Classification of E-products Under the WTO System
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Calcano, Maria A.
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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.
Description
The World Trade Organization (WTO) established the Work Program in Electronic Commerce in 1998 to address the implications of E-commerce on trade in the context of the WTO Agreements. In 1999 the Work Program members reached a consensus that the WTO-treaties with all their rights, obligations, and members’ specific commitments are applicable to E-commerce. However, many issues were not addressed and continue to be unresolved, one of those is the classification dilemma of E-products. Are they goods subject to GATT or services subject to GATS? In the meantime, in 1998, some WTO members agreed to a temporary Moratorium on the imposition of customs duties on electronic transmissions for a period of time. This Moratorium however is not permanent.
Keywords
International Trade, WTO System, E-products