THE global regulatory environment for services trade became more restrictive in 2020, with new barriers compounding the shock of the COVID-19 pandemic on exporters, according to a new report by the Organisation for Economic Cooperation and Development (OECD) released on Tuesday.

The OECD's 'Services Trade Restrictiveness Index (STRI)' shows an increasing pace in the erection of new barriers to services trade across all major sectors, including computer services, commercial banking and broadcasting.

Global services trade fell by 24 per cent in the third quarter of 2020 compared to a year ago, a small uptick from the 30 per cent year-on-year decline registered in the second quarter of this fiscal.

The COVID-19 pandemic may have acted as a catalyst, although several tightening measures were planned already before the global lockdowns, noted the report.

However, governments around the world did lower barriers to cross-border digital trade in 2020, as part of the overarching policy response to the pandemic. More facilitation measures for digital trade were issued than in previous years, helping remote working and online business operations.

Most liberalisations though, were in courier services, insurance and commercial banking.

"We have experienced a major shift in trade during the pandemic," OECD Secretary-General Mr Angel Gurria said.

"Transport and travel have collapsed, but digitally-delivered trade and enabling services such as telecommunications have contributed to the resilience of our economies. Lifting restrictions to trade in services will be critical as governments seek to put the global economy on the road to a strong, inclusive and sustainable recovery," he added.

The report, which covers services trade regulations in 48 countries, representing more than 80 per cent of global services exports, identifies top performers in terms of regulatory best practices, including Czech Republic, Latvia, and the Netherlands.

It also highlights the efforts in Brazil, China and Iceland, as the main "reformers" in 2020. Brazil introduced reforms in financial services and started applying a new General Data Protection Law in 2020. China eased foreign entry barriers for life insurance services and consolidated its regulatory framework for foreign investments under the new Foreign Investment Law. Iceland liberalised the postal sector by eliminating the existing State monopoly.

National and collective action to ease barriers to services trade can reduce trade costs for firms that provide services across borders, said the report. On average across sectors and countries, services trade costs could decline by more than 15 per cent after 3-5 years if countries could close half of the regulatory gaps with best performers.

An ambitious services trade agenda, including new services market access commitments in comprehensive trade and investment agreements, can drive such gains, the report said.