Trade Rules for the Digital Economy: Charting New Waters at the WTO

Abstract This Article attempts to explore the challenges in situating a multilateral digital trade agreement within the legal framework of the World Trade Organization (WTO). Section 1 of the article discusses the broad challenges that digitization poses for the international legal framework for trade regulation. I argue first that the traditional classification of products into goods and services under the WTO system is structurally incompatible with the digital economy. I also argue that striking the appropriate balance between trade liberalization and the pursuit of legitimate public policy objectives in a digital trade agreement will be uniquely challenging because certain features that are intrinsic to the digital industry and business strategies of established players in the digital market raise serious anticompetition challenges. A multilateral agreement regulating digital trade needs to acknowledge and address these challenges. Section 2 surveys the efforts that have been undertaken to regulate digital trade as manifested in the WTO Work Program on Electronic Commerce. Acknowledging that the digital trade agenda of the Trans-Pacific Partnership (TPP) agreement could be used as a benchmark for discussions on e-commerce at the WTO, I argue that future negotiations for a multilateral digital trade policy will not benefit from using the TPP's digital trade agenda as a benchmark. The TPP does not reconcile systemic tensions between the digital economy and the extant WTO system or address the anticompetition challenges that are unique to the digital ecosystem.