Services trade and COVID-19

Abstract

While the lockdowns imposed in countries across the world in the wake of COVID-19 will be lifted eventually, social distancing (both voluntary and selective) is likely to stay for longer. This has already had, and will continue to have, a significantly adverse impact on services transactions that require proximity between buyers and sellers. Moving forward, the world could see more regulatory restrictions on services trade on health grounds. This column argues that consequently, trade in services is likely to take longer to recover, with knock-on effects on other sectors of economic activity.