SERVICES TRADE LIBERALISATION IN THE EU SINGLE MARKET Sebastian - - PowerPoint PPT Presentation

SERVICES TRADE LIBERALISATION IN THE EU SINGLE MARKET

Sebastian Benz Conference on “The Economic Impacts of Brexit in Europe” Brussels, February 22, 2019

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High economic importance of services

10 20 30 40 50 60 70 80 90 1991 1996 2001 2006 2011 2016

Employment in services

World OECD members United Kingdom

100 200 300 400 500 600 1000 2000 3000 4000 5000 6000 1991 1996 2001 2006 2011 2016

Services exports in bio. USD

World (left scale) OECD members (left scale) United Kingdom (right scale)

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High economic importance of services

100 200 300 400 500 600 1000 2000 3000 4000 5000 6000 1991 1996 2001 2006 2011 2016

Services exports in bio. USD

World (left scale) OECD members (left scale) United Kingdom (right scale)

United Kingdom 2016:

• Services exports: 330 bio. USD

(cross-border only)

• Goods exports: 400 bio. USD
• 34% services value added in

manufacturing exports

• Mode 3 services exports: 670 bio.

USD

• Database of services trade restrictions
• 45 economies, 22 sectors, 5 years:

– 36 OECD Members, Colombia, Costa Rica, Brazil, China (PRC), India, Indonesia, Malaysia, South Africa, Russia

• Standardised set of measures: between 61 (computer services)

and 143 (insurance) per sector: 88000 observations per year

• Five policy areas:

1. Restrictions on foreign entry 2. Restrictions to the movement of people 3. Other discriminatory measures 4. Barriers to competition 5. Regulatory transparency

OECD Services Trade Restrictiveness Index (STRI)

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Digital Network

Computer Telecoms Audiovisual

Supply Chain

Transport Logistics Distribution

Trade and Finance Support

Legal Accounting Financial

Physical Infrastructure

Architecture Engineering Construction

STRI sectoral coverage

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STRI is a composite index

• Takes values between 0 (open) and 1 (closed)
• Codified algorithm applied to the information in the

regulatory database

– Binary scores – Break complex or continuous measures into several thresholds – Nested layers/hierarchies of measures – Regulatory packages when measures are complementary – Memos: included in database but no score attached

• STRI annual updates: Monitoring trade policy and

providing annual data for research and analysis

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• Traditionally: data collected on most favored

nation (MFN) basis

– Rules applying to WTO members – No information on bilateral trade restrictiveness

• January 2019: new intra-EEA STRI

– Services trade barriers within EU Single Market – Coverage of EU law and national legislation – Different levels of restrictiveness across EEA member countries

STRI methodology

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Importance of EU legislation

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0.1 0.2 0.3 0.4 0.5 0.6 0.7 0.8 0.9 1 EU measures National measures

Intra-EEA STRI sector profiles 2018

0.05 0.1 0.15 0.2 0.25 0.3 0.35 0.4 0.45 0.5

0.05 0.1 0.15 0.2 0.25 0.3 0.35 0.4 0.45 0.5 Minimum Maximum Average EEA MFN Average

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Air transport

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0.1 0.2 0.3 0.4 0.5 Third Countries Single Market Restrictions on foreign entry Restrictions to the movement of people Other discriminatory measures Barriers to competition Regulatory transparency

Legal services

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0.1 0.2 0.3 0.4 0.5 Third Countries Single Market Restrictions on foreign entry Restrictions to the movement of people Other discriminatory measures Barriers to competition Regulatory transparency

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Commercial banking

0.1 0.2 0.3 0.4 0.5 Third Countries Single Market Restrictions on foreign entry Restrictions to the movement of people Other discriminatory measures Barriers to competition Regulatory transparency

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Road freight transport

0.1 0.2 0.3 0.4 0.5 Third Countries Single Market Restrictions on foreign entry Restrictions to the movement of people Other discriminatory measures Barriers to competition Regulatory transparency

• Single Market achievements:

– Internal restrictions vs. third country restrictions: differ by a factor of four on average – Largest absolute difference in legal services, air transport and accounting; smallest in distribution

• BUT: Services trade barriers remain in all sectors
• Regulatory harmonisation within Single Market:

– Regulatory heterogeneity drops by factor of four. – Harmonisation most advanced in road freight transport and air transport

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Findings

Access all of the information from the Trade & Agriculture Directorate at: www.oecd.org/tad You can reach us via e-mail by sending your message to the following address: tad.contact@oecd.org We invite you to connect with us on Twitter by following: @OECDtrade

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