The U.S. services sector, including industries such as business and professional services, communications, construction, healthcare, education, and finance, accounts for the preponderance of U.S. economic output. Americans spend twice as much on services as they do on goods and 80 percent of the U.S. workforce is employed in services industries.
Despite the prevalence of non‐tariff barriers to services trade – including outright restrictions against foreign firms participating in a slew of domestic service industries – services trade has grown faster than trade in goods over the past 25 years. But much greater effort to overcome a variety of non‐tariff barriers – including regulations and standards “behind the border” – is needed to achieve greater levels of specialization and also to enable the economies of scale required to support continued increases in U.S. and global living standards.
Non‐tariff barriers affect goods trade, as well as services trade, and the rules disciplining this form of protectionism are less clearly articulated. As the reduction of tariffs and other traditional border barriers induced substantial increases in goods trade following World War II, more attention now must be turned to the task of reducing non‐tariff barriers to both goods and services trade.
On this page you will find Cato’s work on trade in services, regulatory protectionism, and other forms of non‐tariff barriers to trade.