SERVICES IN DISGUISE: APPLYING EC-BANANAS' GATS/GATT FRAMEWORK TO DIGITAL TRADE MEASURES

Abstract

The digital economy poses serious challenges to a traditional system for the WTO-one in which rules for goods and services are separate. When it comes to digital transactions, including cloud services, it is frequently unclear if the rules of GATT or GATS or both should apply. This article argues that the EC-Bananas III case, which allowed both agreements to apply at the same time, provides a useful way of dealing with this problem, if properly developed through later case-law. By analyzing examples like that of Canada Autos and China Publications, the article points out 5 key principles to understand when both agreements can be used simultaneously. Using these principles, the article examines four modern issues of digital trade; regulations on online content streaming, regulations on cloud computing, regulations on digital platforms and data localization requirements. It concludes with proposing a clear analytical approach to future WTO cases and discussing what this means for the future regulation of digital trade.