Services trade costs in the United States: A simulation based on the OECD Services
Trade Restrictiveness Index
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.
Published on September 14, 2020
In series:OECD Economics Department Working Papersview more titles