Services trade costs in the United States: A simulation based on the OECD Services Trade Restrictiveness Index

Sebastian Benz and Alexander Jaax

No 1617, OECD Economics Department Working Papers from OECD Publishing

Abstract: While services account for almost 80% of GDP in the United States and a growing share of global trade, regulatory barriers to services trade around the world are still high. Using a hypothetical liberalisation scenario, this paper assesses the potential reduction of trade costs that could be achieved in 17 US services sectors. The analysis relies on the OECD Services Trade Restrictiveness Index (STRI) which records barriers to services trade in 46 economies. The illustrative scenario assumes a 50% reduction in the gap between the current STRI score of the United States and the score of the least restrictive country in each sector. The results highlight the economic benefits of aligning US services regulation with global best practice. The average reduction in trade costs across the 17 sectors analysed would amount to 9.7 percentage points, with a quarter of the sectors experiencing reductions larger than 14.1 percentage points and another quarter experiencing reductions smaller than 5.3 percentage points.

Keywords: regulation; services trade; services trade restrictions; trade cost; trade liberalisation (search for similar items in EconPapers)
JEL-codes: F13 F14 F15 F68 L88 (search for similar items in EconPapers)
Date: 2020-09-14
New Economics Papers: this item is included in nep-int
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Persistent link: https://EconPapers.repec.org/RePEc:oec:ecoaaa:1617-en

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