Liberalising services trade could tackle imbalances – BoE paper

Container ship at sea
Trade in goods is easier to liberalise than trade in services, the authors note

Liberalising global trade in services could go a long way towards correcting persistent imbalances in countries’ current accounts, according to a paper published by the Bank of England.

The financial stability paper, Mind the (current account) gap, notes that the bulk of imbalances are driven by trade in goods, which has been relatively free for many years. This has led to large surpluses in exporters such as Germany and Japan, and persistent deficits in net importers, such as the UK and US.

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