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A Study on Applicable Law for Trade in Digital Products under the WTO
Vol. 49, No. 1 (June 2004)
PDF document - Author - Hyun Ho Kwon View - 2728
Discussions over electronic commerce under the WTO (World Trade Organization) start with selecting applicable law. To be more specific, diverse attitudes and understandings of WTO Members and its internal bodies concerning this issue can be categorized as follows: First, selecting the GATT (General Agreement on Tariffs and Trade), which is applicable for goods; Second, selecting the GATS (General Agreement on Trade in Services), which is applicable for services. In addition, there is also another approach to consider digital products as a third type, neither goods nor services.
It seems still rather too early to determine applicable law for digital products. However, for the time being, the GATT can be a second best choice as the applicable law for the purpose of legal stability and predictability. In fact, the level of trade liberalization under the GATS is relatively more restricted than that of the GATT. Thus, the GATS seems to be more constrained in achieving trade liberalization which is the fundamental objective of the WTO. In addition, to achieve the level of market access and specific concessions under the GATT may imply a new multilateral negotiation. Therefore, application of the GATS has relatively more disadvantages than that of the GATT. As for Korea, application of the GATT would be a more reasonable approach for national interest, considering several factors such as liberalization of trade - the idea of the WTO, assessment of the likeness, international competitiveness of the concerned domestic industry etc. Consequently, it would be better for Korea to select the GATT as applicable law for digital products.
Currently, multilateral approach to applicable law for digital products would be difficult under the on-going WTO negotiations. Thus, there can be a realistic solution to conclude a bilateral or plurilateral special agreement. However, it would be not desirable if this approach is used as a basis to force a particular state's opinion to others. Although for the time being it would be rather difficult to have a decision, WTO Members need to make more active efforts to solve this within the multilateral system considering legal stability and predictability. At the same time, Korea need to participate in the rule-making process of the WTO and to prepare specific and various scenarios.
 
 
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