Breaking the Barriers to Services Trade in Central and Eastern Europe
Breaking the Barriers to Services Trade in Central and Eastern Europe

Author(s): Jasna Tonovska
Subject(s): Social Sciences
Published by: Udruženje ekonomista i menadžera Balkana
Keywords: Services; Services Trade Restrictiveness Index; Central and Eastern Europe
Summary/Abstract: Rapid technological advancements have caused profound shifts in the global economy, establishing services and their trade as pivotal components within the framework of economic transformation. The study investigates developments in international trade in services within five CEE countries over the last two decades, using various data sources - the Balance of Payments (BOP), the overall and the digital services trade restrictiveness index (STRI) and trade in value added. Despite CEE countries being net-exporters of services, the share of services in total external trade remains limited. Also, several ‘modern services’ exhibit an increase in their exports and services supplied internationally through mode 3 are substantial. As reflected in the modest share of services exports in GDP, services in CEE exhibit low tradability. Both STRI and Digital STRI data suggest that services sectors in CEE have open regulatory environment for trade. The findings highlight the importance of prioritizing digitalization and leveraging technological advancements to enhance services trade and foster economic growth in the CEE region.

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