G/TBT/GEN/356  
 
20 July 2023 
(23-4957) Page: 1/5 
Committee on Technical Barriers to Trade    
 
  
THEMATIC SESSION ON REGULATORY COOPERATION BETWEEN MEMBERS  
ON INTANGIBLE DIGITAL PRODUCTS  
20 JUNE  2023, 10:00-13:00 
Moderator's Report1 
At the Ninth Triennial Review, Members agreed to continue to hold thematic sessions in conjunction 
with the TBT Committee's regular meetings from 2022 to 2024 to further deepen the exchange of 
experiences on specific topics. On this basis, the Committee ag reed to hold a thematic session on 
regulatory cooperation between Members on intangible digital products .2 Information about the 
speakers, presentations, and related materials is available on the WTO website.3  
 
1  INTRODUCTORY REMARKS BY THE MODERATOR  
1.1.  Intangible digital products, such as software and other digitally encoded products that can be 
transmitted electronically, are an important and growing part of the modern economy and 
international trade. The emergence of these products composed of bits and byt es may challenge our 
concept of what a "product" is.  
1.2.  For example, the International Medical Device Regulators Forum defines the term "Software as 
a Medical Device" (SaMD) as software intended to be used for one or more medical purposes that 
perform these p urposes without being part of a hardware medical device . Software as a Medical 
Device, that is  not imbedded in a tangible medical device, is regulated by Health Canada, Canada's 
medical device regulator, under technical regulations that are similar to those used for "traditional" 
tangible medical devices. Is software as a medical device a "product"?  
1.3.  For instance, let  us imagine that a company sells software  that processes images to help detect 
breast cancer. That company provides the software to hospitals by email. In turn, these hospitals 
run this software on their regular non -specialized computer syst em. From a regulatory perspective, 
is there a difference between this cancer detecting software and an X -Ray machine? Is an app, that 
treats dementia by cognitive stimulation, that the company that creates it provides to its customers 
electronically, diffe rent from a dialysis machine?  
1.4.  Another example of a digital product is software a firm sells to its customers that they use to 
prepare their tax return. Historically, this "product" was sold on a tangible floppy disk. Today, 
however, customers download the software directly off the Internet onto their personal computer 
and it never exists in tangible form. Is this tax preparation software still a "product"?  
1.5.  When these new amorphous "products" are not related to traditional tangible products, they 
are spawnin g the development of novel regulatory measures. These measures are needed to support 
their development, address risks associated with their deployment and facilitate international trade 
in them. This is being reflected in Members ' notifications , to this Co mmittee , of new regulatory 
measures. Up to May 31 of this year, there have been 36 general software notifications, 12 
notifications of software as a medical device and one AI notification. In addition, regulatory measures 
 
1 Mr Francis Dorsemaine  (Canada ). This Report is provided on the Moderator's own responsibility.  
2 G/TBT/46 . 
3 WTO | Thematic Session on Regulatory Cooperation between Members on Digital Products .  G/TBT/GEN/356  
 
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  applied to AI and software have be en raised by Members in this Committee as Specific Trade 
Concerns.  
2  GUIDING QUESTIONS  
• What are the challenges and opportunities for trade in intangible digital products? How can 
standards, technical regulations and conformity assessment procedures help address these 
challenges and harness these opportunities?  
• What is the impact of regulatory interventions on MSMEs in the area of trade in intangible 
digital products? How to ensure MSMEs are not disproportionately affected by such 
regulatio ns, and what role can the TBT Committee play in this regard?  
• What opportunities exist for regulatory cooperation and standards development between 
Members and stakeholders (both within and outside the WTO) in the area of emerging digital 
technologies and h ow can such cooperation help in avoiding unnecessary regulatory 
fragmentation in this area?  
3  INTERVENTIONS  
3.1.  Ms Heidi Lund  (European Union )4 presented the report of the National Board of Trade of 
Sweden "Innovation, AI, Technical Regulation and Trade".  This report analyses how digital 
innovations change the way in which industrial goods  should be regulated . Ms Heidi noted that, a s 
a result of such analysis, it was found that digital innovations increase regulatory complexity and 
challenge our cur rent trade policy frameworks that rely heavily on the use of international standards 
and systems for conformity assessment, not necessarily always responding to the needs of fast 
developing digital innovations . In addition, digital innovation broadens the regulatory concerns 
applicable for industrial products, i.e., that digital products compliance is not only about product 
safety but also about cybersecurity, personal integrity and resilience, which is a huge change from 
the past. The report also concluded  that the ability to really control and monitor changes in the 
properties of digital goods has been significantly weakened (companies and regulators alike ) and 
that regulation of products with embedded digital technologies does not sufficiently consider co mplex 
supply chains and that challenges aspects of traceability, auditability and verification of product 
compliance. In addition, the report found that there is a risk that regulatory parameters on product 
safety, cybersecurity, integrity and resilience a re blurred when risks are defined in the regulation of 
industrial goods. All these regulatory concerns are currently addressed by a multitude of approaches 
and various regulative proposals, but not necessarily in a coordinated and clear manner.  
3.2.  Ms Lund als o outlined  the following policy recommendations from the report: (i) decision -
makers should invest in more mature regulations and improve their understanding of digital 
technologies; (ii) regulations should focus on the life -cycle perspectives as the chara cteristics of 
digital goods change over time; (iii) regulators need to improve methods for "continuous compliance" 
and, for this  purpose , new capacities and skills are needed in the market surveillance and the 
enforcement of product safety and security . Against this background, she concluded that regulations 
should be better adapted to digital innovations in order  to address risks associated with the 
deployment and use of digital technologies and to mitigate risks of regulatory fragmentation and 
trade barri ers.  
3.3.  Mr Jason Matusow  (United States)5 spoke about standardization and conformity assessment 
in relation to the unique requirements of digital services. He first provided two concrete examples 
to explain how digital services are affecting traditional goods. His first example was about 
refrigera tors with screens and sensors that enable digital services applications from different 
providers. Such applications are of dynamic nature and represent business opportunities for MSMEs 
that provide cross -border digital services. His second example was abou t the new business model 
of jet engine manufacturers who provide engines at no cost to the airlines but instead sell "air 
operating time " due to digital services.  The digital service model is based on the fact that engines 
are loaded with sensors generatin g enormous amount of data that can be applied with machine 
learning and AI systems for predictive maintenance capabilities. All actors in the engine supply chain 
as well as airline, government of a given country would like to have access to such data (to, for 
example, better understand air traffic safety concerns or assess pilot's performance). These 
 
4 Senior Adviser, Department for Trade Agreements and Technical Rules, National Board of Trade, Sweden.  
5 General Manager, Corporate Standards Group , Microsoft Corporation.  G/TBT/GEN/356  
 
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  examples demonstrate how data generated in and around a device can create local value and 
distributed economic opportunities and how underlying platforms becom e enablers of a new type of 
digital service ecosystem.  
3.4.  In addition, Mr Matusow noted that current market surveillance and conformity assessment 
procedures do not properly address such challenges associated with digital services. He therefore 
stressed the i mportance of developing coherent certification and labelling systems and promoting 
capacity building within the policy -making community.  He also emphasized the need for the 
extension of TBT principles to digital services as a unique case as they differ fro m both goods and 
traditional services as contemplated existing agreements.  
3.5.  Ms Humera Ma lik (Canada )6 spoke  about trade barriers and AI regulations from the 
perspective of SMEs. She noted that SME AI software companies face various regulatory challenges 
such as: (i) high compliance costs; (ii) lack of technical expertise to navigate complex regulations; 
(iii) difficulties in understanding regulations across markets ; and (iv) divergent regulatory  
approaches to AI regulations. In this context, Ms Malik noted that simplified and internationally 
harmonized regulations and conformity assessment procedures, financial incentives and technical 
assistance would help small companies to improve their regula tory compliance. In addition, she 
stressed that SMEs should have a voice in the process of developing regulations and standards on  
AI.  
3.6.  Mr Aitor Montesa Lloreda  (European Union)7 spoke about the regulation of digital 
technologies under the TBT Agreement f ocusing on specific challenges that cybersecurity and AI 
measures pose to the TBT Agreement framework. He noted that the TBT Agreement covers measures 
that apply to digital technologies , including measures that to a large extent affect the supply of 
servic es, such as measures on cybersecurity or AI systems, provided that they impose technical 
requirements, or set up standards or conformity assessment procedures, with regard to products.  
3.7.  With respect to cybersecurity, he said that many countries encourage m anufacturers or 
providers of ICT products to take protective measures at the earliest stages of design, at the time 
of placing on the market and throughout the lifetime of the product, to ensure that such products 
adapt to future cybersecurity requirements . In addition, cybersecurity certification plays an 
important role in increasing trust and security in ICT products and should be designed in line with 
the TBT Agreement. With respect to AI systems, he explained that they may pose risks not only to 
the tra ditional public interests normally pursued by the measures covered by the TBT Agreement, 
such as health and safety, but also to human dignity, private life and personal data, among others. 
Regulators may thus subject AI systems embedded in products to mand atory requirements which 
should be non -discriminatory, proportionate, and effective, in line with the TBT Agreement. To 
ensure trustworthiness, high -risk AI systems could be subject to a conformity assessment prior to 
their placing on the market and whenev er a change may affect its compliance with relevant 
requirements.  
3.8.  Relatedly, he noted that there is a high risk of regulatory fragmentation  on cybersecurity and 
AI, and, therefore,  international  standardisation should play a strong role in the development of 
regulations  on such issues . At the same time, it is important to be aware of the limits of 
standardisation in this area  considering divergences in the societal values that are prevalent in ea ch 
jurisdiction.  
3.9.  Ms Rebecca Anselmetti (United Kingdom)8 described the UK approach to AI regulation. She 
said that while AI has a great potential of benefitting the society, we need to be conscious of 
emerging risks associated with  the AI use. Against th is background, the United Kingdom has 
develop ed AI regulatory framework which will help to (i) enable responsible innovations; (ii) avoid 
unnecessary burdens for businesses and regulators; (iii) foster public trust in AI; (iv) keep pace with 
ever-evolving nature of AI; and (v) design clear rules on AI. Among the important components of 
AI framework will be the cross -cutting principles for responsible AI with good governance across the 
life cycle  and tools for trustworthy AI (e.g. technical standards and ass urance).  
 
6 CEO, Canvass AI, Canada.  
7 Deputy Head of U nit, Regulatory cooperation and Public procurement, DG TRADE, European 
Commission.  
8 Senior Policy Advisor, Office for Artificial Intelligence.  G/TBT/GEN/356  
 
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  3.10.  Ms Anselmetti also highlighted the importance of international collaboration and 
interoperability in the area of AI. In this context, she noted that the United Kingdom recognizes the 
importance of working closely with global partners to shape int ernational governance and regulation 
on AI. She also added that tools for trustworthy AI will play a critical role in enabling the responsible 
adoption of AI by supporting the implementation of regulatory framework and boosting international 
interoperabili ty. Relatedly, Ms Anselmetti announced that the United Kingdom will host the first 
global AI summit in 2023 to drive international action to guarantee safety and security of AI.  
3.11.  Mr Jesse Riddell  (Australia)9 presented on the role of international standards for responsible 
AI. He noted that while we do not yet fully understand the nature of AI, different countries are 
already develop ing regulatory solutions to harness the benefits and respond to the risks asso ciated 
with AI. In order to avoid regulatory divergence across countrie s, he said, consensus -based 
international standards must be the essential component in developing AI regulations . The use of 
international standards will also  facilitate free flow of di gital solutions, ensure harmonization and 
interoperability  and promote trustworthiness and confidence in emerging technologies . In this 
context, he provided an overview of work of ISO/IEC JTC 1/SC 42 Artificial Intelligence , the 
international technical com mittee that sets standards in the area of AI. The committee has already 
published 17 standards and currently works on developing 30 more standards  on AI .  
3.12.  In addition, Mr Riddell noted that national and international collaboration and capacity building 
is necessary to uplift standards awareness and adoption . With these considerations in mind, Australia 
established the Responsible AI Network  that is aimed at uplifting the practice of responsible AI across 
Australia's commercial sector and jurisdi ctions.   
4  COMMENT BY THE MODERATOR  
4.1.  It was a pleasure to moderate the discussion around regulatory cooperation between Members 
on Intangible Digital Products. I  would like to thank Members for putting forward an excellent group 
of experts and effectively mak ing my role an easy one . I would also like to thank all speakers for 
their insightful and thought -provoking contributions, as well as the participants for their active 
engagement in the discussion and for the many questions you posed to our speakers. Final ly, I would 
like to express my sincere appreciation to the Secretariat and the interpreters for your support 
throughout the process.   
4.2.  Over the past few days, I have received very positive feedback from participants. With this in 
mind, I believe that the TB T Committee should continue and deepen its discussions and work on this 
important topic.  
4.3.  I have been asked to share with you a number of key takeaways from the thematic session:  
• In contrast to "traditional" goods, regulating intangible digital products  present unique 
challenges given that their properties or functions may constantly change throughout their 
life cycle or that they entail addressing various "non -typical" risks or concerns that may vary 
in relevance across Members (e.g. privacy, ethics, moral ity, and other "societal" values). In 
this context,  speakers stressed that regulators should invest in more mature regulatory 
measures to account for unique characteristics of intangible digital products.  
 
• Although we do not yet fully understand the benef its and risks of emerging digital 
technologies, various regulations are nonetheless currently being developed at national or 
regional levels. This, coupled with the unique nature of these technologies of raising 
non-typical (and potentially country -specifi c) risks, is resulting in a sort of global regulatory 
"spaghetti  bowl". There is, therefore, a real danger  of regulatory fragmentation in this area, 
which can, in turn, block opportunities and benefits associated with such novel products, 
undermine public trust, and lead to an increase in the digital divide.  
 
• In this context, one clear message was about the importance of international standards as 
a fundamental piece of the regulatory puzzle, including as a basis for AI regulations (e.g. for 
promoting "responsible" AI). Consensus -based international standards a re key for ensuring 
the necessary interoperability across markets, which would facilitate innovation, trade, and 
the free flow of digital solutions.  
 
9 Senior Manager, International Partnerships, Standards Australia.   G/TBT/GEN/356  
 
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  • At the same time, we need to be aware of the limits of standardisation in this area, as these 
new digital technologies raise certain "non -typical" risks and concerns. This means that 
standardisation may not be always suitable for addressing certain regulatory divergences in 
this area, in particular in terms regulations addressing "societal values" the relative  
importance of which may vary across Members. By no means does this imply that 
standardization has no place here, as one could still focus on harmonizing "technical 
solutions" as a pathway to address concerns.  
 
• Relatedly, speakers said that, while standar ds move quicker than the law, technological 
innovations move even quicker than standards . With this in mind, we need to be realistic 
about the fact that the development of international standards on, for example AI, won't 
happen overnight and that we shoul d therefore adapt our regulatory approaches and 
solutions accordingly.  
 
• Speakers also highlighted the importance of closer international cooperation as an effective 
way to shape international and inclusive digital governance. Indeed, international 
collabo ration is essential to promote standards' awareness and adoption. Relatedly, speakers 
noted that regulators should not operate in a vacuum, but rather work closely with tech 
industries, including SMEs, as well as civil society to develop high -quality regul ations and 
standards.  
 
• This underscores the importance of the TBT Agreement for regulations on intangible digital 
products, as the Agreement can ensure that Members do not create discriminatory or 
unnecessarily trade -restrictive regulations on these produ cts. In addition, leveraging and 
complying with powerful transparency obligations under the TBT Agreement can help to 
ensure regulatory harmonization in this area or, if harmonization is not possible, to seek 
other forms of regulatory coherence and coopera tion. 
 
• We also discussed the need and particular importance for capacity building within policy 
makers to better understand digital technologies. Regulators need to have capacities and 
skills in the form of, for example, methods for traceability, auditabil ity, market surveillance 
and enforcement of regulations on these new products. This is particularly important for 
digital technologies that, as mentioned earlier, constantly evolve in a very fast pace.  
 
• Finally, and I  have deliberately left this to the end, we heard about regulatory challenges 
faced by SMEs such as high compliance costs, lack of technical expertise to navigate complex 
regulations, difficulties in understanding regulations across markets and divergent 
regulatory approaches to AI regulatio ns. In this context, the SME representative noted that 
simplified and internationally harmonized regulations and technical assistance would help 
small companies to improve their regulatory compliance. As I noted earlier, it was stressed 
that SMEs should ha ve a voice in the process of developing regulations and standards on 
intangible digital products.  
 
4.4.  As you can see, this was a very productive and comprehensive thematic session. My thanks 
once again to the Secretariat for your support . I very much look for ward to future discussions and 
work at the TBT Committee on this important topic.  
__________