Reforming services trade ensures that consumers have access to better quality services at lower prices. Furthermore, optimizing services trade helps increase domestic productivity and economic performance. With contemporary manufacturing increasingly reliant on sophisticated services inputs, competitiveness depends on access to state-of-the-art suppliers at the best price.

There is not one single service industry, but many services with different business models, competition challenges and best practice regulatory frameworks. To maximise the benefits of reform, targeted policy advice needs to identify the main bottlenecks by taking into account the level of trade costs in each sector, how far sectoral regulation diverges from international best practice, as well as the effects of services barriers on downstream segments of the economy.

Regulations differ considerably across countries, making it harder for services exporters to access new markets. Conversely, countries trade more with partners that have similar regulations. The cost of regulatory fragmentation is high and likely to affect smaller services exporters more, given their limited resources to absorb differences in compliance costs.

Regulatory co-operation makes it easier for exporters to do business. Recent examples of successful co-operation include the adoption of new disciplines on services domestic regulation at the World Trade Organisation (WTO), which entered into force in February 2024. While restrictions on services trade continue, these new disciplines are a major development and an example of successful co-operation that preserves important public policy goals while reducing unnecessary costs for services exporters.