Services trade can significantly contribute to job creation and to improving existing job conditions by enhancing productivity, fostering innovation, and providing access to new markets. As services become more tradable, businesses can expand their reach, leading to increased demand for skilled labour. Indeed, employment in services and industries where services exports are prominent has become an increasing driver of new employment, outpacing employment in other sectors (Figure 1.3). Moreover, close to three out of four workers today are employed in services in OECD countries, demonstrating the importance of services policies for employment. In turn, growing services exports are linked to the reduced risk of job losses and better wages, with benefits in particular for women (Lassmann, 2020[7]). Additionally, the global reach of services trade encourages competitive practices which can lead to improved labour standards and working conditions.
Moreover, services imports play a crucial role in empowering domestic small and medium sized enterprises (SMEs) to expand their international trade activities. By accessing high-quality and specialized services from abroad, SMEs can enhance their operational efficiency, innovate, and remain competitive in the global market. Services such as logistics, financial services, legal expertise, and information technology support are vital for SMEs to navigate complex international trade regulations, manage supply chains, and engage in e-commerce. Additionally, importing services allows SMEs to benefit from advanced technologies and practices, fostering their growth and enabling them to compete with larger, more established firms on an international scale. This access to global services infrastructure not only reduces operational costs but also opens new avenues for market expansion and customer outreach, thereby driving economic growth and job creation domestically.
As the importance of services became clearer, international efforts to improve the availability of data and the evidence on the impact of services and services trade policies has grown over the years. A major milestone was reached in May 2014 when the OECD Services Trade Restrictiveness Index (STRI) regulatory database and indices were released under the purview of the OECD Trade Committee. The STRI has since become a global reference in understanding the complexities of services trade barriers across most major sectors and countries. The database and indices have enabled new analytical work that has helped to quantify the benefits of open and well-regulated services markets, and to support policy discussions across developed and developing countries. With annual updates, the STRI database provides a rich source of information with unique insights on policy and regulatory developments over the past decade.
Although the quality of data, regulatory indicators, and quantitative analysis are better than ever before, international discussions around services trade have slowed down in recent years. At the WTO Ministerial Conference in March 2024, Members agreed to “commit to reinvigorate work on trade in services within the mandate of the GATS and other existing mandates including through further thematic, evidence-based discussions”.1 Building on a decade of monitoring and analysing services policies, important lessons can be drawn to identify the best practices necessary to reinvigorate services trade reform. This report reflects on the benefits of services trade liberalisation and provides a forward-looking roadmap to eliminate the remaining barriers to trade in services while meeting overarching objectives on environmental sustainability, inclusiveness, digitalisation, and other important policy goals.
