and non-discriminatory rules. Other changes resulting from EU law are described under the European Union heading in this Annex. South Africa The Protection of Investment Act entered into force in 2018 providing for new restrictions on foreign investments in South Africa. As of 2018, foreign insurance companies can establish branches in the country and insurance providers shall appoint a resident person as its public officer. Spain In the context of the COVID-19 pandemic, new rules for the screening of foreign investments introduced in 2020 increased the level of regulatory restrictiveness for most services sectors. Parts of the telecommunications market were deregulated in 2017 following market analyses by the regulator. Other changes resulting from EU law are described under the European Union heading in this Annex. Sweden Fixed line telephony was deregulated in 2017, and the market for high-quality access to leased lines were deregulated in 2018 following market analyses by the regulator, which found the markets to be competitive. Other changes resulting from EU law are described under the European Union heading in this Annex. Switzerland In 2019 Switzerland reformed the public procurement law. This reform entered into force in 2021 and represents an important step in the direction of a more harmonized and updated policy regime. While the STRI methodology does not fully capture all policy dimensions of this comprehensive reform, it highlights the potential discrimination against certain foreign providers with respect to the opportunity to challenge the consistency of the conduct of procurement with respect to the relevant laws and regulations. In 2019, the import monopoly on ethanol over 80% was abolished, easing restrictions on foreign entry in distribution services.

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34 | Thailand In May 2019 Thailand enacted a new Personal Data Protection Act establishing a framework for data protection and regulates cross-border data flows. The full enforcement of this Act has however been postponed to the second quarter of 2022. As of 2017, publicly controlled firms are not exempted from the Trade Competition Act. However, certain sectors are subject to specific competition regulation and thus exempt from the Trade Competition Act. These include, among others, telecommunications, financial services and civil aviation. Turkey In 2020, the establishment of a local presence in Turkey became a requirement for the cross-border provision of services in the case of computer services, motion pictures, sound recording, and broadcasting services. In addition, in telecommunications a regulation that entered into force in 2019 obliges communication service providers to set up internet exchange points in Turkey. Following the introduction of a set of rules in 2019, certain data must be stored locally in several sectors, such as computer services and accounting services. In the commercial banking sector, the length of term of heads of the supervisory authority was reduced from five to four years in 2018. In 2016, Turkey adopted a new law on the protection of personal data. In 2015, Turkey adopted a regulation implementing the 2013 Law on Liberalisation of the Turkish Rail Transport. The new regulation paved the way for operationalising the reforms prepared for the rail transport sector. Also, in 2015, all entities providing e-payment and e-money services are granted a license provided they meet certain requirements, including having their operations located in Turkey through a commercial presence (in the form of a jointstock company). United Kingdom The United Kingdom left the European Union in January 2020 and entered into a transition phase which ended on 31 December 2020. A large number of new legislations and regulatory amendments were introduced as a result, and some of these have implications for the STRI. A few examples are described below. Contractual services providers and independent professionals can enter the UK on the T5 (Temporary Worker) International Agreement Worker immigration route which replaced the Tier 5 (Temporary Worker) route as of 1 December 2020. In addition, a new Skilled Worker visa route was introduced to replace the Tier 2 (General) visa route together with a new points-based system. Under this route, previous caps on the maximum number of Tier 2 (General) visas have been suspended and there is no longer a requirement for employers to undertake a Resident Labour Market Test. However, rules on sponsorship control continue and include the need to obtain a sponsorship license and pay the Immigration Skills Charge for the duration of the employment. As of January 2021, this charge must also be paid for EU/EEA nationals applying for a Skilled Worker route. An updated Intra-Company Transfer route was also set up for workers who are being transferred by the business they work for to do a skilled role in the United Kingdom. On 1 January 2021, the UK formally acceded to the WTO General Procurement Act (GPA) on its own right having been previously part of the GPA as an EU member state before. In air transport services, the Operation of Air Services (Amendment etc.) (EU Exit) Regulations 2018 implemented EU Regulation 1008/2008 into the UK domestic regulatory environment. One of the main changes include the lifting of majority nationality-based ownership and control requirements for the issue of a UK Operating Licence which entails a substantial liberalisation for investment in the sector. THE OECD SERVICES TRADE RESTRICTIVENESS INDEX: POLICY TRENDS UP TO 2022 © OECD 2022


| 35 The Maritime Transport Access to Trade and Cabotage (Revocation) (EU Exit) Regulations 2019 revoked prior EU legislation that limited cabotage traffic only to EU vessels. Cabotage operations for foreign vessels are now permitted in certain circumstances under an "Open Coast" policy that applies to all nations. On 29 April 2021, a new Financial Services Act 2021 was adopted which introduces several changes to the UK’s regulatory framework. For instance, it changes some aspects of the UK’s prudential regulatory regime, and implements the Basel III standards. As of January 2021, the UK abolished the Low Value Consignment Relief, which relieved import VAT on consignments of goods valued at GBP 15. All imported goods up to GBP 135 will now be subjected to domestic VATs. The threshold for relief from customs duty continues to be GBP 135. The UK adopted a new National Security and Investment Act (NSIA) 2021 that will enter into force in 2022. The Act establishes new procedures for the screening of investments for the purposes of protecting national security. United States As of February 2021, requirements for H-1B visas for entry-level computer programmers have been eased by allowing applicants to qualify for a position in a specialty occupation as required for H-1B visas. The Foreign Investment Risk Review Modernization Act of 2018 expands the jurisdiction of Committee on Foreign Investment in the United States (CFIUS) and brings amendments to CFIUS’s processes, including a new declarations procedure. Since 2016, foreign attorneys can obtain a temporary authorisation to practice law in New York. As of July 2016, foreign banks with USD 50 billion or more in US assets must form a US intermediate holding company (IHC) to act as the parent company of all of the foreign bank’s US subsidiaries. Also in 2016, the threshold for de minimis regime on customs duties for imported merchandise was raised to USD 800. Viet Nam A new Investment Law was introduced in 2020 which introduced a negative list approach for market access, and eased some of the conditions on foreign investment that have applied since 2014. Particularly, it removed some services activities from the negative list (e.g. certain logistics activities) bringing about broader trade liberalisation. Nonetheless, services sectors that continue to be on the list remain subject to several administrative hurdles (e.g. the requirement to obtain high-level approvals for certain types of investments). Additionally, foreign investments can be rejected on grounds of national defence or security which are not specifically defined in the Investment Law. As of 1 January 2021, the amended Enterprise Law (Law No. 59/2020/QH14) simplifies conditions related to the establishment and operation of corporations in Viet Nam. As of 2020, it is no longer required that a Vietnamese national be the legal representative of an airline; however, such representatives must reside in the country.

THE OECD SERVICES TRADE RESTRICTIVENESS INDEX: POLICY TRENDS UP TO 2022 © OECD 2022


36 |

Annex B. STRI indices by sector The digital network The digital supply chain consists of content such as audio-visual services, design and other knowledgecapturing products, as well as digital rights management and content delivery. Telecommunications and broadcasting provide the networks over which content is delivered, and computer and information services offer a host of services including information storage and processing, network management systems and over-the-top (OTT) services complementing and sometimes competing with telecommunications and broadcasting services. Below are short descriptions of the five sectors that fall within the category of digital networks. Telecommunication services are comprised of wired and wireless telecommunications activities (ISIC Rev 4, code 61). They enable global value and facilitates the efficient provision of computer services, audio visual services, professional services among others. Computer services are defined as computer programming, consultancy and related activities and information service activities (ISIC Rev 4 ,code 62 and 63). A high quality of communication infrastructure allows for prominent supply of services across borders, though it is still dependent on complementary technical expertise for installation, use and maintenance which require computer engineers and other technical experts to travel. Television and broadcasting services include television programming and broadcasting activities (ISIC Rev 4, code 591 and 601). Television services are increasingly bundled with telecommunications services by telecommunications operators and in some cases broadcasters have become telecommunications operators. More recently, video on demand (VOD) has become an increasingly important distribution method for audio-visual content and there are a host of suppliers offering streaming and downloading over the Internet. Motion pictures services are defined as motion picture, video and television programme production, postproduction and distribution activities (ISIC Rev 4, code 591). The sector has benefitted from rapid digitalisation and technological developments that facilitate the streaming of media content over the Internet. Sound recording services cover sound recording and music publishing activities (ISIC Rev 4, code 592). The sector has been subject to rapid digitisation with music streaming becoming an important basis for monetising the migration of physical records to digital platforms.

THE OECD SERVICES TRADE RESTRICTIVENESS INDEX: POLICY TRENDS UP TO 2022 © OECD 2022


| 37 The transport and distribution supply chain Transport and logistics services are not only extensively traded in their own right but are also intermediate services at the core of global value chains and just-in-time inventory management, with the related demand for door-to-door services. The importance of transport and logistics services have increased in the context of efforts to address the COVID-19 pandemic. Distribution services, including online retail sales, are essential for bringing goods from the producer to the consumer, for job creation and for demand-driven economic growth. Below are short descriptions of the ten sectors that fall within the category of transport and distribution supply chain. Air transport services are defined as passenger and freight air transport (ISIC Rev 4, code 51), carried domestically or internationally. This sector covers commercial establishment only. Air transport services are traded in their own right and are an intermediate service for other kinds of trade. Air cargo transport is also a key determinant for meeting demand for time sensitive products and often represents the only viable means of transport to remote, peripheral regions and landlocked countries. Maritime freight transport services covers sea shipping and related port activities (ISIC Rev 4, code 5012), but excludes maritime passenger transport and transport on internal waterways. Rail freight transport services includes rail infrastructure management and operation of freight services (ISIC Rev 4, code 4912). Rail transport services are traded and part of a network that provide intermediate services essential to global value chains and just-in-time inventory management. Road freight transport services is defined as freight transport by road (ISIC Rev 4, code 4923). The STRI for this sector covers commercial establishment only. Cross-border trade is governed by a system of bilateral and plurilateral agreements which provide for permits, quotas and other regulations. Courier services is defined under ISIC Rev 4 code 53 as postal and courier activities. Though traditionally mailed letters declined, the rise of e-commerce increases the demand for parcels and express deliveries. Consequently, timely, precise, and reliable delivery services become critical. Distribution services covers general wholesale and retail sales of consumer goods (ISIC Rev 4, codes 46 and 47), though specific regulation of speciality distribution sectors such as pharmaceuticals and motor vehicles are not considered. The STRI in this sector also covers regulations relating to electronic commerce, given the increasing prevalence of multi-channel retail services as a form of distribution services. Logistics services in the STRI are defined as cargo-handling services (ISIC Rev 4, code 5224), storage and warehousing services (including customs warehouse services) (ISIC Rev 4, code 521), freight forward services and customs brokerage services (ISIC Rev 4, code 522). Since the regulatory framework for these four sub-sectors can be different in many countries, separate indices are developed for each of them.

Market bridging and supporting services Economic activity in general and international transactions in particular rely heavily on access to credit, payment systems and insurance. A legal framework supporting the enforcement of contracts is one of the most important pillars of a market economy in which strangers can do business with each other. Trustworthy, transparent and easy to understand accounting information and services further strengthen business structures and enable better regulatory compliance. Below are short descriptions of the four sectors that fall within the category of market bridging and support services. Commercial banking services are defined as deposit-taking, lending and payment services (ISIC Rev 4, code 64). Commercial banking services are traded business to business, as well as business to consumer

THE OECD SERVICES TRADE RESTRICTIVENESS INDEX: POLICY TRENDS UP TO 2022 © OECD 2022


38 | for retail banking. Efficient banking services are one of the backbones of dynamic economies; they provide financing for investment and trade across productive activities, underlying all value chains. Insurance services (ISIC Rev 4, code 651 and 652) comprise of life insurance, property and casualty insurance, reinsurance and auxiliary services. Private health insurance and private pensions are not covered. Efficient insurance services enable dynamic economies, providing firms with risk management tools and channelling savings towards long-term investment. Legal services (ISIC Rev 4, code 691) cover advisory and representation services in domestic and international law. International law includes advisory services in home country law, third country law, international law, as well as a right to appear in international commercial arbitration. Domestic law extends to advising and representing clients before a court or judicial body in the law of the host country. Accounting services are comprised of accounting, auditing and book-keeping services (ISIC Rev 4, code 692). The international market for these services is dominated by a handful of corporations characterised by a high degree of concentration, organised as a network, and generally owned and managed independently with presence in a large number of countries. Physical infrastructure services Physical infrastructure services include construction, architecture and engineering services. Construction services have historically been considered strategic for providing the infrastructure for other industries, as well as due to its close links to public works and the allocation of fiscal resources. Architects undertake the design of buildings, whereas engineers participate in the construction of key infrastructure such as buildings, roads and bridges. Often engineering and architectural activities are combined in projects offered by one company, and are sometimes subsumed in the construction sector. Below are short descriptions of the three sectors that fall within the category of physical infrastructure services. Construction services covers construction of buildings (residential and non-residential) as well as construction work for civil engineering (ISIC Rev 4 codes 41, 42 and 43). Construction services have historically played an important role in the functioning of economies, providing the infrastructure for other industries. These services account for a significant share of gross domestic product (GDP) and employment in most countries. Public works, such as roads and public buildings, account for about half of the market for construction services. Therefore, the STRI for construction services covers detailed information on public procurement procedures. Architectural services also includes related technical consultancy (ISIC Rev 4, code 71). This sector has a key role in building design and urban planning. The definition of engineering services (ISIC Rev 4, code 71) covers several related activities, such as engineering and integrated engineering services, and engineering related scientific and technical consulting services. These provide essential inputs for the economy and play a significant role in the development of production processes and the adoption of new technologies.

THE OECD SERVICES TRADE RESTRICTIVENESS INDEX: POLICY TRENDS UP TO 2022 © OECD 2022


| 39

The Digital Network Figure B.1. Telecommunication services, 2021 0

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0.5

GBR DEU ESP PRT SVK NLD AUT FRA DNK IRL LTU POL SWE CZE USA LUX EST ITA LVA FIN SVN PER COL GRC HUN BEL NZL AUS CRI MEX CHE CHL JPN NOR TUR BRA SGP CAN ZAF ISL ISR KOR IND THA MYS RUS KAZ CHN IDN VNM

0.6

Figure B.2. Computer services, 2021 0.7

0

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0.2

0.3

0.4

0.5

0.6

JPN KOR CZE CHL GBR SVK FRA DEU USA NLD PRT LVA CAN COL ESP LUX EST AUS CRI IRL LTU NZL ZAF DNK AUT POL SGP PER SWE VNM IND SVN FIN HUN MEX GRC ITA MYS CHE BEL CHN ISR NOR BRA TUR KAZ IDN THA RUS ISL Restrictions on foreign entry Barriers to competition

Restrictions to the movement of people Regulatory transparency

Other discriminatory measures Average STRI 2014

Source: OECD STRI database (http://oe.cd/stri-db).

THE OECD SERVICES TRADE RESTRICTIVENESS INDEX: POLICY TRENDS UP TO 2022 © OECD 2022

0.7


40 | Figure B.3. Television and broadcasting, 2021 0

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LUX NLD PRT CZE GBR DEU IRL LTU DNK NZL SVK ESP AUS SWE EST FRA CRI BEL HUN JPN USA LVA SVN FIN NOR CHL GRC ITA CAN VNM ISR KOR AUT MYS SGP CHE IND THA ISL ZAF POL IDN KAZ RUS TUR BRA PER COL MEX CHN

0.6

Figure B.4. Motion picture services, 2021 0.7

0

0.1

0.2

0.3

0.4

0.5

0.6

0.7

JPN CZE PRT USA KOR SVK NLD LUX CRI DEU IRL ESP LVA AUS DNK CHL LTU GBR NZL ZAF EST SWE CAN COL GRC FRA SVN AUT ISR MYS POL PER FIN HUN BEL NOR SGP ITA MEX IND TUR CHE KAZ VNM THA IDN RUS ISL BRA CHN Limitations on foreign entry Barriers to competition

Limitations to the movement of people Regulatory transparency

Other discriminatory measures Average STRI 2014

Source: OECD STRI database (http://oe.cd/stri-db).

THE OECD SERVICES TRADE RESTRICTIVENESS INDEX: POLICY TRENDS UP TO 2022 © OECD 2022


| 41 Figure B.5. Sound recording services, 2021 0

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0.5

0.6

0.7

JPN KOR CZE DEU LVA NLD PRT SVK GBR LTU AUS ESP USA COL CAN FRA CRI SWE CHL MYS NZL LUX IRL EST POL ZAF VNM SVN FIN MEX DNK IDN SGP PER HUN IND GRC AUT BRA CHE NOR ISR KAZ TUR BEL ITA RUS THA ISL CHN Limitations on foreign entry Barriers to competition

Limitations to the movement of people Regulatory transparency

Other discriminatory measures Average STRI 2014

Source: OECD STRI database (http://oe.cd/stri-db).

THE OECD SERVICES TRADE RESTRICTIVENESS INDEX: POLICY TRENDS UP TO 2022 © OECD 2022


42 |

The Transport and Distribution Supply Chain Figure B.6. Air transport services, 2021 0

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Figure B.7. Maritime freight transport services, 2021 0.6

CHL GBR COL CRI BRA AUS PER FRA NZL DEU MEX AUT JPN CAN DNK IRL NLD EST ESP CZE SVN LTU CHN PRT ITA SWE LVA GRC HUN LUX ISR SVK SGP CHE FIN POL ZAF BEL KAZ KOR VNM MYS ISL USA IND IDN NOR RUS TUR THA

0.7

0

0.1

0.2

0.3

0.4

0.5

0.6

0.7

GBR NLD LVA PRT DEU JPN CAN FRA IRL CHL ESP AUS LTU POL COL NZL DNK NOR CRI BEL ZAF MEX ITA FIN SGP TUR CHN EST KOR MYS ISR SWE PER SVN GRC ISL IND BRA USA VNM KAZ THA RUS Restrictions on foreign entry Barriers to competition

Restrictions to the movement of people Regulatory transparency

Other discriminatory measures Average STRI 2014

Source: OECD STRI database (http://oe.cd/stri-db).

THE OECD SERVICES TRADE RESTRICTIVENESS INDEX: POLICY TRENDS UP TO 2022 © OECD 2022


| 43 Figure B.8. Rail freight transport services, 2021 0

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0.8

0.9

Figure B.9. Road freight transport services, 2021 1

0

0.1

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0.6

JPN CHL LUX CZE NLD LVA AUS PRT GBR SVK FRA CAN COL DEU KOR LTU ZAF USA EST NZL SGP ESP IRL AUT ISR CHN POL SVN DNK SWE BEL PER ITA HUN GRC CHE FIN IND NOR TUR KAZ VNM BRA RUS MYS CRI ISL THA IDN MEX

NLD USA PRT JPN GBR CZE AUS CAN COL DEU LUX IRL SVK DNK FRA AUT LTU GRC ESP CHL NZL ITA LVA PER CHN EST HUN POL SVN BEL SWE CHE TUR FIN NOR BRA CRI ZAF MEX MYS VNM IDN RUS IND ISR KAZ KOR THA Restrictions on foreign entry Barriers to competition

Restrictions to the movement of people Regulatory transparency

Other discriminatory measures Average STRI 2014

Source: OECD STRI database (http://oe.cd/stri-db).

THE OECD SERVICES TRADE RESTRICTIVENESS INDEX: POLICY TRENDS UP TO 2022 © OECD 2022

0.7


44 | Figure B.10. Courier services, 2021 0

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NLD FRA CZE DEU PRT CRI LTU LUX SVK LVA AUT GBR IRL ESP SVN EST DNK NZL SGP COL HUN SWE GRC FIN ITA JPN POL PER BEL MYS VNM NOR KAZ ISL USA CAN KOR AUS CHE RUS THA ISR MEX IDN ZAF CHL TUR IND BRA CHN

Figure B.11. Distribution services, 2021 0.8

0.9

1

0

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0.2

0.3

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0.7

JPN CHL GBR CZE COL SVK LVA NLD AUS DEU USA LTU ESP NZL PRT EST CRI ISR DNK KOR PER IRL CHN SVN ITA AUT LUX FRA TUR HUN MEX POL ZAF CHE SGP SWE CAN FIN BRA BEL GRC NOR RUS VNM ISL MYS THA KAZ IND IDN Restrictions on foreign entry Barriers to competition

Restrictions to the movement of people Regulatory transparency

Other discriminatory measures Average STRI 2014

Source: OECD STRI database (http://oe.cd/stri-db).

THE OECD SERVICES TRADE RESTRICTIVENESS INDEX: POLICY TRENDS UP TO 2022 © OECD 2022


| 45 Figure B.12. Logistics cargo-handling services, 2021 0

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0.8

CZE SVK PRT DNK LTU LUX DEU LVA GBR NLD KOR ESP FRA EST JPN AUT IRL GRC CHL POL AUS CAN CHE HUN USA BEL NOR FIN SWE SVN ITA ISR COL NZL MYS CHN CRI SGP MEX PER IND ZAF ISL BRA TUR KAZ VNM IDN THA RUS

0.9

Figure B.13. Logistics storage and warehouse services, 2021

1

0

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0.9

CZE KOR JPN PRT LVA NLD EST LTU DEU SVK GBR CAN CHL ESP AUS FRA DNK LUX IRL COL USA ISR SWE GRC POL NOR CHE NZL BEL AUT MYS HUN CHN SVN FIN ITA CRI ZAF MEX VNM SGP PER TUR KAZ BRA IND ISL IDN THA RUS Restrictions on foreign entry Barriers to competition

Restrictions to the movement of people Regulatory transparency

Other discriminatory measures Average STRI 2014

Source: OECD STRI database (http://oe.cd/stri-db).

THE OECD SERVICES TRADE RESTRICTIVENESS INDEX: POLICY TRENDS UP TO 2022 © OECD 2022

1


46 | Figure B.14. Logistics freight forwarding services, 2021 0

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CZE NLD FRA GBR DEU PRT LVA SVK DNK CAN LUX KOR JPN CHL IRL EST ESP LTU POL AUS NZL SWE CHN HUN AUT SVN ITA USA FIN GRC COL BEL NOR CHE ISR SGP CRI VNM MYS IND ZAF BRA MEX PER TUR KAZ RUS ISL IDN THA

0.6

Figure B.15. Logistics customs brokerage services, 2021

0.7

0

0.1

0.2

0.3

0.4

0.5

0.6

0.7

0.8

0.9

1

CZE JPN NLD DEU FRA GBR LUX LVA SVK PRT EST LTU ESP DNK KOR IRL AUS NZL POL AUT CAN CHN FIN HUN SWE SVN GRC USA COL ITA CHE BEL CHL SGP NOR ISR CRI VNM MYS ZAF BRA IND PER TUR KAZ IDN RUS ISL THA MEX Restrictions on foreign entry Barriers to competition

Restrictions to the movement of people Regulatory transparency

Other discriminatory measures Average STRI 2014

Source: OECD STRI database (http://oe.cd/stri-db).

THE OECD SERVICES TRADE RESTRICTIVENESS INDEX: POLICY TRENDS UP TO 2022 © OECD 2022


| 47

Market Bridging and Supporting Services Figure B.16. Commercial banking services, 2021 0

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Figure B.17. Insurance services, 2021 0

0.7

0.1

0.2

0.3

0.4

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0.6

KOR CZE FRA NLD IRL SVK DEU LTU LVA GBR NZL JPN EST CHL SVN DNK LUX ESP CRI AUS ZAF POL PRT HUN TUR BEL CAN COL PER SGP AUT SWE CHE FIN MEX ISR ITA GRC MYS USA KAZ NOR ISL CHN RUS BRA VNM IDN IND THA

CZE ESP SVK IRL LVA GBR DEU CRI NLD FRA LTU EST LUX DNK PRT CAN KOR JPN AUS AUT CHL USA SVN PER POL SWE ITA MYS NZL FIN GRC HUN BEL ISR SGP COL CHE TUR NOR ZAF ISL CHN KAZ MEX VNM BRA RUS THA IND IDN Restrictions on foreign entry Barriers to competition

Restrictions to the movement of people Regulatory transparency

Other discriminatory measures Average STRI 2014

Source: OECD STRI database (http://oe.cd/stri-db).

THE OECD SERVICES TRADE RESTRICTIVENESS INDEX: POLICY TRENDS UP TO 2022 © OECD 2022

0.7


48 | Figure B.18. Legal services, 2021 0

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0.2

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0.4

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Figure B.19. Accounting and auditing services, 2021 0.7

CRI AUS COL CHL LVA FIN SWE CAN PER GBR USA NZL IRL NLD MEX KAZ DEU RUS CZE BEL ITA DNK ESP NOR SVK ZAF SGP BRA ISR CHE PRT ISL AUT LTU EST KOR CHN GRC JPN SVN TUR FRA VNM THA MYS HUN IND IDN POL LUX

0.8

0.9

1

0

0.1

0.2

0.3

0.4

0.5

0.6

0.7

0.8

0.9

1

CHL CZE SVK LVA USA COL NLD LTU JPN DEU LUX AUS IRL PER NZL FIN SGP CAN HUN MEX DNK VNM ZAF MYS GBR ESP AUT KAZ POL CHE EST SWE NOR SVN ISR BRA RUS CRI ISL PRT GRC BEL FRA ITA TUR IDN CHN IND THA KOR Restrictions on foreign entry Barriers to competition

Restrictions to the movement of people Regulatory transparency

Other discriminatory measures Average STRI 2014

Source: OECD STRI database (http://oe.cd/stri-db).

THE OECD SERVICES TRADE RESTRICTIVENESS INDEX: POLICY TRENDS UP TO 2022 © OECD 2022


| 49

Physical Infrastructures Services Figure B.20. Construction services, 2021 0

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Figure B.21. Architecture services, 2021 0.6

0

0.7

0.1

0.2

0.3

0.4

0.5

0.6

0.7

JPN CHL LVA CZE COL NLD DNK CHN ESP AUS SWE DEU LTU LUX PER NZL FIN CRI IRL GBR KOR USA CAN NOR ZAF VNM CHE AUT GRC SGP ISR TUR HUN BRA MEX KAZ IDN BEL MYS RUS FRA ISL PRT EST SVN POL ITA SVK THA IND

JPN FRA NLD CZE CHL GBR DEU IRL KOR LVA LUX NZL LTU AUT CRI PRT AUS SVK DNK ESP PER FIN CAN COL EST ZAF SWE SGP CHN USA HUN POL SVN BEL CHE MEX TUR GRC VNM NOR MYS ITA IND ISR BRA RUS KAZ THA IDN ISL Restrictions on foreign entry Barriers to competition

Restrictions to the movement of people Regulatory transparency

Other discriminatory measures Average STRI 2014

Source: OECD STRI database (http://oe.cd/stri-db).

THE OECD SERVICES TRADE RESTRICTIVENESS INDEX: POLICY TRENDS UP TO 2022 © OECD 2022


50 | Figure B.22. Engineering services, 2021 0

0.1

0.2

0.3

0.4

0.5

0.6

JPN FRA LVA CHL NLD CZE COL CHN GBR LTU DNK IRL ESP CAN SWE CRI LUX DEU EST NZL FIN PER USA NOR VNM BEL ZAF TUR CHE IND GRC AUT ISR AUT ISR HUN MEX BRA SGP KAZ MYS IDN RUS ISL THA PRT POL SVN ITA SVK Restrictions on foreign entry Barriers to competition

Restrictions to the movement of people Regulatory transparency

Other discriminatory measures Average STRI 2014

Source: OECD STRI database (http://oe.cd/stri-db).

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| 51

Annex C. Digital STRI by country Figure C.1. Digital STRI by country, 2021 0

0.1

0.2

0.3

0.4

0.5

0.6

0.7

CAN DOM CRI ECU AUS GBR USA CHE NOR MEX JPN LUX EST ALB UNK MNE MKD LTU NLD DNK GTM SWE PRT ESP DEU FIN FRA ITA VUT MYS NZL SVK IRL UGA HKG KOR BEL NPL CMR CZE HUN ISR SRB KEN GRC AUT BRA LVA PAK BRN MDG BOL PER SVN TUR CHL ISL COL THA POL URY IND IDN ARG ZAF BIH KHM SAU RUS ZMB LAO CHN ZWE KAZ Infrastucture Intelectual property rights

Electronic transations Other

Payment systems Average

Source: OECD Digital STRI database (http://oe.cd/stri-db).

THE OECD SERVICES TRADE RESTRICTIVENESS INDEX: POLICY TRENDS UP TO 2022 © OECD 2022

STRI 2014


OECD Services Trade Restrictiveness Index: Policy Trends up to 2022