Traditional Categorisation of Trade and the Digital Economy: Toward Order or Chaos?
Traditional Categorisation of Trade and the Digital Economy: Toward Order or Chaos?

Summary/Abstract: Electronic commerce has disrupted traditional international trade categories, making it increasingly difficult to classify traded items as services, products or factors of production. This paper examines whether classic economic classifications can effectively capture the nature of e-commerce. The authors question the World Trade Organisation's division between goods and services in frameworks such as the General Agreement on Tariffs and Trade (GATT), the General Agreement on Trade in Services (GATS), and regional trade agreements (RTAs), arguing that the concept of a "commodity" fails to fully represent digital trade. The analysis shows that e-commerce often combines multiple categories within single transactions. Consequently, traditional legal, economic and trade policy concepts are insufficient to address the complexities of digital trade. Without a precise definition of e-commerce, practical issues arise, including challenges in identifying trade barriers and implementing effective regulations. The paper outlines the limitations of the current regulatory framework, reviews the WTO's trade classification system, and analyses the notion of "commodity" as an overly narrow term for e-commerce. Finally, the authors explore the characteristics of digital trade and recommend the introduction of new classification categories for electronically traded objects to help address these shortcomings.

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