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May 7, 2014 3:39 pm
Countries around the world need to lower barriers to the global trade in services, the OECD said on Wednesday as it released a new index highlighting the significant obstacles still in place, particularly in emerging economies.
At $4.6tn in 2013, global trade in services is still dwarfed by the $18.8tn trade in goods around the world. But commerce in sectors ranging from accounting and banking to telecommunications and transport has been growing more rapidly than that in goods in recent years and it is increasingly the focus of liberalisation efforts. According to the OECD, services now account for more than two-thirds of global gross domestic product
However, as it released a new “services trade restrictiveness index”, the OECD said on Wednesday that for that growth to continue and accelerate many barriers still needed to come down.
Across all 40 countries covered by the index, the trade in air transport as well as accounting and legal services remained “highly restricted”, the Paris-based organisation said. Limits on foreign ownership, national licensing requirements and barriers to the movement of labour also contributed to holding back the trade in services, the OECD added.
But the index also highlighted the disparity between the OECD’s 34 member countries and the six emerging economies included in the study, with many of the latter having more barriers in place. China, India, and Indonesia featured at the top of the list of countries with high obstacles in place in service sectors ranging from insurance to motion pictures and telecommunications.
The disparity between rich and emerging economies comes at an interesting time in world trade. The US is leading efforts by two dozen countries to draft a new Trade in Services Agreement which would update the 20-year-old rules governing the global commerce in services. Washington has also been sceptical of China’s desire to join these negotiations, questioning whether Beijing can live up to the US’s mooted “high ambitions” for the deal.
Michael Froman, the US trade representative, said on Wednesday that the US was still examining China’s bid to join the services discussions. But he said Washington still had concerns over China’s role in blocking progress in negotiations over liberalising the international trade in high-tech goods and a number of other areas.
That view was echoed by Ed Fast, the trade minister for Canada, another country involved in the services negotiations.
“We want a level of ambition that has a very real prospect of allowing [the trade in] services to [stimulate] growth in the global economy,” he told reporters. “Anyone who can satisfy us as to that level of ambition is welcome to join the negotiations.”
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