The Limits of Resilience of Trade in Services Under the Impact of Post-Pandemic Geopolitical Tensions
|
|
|
| Authors: |
|
| Pages: | 81 : 93 |
| Abstract: | The end of the pandemic has brought new geopolitical challenges to the world economy, namely the Russian-Ukrainian conflict and the tensions in the Middle East. In addition, the new United States’ administration is complementing the list of geopolitical challenges with a series of measures, among which those related to trade relations stand out. All these overlapping geopolitical tensions have considerably increased the vulnerabilities in the global economy, affecting many international businesses, including those in service industries. The conflict in Ukraine, which has been going on for more than three years, has managed to disrupt all economic sectors, including trade in services. The two conflicts have had a major impact on trade in maritime transport services. Although it is not directly targeted by United States’ trade measures, trade in services is going to be affected due to the strong relationships between trade in goods and some services such as transport and logistics, as well as insurance, financial and business services. At the same time, possible distortions are anticipated, due to the fact that trade in services could be the subject of some retaliation measures of trading partners, such as those that could limit access for United States’ service providers to certain markets. The research identifies that trade in services is increasingly exposed to geopolitical instabilities, making it harder for businesses to operate across borders. At the same time, geopolitical tensions can generate disruptions to trade in digital services related to data flows, amplifying the risk and uncertainty for service businesses. Moreover, the increased level of interconnectivity and reliance on intangibles, such as trust, makes trade in services susceptible to the ripple effects of geopolitical instabilities. |
| JEL classification: | F13, F43, L8, O24 |
|
|
F13, F43, L8, O24
