In the first half of 2023, the volume of global trade in goods and services grew by 0.1% at an annualised rate, with growth in services counterbalancing decreased merchandise trade volumes (OECD, 2023[1]). Indeed, global services trade grew 7% year-on-year in the second quarter of 2023, but remains subpar compared to the second quarter of 2022 when services trade was up 19% year-on-year (WTO, 2023[2]). Key drivers of growth include travel services, commercial services, and goods-related services.
In this context, the latest OECD Services Trade Restrictiveness Index (STRI) shows that barriers to services trade continue to be high across countries and sectors, influenced by global economic and geopolitical challenges. This was compounded by the introduction of new policies in 2023 affecting the supply of services through commercial presence and foreign investment. Several countries introduced new foreign investment screening mechanisms or revised existing ones, establishing tighter scrutiny of investment in sectors such as computer services, telecommunications, broadcasting, transport, and commercial banking. Moreover, the tightening of rules on cross-border data flows (e.g. in Viet Nam) and introduction of entry limits for foreign e-commerce platforms (e.g. in Indonesia) added to the challenges faced by services providers, especially in ICT services sectors. Other more targeted tightening policies were identified in some sectors such as transport and telecommunications services.
Nonetheless, compared to 2022, the overall number of policy reforms identified in 2023 was fewer across all services sectors indicating a slowdown in regulatory activity. Moreover, changes in the index values show a slightly higher impact of trade liberalisation policies overall, suggesting moderate advancement on services reform policies (Figure 1).
Liberalisation policies in 2023 included policies that affect trade in many services such as the removal of remaining travel restrictions imposed during the COVID-19 pandemic. Other examples are more sector specific affecting for instance financial services (e.g. easing conditions for foreigners to buy shares in local banks in Brazil), professional services (e.g. facilitating market access to foreign lawyers in India), digitally enabled services (e.g. amending rules on data protection in Korea and enacting a new Digital Personal Data Protection Act in India) and the reduction of government involvement in key enterprises in some countries (e.g. Israel, Lithuania and the United Kingdom). In particular, physical infrastructure services (architecture, construction and engineering) benefitted from liberalising policy changes due to the relative importance of business travel for trade in these sectors, as well as the easing of conditions for the movement of architecture and engineering professionals in some countries (e.g. in Canada and China, among others).
Despite signs of moderate liberalisation in 2023, continued national and multilateral action is needed to address the steady build-up of restrictions observed in previous years. Annex A provides a chronological overview of services trade policy changes adopted in each country in the STRI sample between 2014 and 2023.
