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Economy

OECD calls for improved services trade to stimulate global economic growth

June 09, 2017


Abstract : Paris-based Organization for Economic and Cooperation Development (OECD) on Thursday recommended reform mainly to remove restrictions on services businesses in a way to stimulate economic growth.

OECD

 

PARIS, June 8 (Xinhua)-- Paris-based Organization for Economic and Cooperation Development (OECD) on Thursday recommended reform mainly to remove restrictions on services businesses in a way to stimulate economic growth.

"Open and well-regulated service markets are the gateway to global value chains. Services trade policy reform can boost SMEs, reduce trade costs, strengthen the digital economy and help make globalization work for all," said OECD Secretary-General Angel Gurría.

In its new report on services trade policies and the global economy, the think-tank found that moves to ameliorate services trade policy could help countries boost their economic growth, reinforce global value chains and offer important benefits from consumers worldwide.

With that aim and in a context of an increasingly digital global economy, the OECD noted that reforms should focus on "promoting access to the information, skills, technology, funding and market."

According to the OECD Services Trade Restrictiveness Index (STRI), "the costs of services trade and investment barriers remain high, largely exceeding the average tariff on traded goods."

It cited transport sector, logistics and construction sectors where prices are estimated to be about 20 percent higher on average than they would be in the absence of restrictions, and by 80 percent in some countries, a fact that forces manufacturers and consumers to pay additional costs.

The report also noted that red tape across services markets also creates additional expenditures for exporters seeking business in multiple markets.

Launched in 2014, the STRI studies services trade barriers in 22 sectors across 44 countries, representing over 80 percent of global services trade.

"All countries covered have sectors and policy areas where there is scope for reform, and all countries have areas of good performance that could be a model for others," the OECD said.

It recommended continued efforts to adopt strategic reforms on trade, investment and competition policies to facilitate trade in services, resolve difficulties relating to transportation and logistics services to trim trade costs, in addition to limit restrictions on foreign entry and barriers to the movement of professionals.

Figures from the OECD report showed that services account more than two-thirds of global GDP, half of the value added in gross sales abroad and over 30 percent of the value added in exports of manufacturing goods.

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Keyword: global-economy OECD

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