VENDREDI 03 DÉCEMBRE 2021 BIZWEEK ÉDITION 371 0% -5% -10% -16% -20% Figure Streamlinin g S DR reduces bar6ers to services tracte Average percenta-ge of decrease in STR ! v3kies resnq from m'aval of eXistIng Inipedirrierits The 67 WTO members taking part in the initiative In total, 67 World Trade Organization’s members are taking part in finalizing a new deal on services domestic regulation. These countries are : Albania, Argentina, Australia, Austria, Bahrain Kingdom of, Belgium, Brazil, Bulgaria, Canada, Chile, China, Colombia, Costa Rica, Croatia, Cyprus, Czech Republic, Denmark, El Salvador, Estonia, Finland, France, Germany, Greece, Hong Kong, China, Hungary, Iceland, Ireland, Israel, Italy, Japan, Kazakhstan, Korea Republic of, Latvia, Liechtenstein, Lithuania, Luxembourg, Malta, Mauritius, Mexico, Moldova Republic of, Montenegro, Netherlands, New Zealand, Nigeria, North Macedonia, Norway, Paraguay, Peru, Philippines, Poland, Portugal, Romania, Russian Federation, Saudi Arabia Kingdom of, Singapore, Slovak Republic, Slovenia, Spain, Sweden, Switzerland, Separate Customs Territory of Taiwan, Penghu, Kinmen and Matsu, Thailand, Turkey, Ukraine, United Kingdom, United States and Uruguay. STFtt raduction in% Average. ! MU. POST SCRIPTUM ire 1.vilk.1.1)1'11.0.11-11 CuLciear, in ic a)) OECD CUTTING RED TAPE, SLASHING TRADE COSTS, AND FACILITATING SERVICES TRADE Lowering trade costs through services domestic regulation implementation Despite the increasing awareness of good regulatory practices for the smooth function of services markets, there remains scope for further progress on streamlining domestic regulation of services sectors. This assessment is based on a benchmarking of the various disciplines of the Joint Initiative against the database of the OECD Services Trade Restrictiveness Index (STRI). Full implementation of the SDR disciplines would make an important contribution to facilitate cross-border services trade. Benchmarking of SDR disciplines against the STRI database shows that impediments to services trade could be lowered by 11% in the average across all economies participating in the Joint Initiative for which data is available. Most barriers could be eliminated in sectors such as computer services, commercial banking, and telecommunications services (all -16%), which are key intermediate services contributing to all economic activities. Moreover, as most of these sectors are important pillars of the digital economy, streamlining domestic regulations would also benefit digital trade. These reductions of services trade barriers highlight some of the challenges faced by services companies when providing services to foreign jurisdictions. Streamlined regulations in services sectors could reduce the time and cost required for dealing with administrative barriers and regulatory red tape. These cost savings can incentivise new trade and new investment. They can also be passed on through lower prices to users of these services, including consumers and businesses. While the exact distribution of cost savings is difficult to assess, it is possible to quantify the magnitude of potential savings based on the current volume of services trade. Broader trade benefits of implementing services domestic regulation Besides significant trade costs savings, the implementation of SDR disciplines can bring broader economic benefits, including an increase in services trade and enhanced participation in global value chains (GVCs). The implementation of SDR disciplines tends to correspond to more services trade by all four modes of supply. Trade in services is critical to economic growth and development. For developing economies, services trade offers opportunities to build know-how and technological capacity and achievecompetitiveness at the global level. Moreover, there is evidence that services exporters pay higher wages than non-exporting firms. Cutting red tape in regulatory frameworks can help create new services trade opportunities for suppliers of all sizes and women entrepreneurs. It can benefit particularly micro, smalland medium-sized enterprises (MSMEs), which typically face limited resources to navigate complex and costly requirements and procedures. Concluding remarks At a time when businesses advocate for more transparency and predictability of regulatory frameworks, and even more so against the backdrop of the current COVID-19 pandemic, the SDR disciplines will consolidate a set of internationally recognized good regulatory practices within the WTO legal framework. Through the implementation of these disciplines, economies can significantly lower trade costs, with an estimated reduction of around USD 150 billion annually, and reap related trade benefits, including enhancing volumes of services trade and fostering participation in global value chains. 8 |
