Global services trade regulations showed signs of liberalisation in 2021, slowing the steady build-up of trade barriers identified in previous years, according to a new OECD report.
OECD Services Trade Restrictiveness Index (STRI): Policy trends up to 2022 shows that liberalisation outpaced new restrictions during the past year, as the erection of new barriers to services trade slowed across almost all major sectors covered. The average cumulative increase in barriers across sectors covered by the Index (STRI) was six times lower in 2021 than in 2020, indicating a significant decrease both in the volume and effect of new trade restrictions.
Most trade liberalisation was identified in air transport services, commercial banking and computer services. Easing of regulations particularly affected services supplied through commercial presence in other markets, and through the temporary movement of people.
The annual report, which covers services trade regulations in 50 countries and 22 services sectors, representing more than 80% of global services exports, identifies top performers in terms of regulatory best practices and liberalisation, including the Czech Republic, Japan and Chile.
It also points out new measures that have created impediments to services trade, notably tighter conditions on the screening of foreign investment, which was already on the rise in 2020, and continued in 2021. Other regulatory changes were implemented in response to the COVID-19 pandemic, as governments implemented measures to protect public health and to mitigate the economic consequences. However, most COVID-19 policy measures have marginal bearing on the STRI database, as these are largely temporary or targetting support measures in sectors not covered by the STRI, such as health, protective equipment or essential goods.
The OECD points out that ambitious efforts to ease services trade barriers could yield substantial benefits in reducing trade costs for firms that provide services across borders, especially if the trends identified in 2021 continue in the years to come. On average across sectors, services trade costs could decline by 6% to 16% in the medium term 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.
The trend towards market openness for services trade identified in the OECD’s annual monitoring exercise accompanies the landmark adoption of the WTO Reference Paper on Services Domestic Regulation at the end of 2021, demonstrating collective will to liberalise services trade. OECD analysis demonstrates that full implementation of the new WTO disciplines can unlock annual services trade cost savings in the range of USD 150 billion, with substantial benefits in financial services, business services, communications and transport services.
Open markets for services trade boost supply chain resilience, while lower services trade costs will facilitate recovery from the shock of the COVID-19 pandemic on exporters. Multilateral trade rules and open commitments on services can lock in these benefits and provide certainty to firms seeking to access foreign markets.
For further information on OECD work on the services trade, see: https://www.oecd.org/trade/topics/services-trade/.
Contact:

John Drummond, Head of the Trade in Services Division of the OECD Trade and Agriculture Directorate | John.Drummond@oecd.org | +33 1 45 24 95 36

Lawrence Speer, OECD Media Office | lawrence.speer@oecd.org | +33 1 45 24 79 70

Compliments of the OECD.
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Monetary policy statement by Christine Lagarde, President of the ECB, and Luis de Guindos, Vice-President of the ECB | Frankfurt am Main, 3 February 2022 |
Good afternoon, the Vice-President and I welcome you to our press conference.
The euro area economy is continuing to recover and the labour market is improving further, helped by ample policy support. But growth is likely to remain subdued in the first quarter, as the current pandemic wave is still weighing on economic activity. Shortages of materials, equipment and labour continue to hold back output in some industries. High energy costs are hurting incomes and are likely to dampen spending. However, the economy is affected less and less by each wave of the pandemic and the factors restraining production and consumption should gradually ease, allowing the economy to pick up again strongly in the course of the year.
Inflation has risen sharply in recent months and it has further surprised to the upside in January. This is primarily driven by higher energy costs that are pushing up prices across many sectors, as well as higher food prices. Inflation is likely to remain elevated for longer than previously expected, but to decline in the course of this year.
The Governing Council therefore confirmed the decisions taken at its monetary policy meeting last December, as detailed in the press release published at 13:45 today. Accordingly, we will continue reducing the pace of our asset purchases step by step over the coming quarters, and will end net purchases under the pandemic emergency purchase programme (PEPP) at the end of March. In view of the current uncertainty, we need more than ever to maintain flexibility and optionality in the conduct of monetary policy. The Governing Council stands ready to adjust all of its instruments, as appropriate, to ensure that inflation stabilises at its two per cent target over the medium term.
I will now outline in more detail how we see the economy and inflation developing, and will then talk about our assessment of financial and monetary conditions.
Economic activity
Economic growth weakened to 0.3 per cent in the final quarter of last year. Nevertheless, output reached its pre-pandemic level at the end of 2021. Economic activity and demand will likely remain muted in the early part of this year for several reasons. First, containment measures are affecting consumer services, especially travel, tourism, hospitality and entertainment. Although infection rates are still very high, the impact of the pandemic on economic life is now proving less damaging. Second, high energy costs are reducing the purchasing power of households and the earnings of businesses, which constrains consumption and investment. And third, shortages of equipment, materials and labour in some sectors continue to hamper the production of manufactured goods, delay construction and hold back the recovery in parts of the services sector. There are signs that these bottlenecks may be starting to ease, but they will still persist for some time.
Looking beyond the near term, growth should rebound strongly over the course of 2022, driven by robust domestic demand. As the labour market is improving further, with more people having jobs and fewer in job retention schemes, households should enjoy higher income and spend more. The global recovery and the ongoing fiscal and monetary policy support also contribute to this positive outlook. Targeted and productivity-enhancing fiscal measures and structural reforms, attuned to the conditions in different euro area countries, remain key to complement our monetary policy effectively.
Inflation
Inflation increased to 5.1 per cent in January, from 5.0 per cent in December 2021. It is likely to remain high in the near term. Energy prices continue to be the main reason for the elevated rate of inflation. Their direct impact accounted for over half of headline inflation in January and energy costs are also pushing up prices across many sectors. Food prices have also increased, owing to seasonal factors, elevated transportation costs and the higher price of fertilisers. In addition, price rises have become more widespread, with the prices of a large number of goods and services having increased markedly. Most measures of underlying inflation have risen over recent months, although the role of temporary pandemic factors means that the persistence of these increases remains uncertain. Market-based indicators suggest a moderation in energy price dynamics in the course of 2022 and price pressures stemming from global supply bottlenecks should also subside.
Labour market conditions are improving further, although wage growth remains muted overall. Over time, the return of the economy to full capacity should support faster growth in wages. Market-based measures of longer-term inflation expectations have remained broadly stable at rates just below two per cent since our last monetary policy meeting. The latest survey-based measures stand at around two per cent. These factors will also contribute further to underlying inflation and will help headline inflation to settle durably at our two per cent target.
Risk assessment
We continue to see the risks to the economic outlook as broadly balanced over the medium term. The economy could perform more strongly than expected if households become more confident and save less than expected. By contrast, although uncertainties related to the pandemic have abated somewhat, geopolitical tensions have increased. Furthermore, persistently high costs of energy could exert a stronger than expected drag on consumption and investment. The pace at which supply bottlenecks are resolved is a further risk to the outlook for growth and inflation. Compared with our expectations in December, risks to the inflation outlook are tilted to the upside, particularly in the near term. If price pressures feed through into higher than anticipated wage rises or the economy returns more quickly to full capacity, inflation could turn out to be higher.
Financial and monetary conditions
Market interest rates have increased since our December meeting. However, bank funding costs have so far remained contained. Bank lending rates for firms and households continue to stand at historically low levels and financing conditions for the economy remain favourable. Lending to firms has picked up, supported by both short and longer-term loans. Robust demand for mortgages is sustaining lending to households. Banks are now as profitable as they were before the pandemic and their balance sheets remain solid.
According to our latest Bank Lending Survey, loan demand by firms increased strongly in the last quarter of 2021. This was driven by both higher working capital needs, stemming from supply bottlenecks, and increased financing of longer-term investment. In addition, banks continue to hold an overall benign view of credit risks, mainly because of their positive assessment of the economic outlook.
Conclusion
Summing up, the euro area economy continues to recover, but growth is expected to remain subdued in the first quarter. While the outlook for inflation is uncertain, inflation is likely to remain elevated for longer than previously expected, but to decline in the course of this year. We will remain attentive to the incoming data and carefully assess the implications for the medium-term inflation outlook. We stand ready to adjust all of our instruments, as appropriate, to ensure that inflation stabilises at its two per cent target over the medium term.
We are now ready to take your questions.
Compliments of the European Central Bank.
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Today, the Commission is presenting a new Standardisation Strategy outlining our approach to standards within the Single Market as well as globally. The Strategy is accompanied by a proposal for an amendment to the Regulation on standardisation, a report on its implementation, and the 2022 annual Union work programme for European standardisation. This new Strategy aims to strengthen the EU’s global competitiveness, to enable a resilient, green and digital economy and to enshrine democratic values in technology applications.
Standards are the silent foundation of the EU Single Market and global competitiveness. They help manufacturers ensure the interoperability of products and services, reduce costs, improve safety and foster innovation. Standards are an invisible but fundamental part of our daily life: from Wi-Fi frequencies, to connected toys or ski bindings, just to mention a few. Standards give confidence that a product or a service is fit for purpose, is safe and will not harm people or the environment. Compliance with harmonised standards guarantees that products are in line with EU law.
The fast pace of innovation, our green and digital ambitions and the implications of technological standards for our EU democratic values require an increasingly strategic approach to standardisation. The EU’s ambitions towards a climate neutral, resilient and circular economy cannot be delivered without European standards. Having a strong global footprint in standardisation activities and leading the work in key international fora and institutions will be essential for the EU to remain a global standard-setter. By setting global standards, the EU exports its values while providing EU companies with an important first-mover advantage.
Executive Vice-President for a Europe Fit for the Digital Age, Margrethe Vestager, said: “Ensuring that data is protected in artificial intelligence or ensuring that mobile devices are secure from hacking, rely on standards and must be in line with EU democratic values. In the same way, we need standards for the roll-out of important investment projects, like hydrogen or batteries, and to valorise innovation investment by providing EU companies with an important first-mover advantage.”
Commissioner for the Internal Market, Thierry Breton, said: “Technical standards are of strategic importance. Europe’s technological sovereignty, ability to reduce dependencies and protection of EU values will rely on our ability to be a global standard-setter. With today’s Strategy, we are crystal-clear on our standardisation priorities and create the conditions for European standards to become global benchmarks. We take action to preserve the integrity of the European standardisation process, putting European SMEs and the European interest at the centre”.
The Strategy presented today proposes five key sets of actions:

Anticipate, prioritise and address standardisation needs in strategic areas: we need standards faster and in tune with the European innovation and policy agenda. The Commission has identified standardisation urgencies as regards COVID-19 vaccine and medicine production, critical raw materials recycling, the clean hydrogen value chain, low-carbon cement, chips certification and data standards. As of this year, standardisation priorities will be clearly identified in the 2022 annual Union work programme for European standardisation. A High-level Forum will be set up to inform future standardisation priorities. The Commission will establish the function of a Chief Standardisation Officer to ensure high-level guidance across the Commission on standardisation activities, which will be supported by an EU excellence hub on standards composed of Commission services.

Improve the governance and integrity of the European standardisation system: European standards, which support EU policy and legislation, must be decided by European players. The Commission is proposing an amendment to the Regulation on standardisation to improve the governance in the European standardisation system. While the European system will remain open, transparent, inclusive and impartial, the proposal prescribes that mandates at the request of the Commission to the European standardisation organisations must be handled by national delegates – the national standardisation bodies – from the EU and EEA Member States. This will avoid any undue influence of actors from outside the EU and EEA in the decision-making processes during the development of standards for key areas, like cybersecurity or hydrogen standards. The Commission will further pay close attention to the inclusiveness of the system, the role of SMEs and civil society. It calls on the European standardisation organisations to modernise their governance structures and will launch a peer review process among Member States and national standardisation bodies to achieve better inclusiveness for civil society, users and SMEs-friendly conditions for standardisation. At the same time, the Commission will launch the evaluation of the Regulation on standardisation.

Enhance European leadership in global standards: the Commission will work through the High-Level Forum to set up a new mechanism with EU Member States and national standardisation bodies to share information, coordinate and strengthen the European approach to international standardisation. The Commission will also pursue more coordination between EU Member States and like-minded partners. The EU will fund standardisation projects in African and the Neighbourhood countries.

Support innovation: the Commission is proposing to better tap into the potential of EU-funded research to valorise innovation projects through standardisation activities and anticipate early standardisation needs. A ‘standardisation booster’ to support researchers under Horizon 2020 and Horizon Europe to test the relevance of their results for standardisation, will be launched. The development of a Code of Practice for researchers on standardisation will be initiated to strengthen the link between standardisation and research/innovation through the European Research Area (ERA), by mid-2022.

Enable the next generation of standardisation experts: standards rely on the best experts and Europe is facing a generation shift. The Commission will promote more academic awareness on standards, for instance through the future organisation of EU University Days and training of researchers.

Background
Today, standards have become a matter of global importance. Other regions are reinforcing their global footprint by being more strategic and assertive. The European standardisation system needs to evolve to respond to these challenges. The Commission’s plans for a new Standardisation Strategy and legislative adjustment to the standardisation Regulation were announced in the Commission’s ‘Updating the 2020 New Industrial Strategy: Building a stronger Single Market for Europe’s recovery‘.
A harmonised standard is a European standard developed by a recognised European Standards Organisation (CEN, CENELEC or ETSI) following a request from the European Commission. Once accepted, these standards become part of EU law and provide manufacturers using them across the Single Market with a presumption of conformity with the requirements of EU legislation, helping to reduce costs for small businesses. The process is based on a public-private-partnership between the Commission and the standardisation community, where the division of roles and responsibilities is guided by the 2012 standardisation Regulation.
Compliments of the European Commission.
The post New approach to enable global leadership of EU standards promoting values and a resilient, green and digital Single Market first appeared on European American Chamber of Commerce New York [EACCNY] | Your Partner for Transatlantic Business Resources.

We are jointly committed to Europe’s energy security and sustainability and to accelerating the global transition to clean energy. We also share the objective of ensuring the energy security of Ukraine and the progressive integration of Ukraine with the EU gas and electricity markets.
The EU and the United States cooperate closely on energy policy, decarbonisation and security of supply in the U.S.-EU Energy Council. The EU’s and the United States’ commitments to meet the goals of the Paris Agreement, through clean energy, in particular renewables, energy efficiency, and technologies, provide a path to energy security and reduced dependence on fossil fuels. The current challenges to European security underscore our commitment to accelerating and carefully managing the transition from fossil fuels to clean energy.
Over the last decade, the EU has invested in diversification of supply through infrastructure and reinforcement of its internal energy networks, increasing the resilience and flexibility of EU energy markets. The European Commission will intensify work with Member States for security of supply, within transparent and competitive gas markets in a manner compatible with long-term climate goals and reaching net-zero emissions by 2050.
While that process intensifies during this critical decade, we are committed to working closely together to overcome today’s challenges of security of supply and high prices in energy markets.
We commit to intensifying our strategic energy cooperation for security of supply and will work together to make available reliable, and affordable energy supplies to citizens and businesses in the EU and its neighbourhood.
The United States and the EU are working jointly towards continued, sufficient, and timely supply of natural gas to the EU from diverse sources across the globe to avoid supply shocks, including those that could result from a further Russian invasion of Ukraine. The United States is already the largest supplier of liquefied natural gas (LNG) to the EU. We are collaborating with governments and market operators on supply of additional volumes of natural gas to Europe from diverse sources across the globe. LNG in the short-term can enhance security of supply while we continue to enable the transition to net zero emissions. The European Commission will work for improved transparency and utilisation of LNG terminals in the EU.
We intend to work together, in close collaboration with EU Member States, on LNG supplies for security of supply and contingency planning. We will also exchange views on the role of storage in security of supply.
More broadly, we call on all major energy producer countries to join us in ensuring world energy markets are stable and well-supplied. This work has already started, and we will take it forward at the meeting of the U.S.-EU Energy Council on February 7.
Compliments of the European Commission.
The post Joint statement by President von der Leyen and President Biden on U.S.-EU cooperation on energy security first appeared on European American Chamber of Commerce New York [EACCNY] | Your Partner for Transatlantic Business Resources.

This article was previously published in the Irish Independent | By John Bruton |
Notwithstanding the positive sounds emanating from Monday’s meeting between Liz Truss and Maros Sefcovic, the talks between the European Commission and the UK government over the Protocol on Northern Ireland are probably heading to a major crisis in the next month. There has been no movement of the UK side, and immovable deadlines are approaching.
The UK agreed to the Protocol as part of their Withdrawal Treaty with the EU. The Protocol was an intrinsic part of the Treaty.  The UK Parliament ratified the Treaty, including the Protocol, but now the UK government is trying to scrap it altogether, under a this pretence of “renegotiating “ it.
The fundamental problem is that the British negotiating strategy is being driven by old fashioned, populist, and simplistic notions about trade. The EU strategy, on the other hand, is driven by a legal imperative to protect the most advanced form of economic and commercial integration between sovereign nations that has ever been achieved. The clash is a clash of mind sets. The arguments of either side are based on fundamentally incompatible assumptions.
There is the added complication that the negotiations between Liz Truss and Maros Sefcovic are taking place in the midst of a political crisis in Britain, in which any compromise is liable to be used as a political weapon in a struggle to lead the Conservative Party.
Conservative Britain always pretended to see the EU as simple free trade area. But the rest of the EU members realized one could not have truly free trade, unless there were four other things

common rules on the quality of products
freedom for people and money to move from country to country,
common trade policies vis a vis the rest of the world, and
a shared set of political goals that facilitated day to day compromise.

A big segment of English opinion never accepted this latter concept of the EU. This makes it difficult for them to even to understand the necessary implications of the Protocol .
The Protocol makes Northern Ireland part of the EU Single market for goods produced in Northern Ireland. Meanwhile Britain has left the EU Single Market.  Britain has no more than a bare bones trade agreement with the EU. This makes a big difference. But it is what the UK government and Parliament agreed.
Goods produced in Northern Ireland (NI) are being treated as EU goods, whereas goods produced in Britain are non EU goods.
In the case of goods made up of parts, ingredients or components coming from different countries, The parts, ingredients or components produced in Northern Ireland qualify, for rules of origin purposes, as “European”. Meanwhile parts, ingredients or components originating in Britain are of non EU origin.
This distinction can be very important in deciding whether a final product is sufficiently “European” to benefit from duty free access to the EU market. If one wants to ensure that a sufficient percentage of a final product is “European”, it makes sense to source ingredients or parts in NI rather than in  another part of the UK.
Goods coming into NI will be subject to EU Customs rules and tariffs, whereas goods coming into Britain will be subject to (potentially very different) UK Customs rules and tariffs.
This gap has to be policed, if there is not to be abuse. In the Protocol the EU and the UK agreed  how this gap is to be policed.
The gap will become progressively wider, if the UK seeks to exploit the freedom it won by Brexit by making new (and different) British standards to replace the old standards that it might claim had been “imposed by Brussels”.
The more the standards diverge, the more will checks be needed on goods entering the EU market through NI, to ensure that they comply with EU requirements.
Then there is the question of the European Court interpreting EU rules as  they apply to NI  goods circulating freely in the EU Single Market .  The UK agreed to this but now is objecting to it.
For NI businesses to be free to export their products within the EU Single Market under the Protocol they have to be able to convince their competitors and customers in France and Germany that NI goods are fully compliant with EU rules. These rules are interpreted, in final analysis, by the European Court of Justice. That ensures consistency.
The rules must be interpreted in the same way for NI goods,  as they are for goods produced  in France or Germany. The role of the ECJ in the Protocol is the passport for NI goods into Europe,  one of the biggest markets in the world.
The role of the ECJ is, of course, confined to  EU rules applying to goods. It will have no general jurisdiction in NI on other matters. There the final arbiter will be the UK Supreme Court.
There is a logjam in the negotiations because the UK side keeps repeating the same talking points ,  pocketing EU concessions without reciprocity, and withholding cooperation with the EU authorities on access to data. It is also stalling on building installations in Belfast Port that would allow customs officials there to do their work safely and conveniently. The UK is using “grace periods” to defer indefinitely controls it  agreed to. It is almost as if the UK does not want to face up to the implications of Brexit.
The UK, and some unionists, talk about using Article 16 as if this would allow the ending of checks in Belfast port. That is not legally possible. Article 16 only allows limited and temporary derogations. To use it to go beyond that would be a straightforward breach of international law.
We are facing a moment of truth.
Author:

John Bruton, former Irish Prime Minister (Taoiseach) and former European Union Ambassador to the United States

Compliments of John Bruton.
The post Brexit crisis looms over Protocol first appeared on European American Chamber of Commerce New York [EACCNY] | Your Partner for Transatlantic Business Resources.

Euro banknote counterfeiting at historically low level in 2021

347,000 counterfeit euro banknotes withdrawn from circulation in 2021, a historically low level in proportion to banknotes in circulation
About two-thirds of total withdrawn counterfeits were €20 and €50 banknotes
Euro banknotes remain a trusted and safe means of payment
Authenticity of euro banknotes can be verified using “feel, look and tilt” method

Some 347,000 counterfeit euro banknotes were withdrawn from circulation in 2021 (180,000 in the second half of the year), a decrease of 24.6% when compared with 2020. €20 and €50 notes continued to be the most counterfeited banknotes, jointly accounting for about two-thirds of the total. 95.4% of counterfeits were found in euro area countries, while 4.2% were found in non-euro area EU Member States and 0.4% in other parts of the world.
There is little likelihood of receiving a counterfeit, as the number of counterfeits remains very low in proportion to the number of genuine euro banknotes in circulation. In 2021, 12 counterfeits were detected per 1 million genuine banknotes in circulation, which is a historically low level (see the chart below).
Low-quality reproductions are continuously withdrawn from circulation. Counterfeits are easy to detect as they have no security features, or only very poor imitations of them. The public does not need to be concerned about counterfeiting, but should nevertheless remain vigilant. You can check your notes by using the simple “feel, look and tilt” method described in the dedicated section of the ECB’s website and on the websites of the national central banks of the euro area. The Eurosystem also helps professional cash handlers by ensuring that banknote-handling and processing machines can reliably identify counterfeits and withdraw them from circulation.
Using counterfeits for payments is a criminal offence that may lead to prosecution. If you receive a suspect banknote, compare it directly with one you know to be genuine. If your suspicions are confirmed please contact the police or – depending on national practice – your national central bank or your own retail or commercial bank. The Eurosystem supports law enforcement agencies in their fight against currency counterfeiting.
The Eurosystem has a duty to safeguard the integrity of euro banknotes and to continue improving banknote technology. The second series of banknotes – the Europa series – is even more secure and is helping to maintain public trust in the currency.

Chart 1
Number of counterfeits detected annually per 1 million genuine notes in circulation

Image courtesy of the ECB.

Table 1
Yearly figures in comparison

Period
2016
2017
2018
2019
2020
2021

Number of counterfeits
684,000
694,000
563,000
559,000
460,000
347,000

Table 2
Breakdown by denomination in 2021

Denomination
€5
€10
€20
€50
€100
€200
€500

Percentage of total
2.4%
15.7%
32.1%
33.8%
9.5%
5.5%
1.0%

Contact:

Georgina Garriga Sánchez | georgina.garriga_sanchez@ecb.europa.eu | tel.: +49 69 1344 95368.

Compliments of the European Central Bank.
The post ECB | The euro: a trusted and safe means of payment first appeared on European American Chamber of Commerce New York [EACCNY] | Your Partner for Transatlantic Business Resources.