Classification of E-products Under the WTO System

Abstract

The WTO Work Programme on Electronic Commerce was established to deal with the implications of E-commerce in trade in the context of the WTO Agreements. One outstanding issue within the Work Programme is the disagreement among members regarding the classification of electronically delivered products (E-products). Are they goods subject to GATT or services subject to GATS? This has significant consequences because trade liberalization in GATT and GATS works differently and the relatively free trade E-products currently enjoy could be affected depending on whether they are classified as goods or services. However, a negotiated solution among WTO members that acknowledges that these are complex products that share characteristics of both goods and services could resolve the disagreement on classification. Furthermore, a service classification consensus, provided the current trade liberalization is maintained, would be the most suitable option to ensure that trade barriers do not compromise trade in E-products.