OECD Services Trade Restrictiveness Index: Policy Trends up to 2023

This report highlights the key outcomes of the 2022 OECD Services Trade Restrictiveness Index (STRI). The OECD’s quantification of services regimes across countries and over time seeks to inform the decisions of policy makers and regulators, to convey transparent and accessible information to exporters, and to provide a source of data for academic research on drivers and impediments to services trade.

Main findings

• In 2022, the global regulatory environment for services trade was dynamic with an increase in the volume of regulatory changes compared to 2021, reflecting countries’ efforts to address various global economic challenges. The OECD’s annual monitoring of services trade restrictions shows substantial services liberalisation efforts occurred in 2022, underpinned by government actions to improve business operations in domestic markets, to advance regulatory transparency, and to ease the remaining hurdles on business travel following the COVID-19 pandemic.

• These positive changes were counterbalanced, however, by new services trade barriers introduced in 2022, including limitations on foreign companies to provide services locally, on the movement of people, and on foreign direct investment.

• The average level of restrictions in non-OECD countries across the 22 sectors was 1.5 times higher than in OECD countries in 2022, indicating continued regulatory fragmentation and uneven conditions for services market access.

• On average, Japan, the United Kingdom and the Netherlands displayed the lowest regulatory barriers to services trade across sectors in 2022 Economies with the highest trade liberalisation impact on the STRI in 2022 were Viet Nam, Japan, and Kazakhstan

• Domestic regulations related to obtaining licences and authorisations play a critical role in fostering the supply of services. The STRI provides granular insight into the application of services domestic regulations across countries. It shows that licenses or authorisations to supply services are commonly regulated across countries in most sectors. Financial services, for example, a sector where all countries have licencing requirements, shows a high degree of regulatory alignment with best practices identified in the Reference Paper on Services Domestic Regulation adopted at the WTO in 2021

• An OECD and WTO joint analysis in 2021 identified potential annual trade costs savings in the range of USD 150 billion if the services domestic regulation disciplines were fully implemented across all sectors Leveraging promising avenues for lowering business costs will be a key factor in the near term as global economic uncertainty continues and higher costs related to inflationary pressures are passed on through the prices of goods and services.

• Open and well-regulated service markets are essential to facilitate economic recovery, to strengthen resilience to future shocks, and to promote a more sustainable trading system. To ensure that the benefits of open markets and a rules-based international trading system are preserved, policy makers should focus on minimising barriers that increase trade costs for services providers, that weaken the gains from digital transformation, and that undermine competitiveness.