The proliferation of
Generative Artificial Intelligence (Generative AI) presents a systemic
challenge to the multilateral trading system, centred on its unresolved legal
classification. The determination of whether Generative AI constitutes ‘goods’
under General Agreement on Tariffs and Trade (GATT) or ‘services’ under General
Agreement on Trade in Services (GATS) is a strategic choice that dictates the
applicable legal regime and shapes the permissibility of divergent national
regulations. This article dissects this dilemma, arguing that a generalized
‘goods’ classification is legally and strategically untenable. Proceeding from
a services-based framework, the analysis examines the significant tensions
between emerging national AI regulations and core World Trade Organization
(WTO) disciplines, particularly under GATS and the TradeRelated Aspects of
Intellectual Property Rights (TRIPS) Agreement. This legal analysis further
illuminates the divergent regulatory philosophies of the regulations, and the
corresponding strategic responses available to different national blocs. The
article concludes by advocating for international cooperation to adapt the
multilateral trading system, ensuring a predictable, rulesbased environment for
the digital economy.