A New Trade Regime for the Servitization of Manufacturing: Rethinking the Goods-Services Dichotomy

Abstract

Moving toward the age of industry 4.0, the increasing complementarities between goods and services lead to questions regarding how the divided trade rules for goods and services will be applied. How does the servitization of manufacturing render such divides problematic? How can we determine the nature of a regulation when the measures in a dispute are components of a complex regulatory landscape? Is there a need to break down goods/services legal silos? If so, how do we treat goods and services together? This article expands upon the existing assertions from various angles, and in particular, the increasingly ‘dual nature’ of domestic regulations brought about by technological developments, as well as systematic problems related to the concurrent application of the goods/services trade rules. Just as the regulatory developments toward goods/services converge in many areas of law, international economic law (IEL) is now faced with challenges in surviving the myth of the goods/services dichotomy. Evidently, silo-based systems trigger a great level of legal uncertainty and inconsistency in the application of trade rules. The final part of this article further explores the ‘mission impossible’ migration to a new trade regime. There are positive lessons to be learned in terms of the convergence of goods/services governance from the experiences of the Regional Trade Agreements (RTAs). Political interest in moving away from the increasingly outmoded vertical silos, in placing trade policy on a more sure empirical footing, and in establishing a new overarching trading paradigm may increase over time. Servitization, Industry 4.0, Goods-Services Dichotomy, Goods-Services Convergence, Dual Nature, Hybrid Measures, Domestic Regulation, Legal Silos.