Asia-Pacific Economic Cooperation (APEC) member economies should strengthen efforts to bring the level of trade restrictions back to the pre-pandemic 2019 level particularly in some sub-sectors of transport, as they emerge from the pandemic and reconnect, according to a new report by the APEC Policy Support Unit.
The report titled “Monitoring Pandemic Recovery under the APEC Services Competitiveness Roadmap (ASCR)” takes stock of where services trade now stand and to identify barriers to its increased trade in the region. It monitored the recovery of travel, transport, including logistics-related services, and other business services sectors.
“Services trade could be affected by many factors, the adoption of trade-restrictive and trade liberalizing policies being a critical one,” it said.
The report said that despite sectoral variation, changes in such policies, including temporary measures introduced by governments in response to coronavirus disease 2019 (Covid-19), “arguably contributed to the significant fall in trade values between 2019 and 2020 and the subsequent recovery.”
Analysis of changes in the APEC Index score between 2021 and 2022 showed that several APEC economies have started to roll back temporary measures introduced in response to Covid-19 for all these sub-sectors, hence bringing back normality to the visa application process.
Many APEC economies also have removed their Covid-19 border restrictions and vaccination requirements, thus further reducing the burden and cost of traveling in APEC.
“While the removal of COVID-19 related measures is a welcome development, APEC economies have also introduced more non-COVID-19 trade restrictions (relative to non-COVID-19 trade liberalizations) over the same period for 13 sub-sectors between 2021 and 2022,” the report said.
For transport, three sub-sectors –air transport, maritime transport, and courier were in the red category, which is more restrictive than the average of 2020 and 2021 APEC Index scores.
The report said APEC economies need to look at overcoming restrictions with a particular focus on sectors in the red category.
Three sub-sectors –road freight transport, rail freight transport, and logistics customs brokerage were in the orange category, which is less restrictive than the average of 2020 and 2021 APEC Index scores but more restrictive than the pre-pandemic 2019 score.
The other four sub-sectors –logistics cargo-handling, logistics storage and warehouse, logistics freight forwarding, and distribution were in the green category, which is less restrictive than the pre-pandemic 2019 score.
For other business services, three sub-sectors –accounting, engineering, and legal– were in the orange category, while only architecture was in the green category.
The report further said that depending on the sub-sector, the top two categories of restrictions could be those related to foreign entry, restrictions to movement of people, barriers to competition, and/or regulatory transparency.
“While some of these restrictions may have been enacted for legitimate policy objectives, economies may wish to look into how these objectives could be achieved without having an unintended impact on trade, considering the interlinkages among policy measures,” it said.
The transportation sector reported a rosier outlook. Having fallen from USD900 billion in 2019 to USD700 billion in 2020, trade in transport has since recovered to USD1.2 trillion in 2022, which surpassed the projected value of USD900 billion.
The adoption of digital tools to improve access and provision of transport and logistics-related services have contributed to the recovery –a priority for APEC member economies.