Standard International Trade Classification Revision 4

[Pages:36]Department of Economic and Social Affairs Statistics Division

ST/ESA/STAT/SER.M/34/REV.4

Statistical Papers

Series M No. 34/Rev. 4

Standard International Trade Classification Revision 4

The Department of Economic and Social Affairs of the United Nations Secretariat is a vital interface between global policies in the economic, social and environmental spheres and national action. The Department works in three main interlinked areas: (i) it compiles, generates and analyses a wide range of economic, social and environmental data and information on which States Members of the United Nations draw to review common problems and to take stock of policy options; (ii) it facilitates the negotiations of Member States in many intergovernmental bodies on joint courses of action to address ongoing or emerging global challenges; and (iii) it advises interested Governments on the ways and means of translating policy frameworks developed in United Nations conferences and summits into programmes at the country level and, through technical assistance, helps build national capacities.

NOTE Symbols of United Nations documents are composed of capital letters combined with figures. Mention of such a symbol indicates a reference to a United Nations document.

ST/ESA/STAT/SER.M/34/Rev.4

UNITED NATIONS PUBLICATION Sales No.E.06.XVII.10 ISBN 92-1-161493-7

Copyright ? United Nations, 2006 All rights reserved

Contents

Page Introduction

Historical background . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

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Standard International Trade Classification, Revision 4

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General purpose . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

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Revision guidelines . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

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Summary of changes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

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Abbreviations and symbols . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

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Classification scheme of SITC, Revision 4 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

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Standard International Trade Classification, Revision 4 . . . . . . . . . . . . . . . . . . . . . . . . . . . .

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Append ices I. Correspondence table between the subheadings of the Harmonized Commodity Description and Coding System, fourth edition (HS07), and the basic headings of SITC, Rev. 4 II. Correspondence table between the headings of SITC, Rev. 4, and SITC, Rev. 3 III. Correspondence table between the headings of SITC, Rev. 3, and SITC, Rev. 4

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Standard Interna tional Trade Classification, Revision 4 iv

Standard Interna tional Trade Classification, Revision 4

Introduction

Historical background

1. Although the search for greater comparability of international merchandise trade statistics had been going on for a very long time, it was not until the 1930s that significant developments directed towards the solution of the problem took place. In 1938, the League of Nations published the report of its Committee of Statistical Experts, Minimum List of Commodities for International Trade Statistics.1 The League's Minimum List was based on the 1937 revision of the League's Draft Customs Nomenclature.2

2. Since the appearance of the Minimum List, there had been many changes both in the structure of international merchandise trade and in the needs of countries, intergovernmental bodies and international agencies for greater international comparability of trade data. Consequently, the United Nations Statistical Commission at its third session had recommended that a revision of the League's Minimum List be prepared. In cooperation with Governments and with the assistance of expert consultants, the United Nations Secretariat drew up the 1950 edition of the United Nations Standard International Trade Classification (referred to below as the "original" SITC).3 In its resolution 299 B (XI) of 12 July 1950, the Economic and Social Council, upon the recommendation of the Statistical Commission at its fifth session held in May 1950, urged all Governments to make use of the Standard Classification by adopting it. By 1960, many countries were compiling international merchandise trade data according to the original SITC or national classifications correlated to it and major international organizations had adopted SITC as a basis for the reporting of international trade statistics. Some countries also used the original SITC as the basis of their customs nomenclatures.4

3. At the same time, in many European countries and in a number of countries outside Europe, customs tariff nomenclature was based on the 1955 Tariff Nomenclature (BTN) of the Customs Cooperation Council.5 BTN was an internationally agreed nomenclature by which products were grouped according to the nature of the material of which they were made, as had been traditional in customs nomenclatures. Consequently, data based on BTN had to be regrouped in order to provide economic statistics, since for economic analysis it is necessary that aggregates be available for classes of goods such as food, raw materials, chemicals, machinery and transport equipment and also for groupings of commodities by stage of fabrication and by industrial origin. The regrouping of BTN data into the form of the original SITC involved numerous subdivisions of BTN items. Considerable statistical resources were therefore required to regroup, giving rise to serious inconveniences for the developed countries and almost insuperable obstacles for the countries whose statistical resources were limited, when they attempted to use both the original SITC and BTN.

1 League of Nations, 1938 (II.A.14; and corrigendum, 1939). 2 League of Nations, 1937 (II.B.5), vols. 1 and 2. 3 Statistical Papers, No. 10/Rev.1, June 1951(United Nations publication, Sales No. 51.XVII.1). 4 See, for example, the Nomenclatura Arancelaria Uniforme Centroamericana (NAUCA), published by the United Nations Economic Commission for Latin America, Mexico City, 1953. 5 Nomenclature for the Classification of Goods in Customs Tariffs, Brussels, 1955; and Explanatory Notes to the Brussels Nomenclature, Brussels, 1955.

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4. To improve this situation a group of experts from countries and intergovernmental agencies using both the original SITC and BTN prepared SITC, Revised.6 The revision required some modifications of both classifications. In the case of BTN, this consisted of the subdivision of a number of BTN items and the provision of a commentary in the Brussels Explanatory Notes on the subheadings thus created. These steps taken by the Customs Cooperation Council thereby made the precision of definition achieved by BTN applicable to SITC and provided to countries with a system offering the advantages of, at the same time, an internationally agreed tariff nomenclature and an internationally agreed statistical classification. A reciprocal one-to-one correspondence was thus achieved between SITC, Revised, and BTN. The Statistical Commission at its eleventh session recommended that countries compiling data according to the original SITC shift, if possible, to SITC, Revised, and that countries beginning to compile internatio nal trade data for the first time do so, if possible, on the basis of SITC, Revised.7

5. SITC, Revised, represented an improvement over the original SITC. Nevertheless, the increase in the volume of trade and the changes that had taken place in geographical as well as commodity patterns since l960 had, by l968, created a demand for a further revision of SITC. Thus, in l969, pursuant to a recommendation of the Statistical Commission, 8 the revision process of SITC was begun. The final draft of SITC, Revision 2, prepared by the Secretariat, based on the opinions of Governments and international organizations, was recommended for adoption by the Statistical Commission at its eighteenth session in October l974. On 7 May 1975, the Economic and Social Council adopted resolution 1948 (LVIII) recommending SITC, Revision 2, 9 for international use. The subsequent revision of the l972 edition of BTN to produce the Customs Cooperation Council nomenclature (CCCN)10 ensured a relationship encompassing a one-to-one correspondence between the subdivisions of the CCCN headings and the basic headings of SITC, Revision 2.

6. There were, however, a number of users who found the subdivisions of CCCN (and thus SITC, Revision 2) insufficient for their needs.11 There was also an expressed need for the harmonization of economic classifications.12 Partly to satisfy these needs, the Customs Co-operation Council in May l973 undertook responsibility for the development and completion of a harmonized commodity description and coding system. The work resulted in the revision of CCCN and the expansion of its four-digit categories into the Harmonized Commodity Description and Coding System (HS), comprising 5,019 sixdigit subheadings.13

7. At its twenty-first session, in January l981, the Statistical Commission had taken note of the fact that a third revision of SITC would have to be made available when both the revised CCCN and HS came into force in 1988.14 Accordingly, later that year, the United Nations Secretariat commenced

6 Statistical Papers, Series M, No. 34, 1961 (United Nations publication, Sales No. 61.XVII.6). 7 See Official Records of the Economic and Social Council, Thirtieth Session, Supplement No. 12 (E/3375 and Add.l). 8 Ibid., Forty-fourth Session, Supplement No. 10 (E/4471). 9 Statistical Papers, No. 34/Rev.2 (UN publication, Sales No. E 75.XVII.6). 10 Nomenclature for the Classification of Goods in Customs Tariffs, 5th ed., Brussels, 1976. 11 United Nations Statistical Office and Statistical Office EC Joint Working Group on World Level Classifications, "A Harmonization Commodity Description and Coding System for Use in International Trade" (UNSO/SOEC/1/2). 12 United Nations Secretariat, "The Harmonization of Statistical Classifications" (ST/ESA/STAT/78). 13 Customs Co-operation Council, The Harmonized Commodity Description and Coding System, Brussels, 1985. 14 Official Records of the Economic and Social Council, 1981, Supplement #2 (E/1982/12).

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preparation of SITC, Revision 3, based on the principle that every effort should be made to maintain its general character and structure but taking into account the need for its harmonization with the revised CCCN, the International Standard Industrial Classificatio n of All Economic Activities (ISIC) and a Central Product Classification (CPC) which was being developed jointly by the Statistical Office of the European Communities and the United Nations Statistical Office.

8. Employing the headings of HS as building blocks, in consultation with experts from Governments and interested international organizations and with the assistance of expert groups, the United Nations Statistical Office produced a third revision of SITC taking into account the need for continuity with the previous versions of SITC as well as the following considerations:

(a) The nature of the merchandise and the materials used in its production; (b) The processing stage; (c) Market practices and the uses of the product; (d) The importance of the commodity in terms of world trade; (e) Technological changes.

The final draft of SITC, Revision 3, was approved by the Statistical Commission at its twenty-third session, in February l985. 15 The Economic and Social Council, on its resolution 1985/7 of 28 May l985, recommended that Member States should report internationally data on external trade statistics according to SITC, Revision 3. 16

Standard International Trade Classification, Revision 4 General purpose

9. In 1993, the Statistical Commission endorsed the use of HS at the national level in compilation and dissemination of international merchandise trade statistics17; and in 1999, the Commission confirmed its recognition of SITC as an analytical tool. 18

10. By July 2005, the original HS had been amended by the World Customs Organization (WCO) four times. Three amended editions of the HS had gone into force, on 1 January 1992, 1 January 1996 and 1 January 2002. The fourth amended edition of the HS (HS07) will be effective beginning 1 January 2007. HS07 has 5052 subheadings of which 4208 are subheadings from the original HS88. Eight hundred and forty- four non-original subheadings (17 per cent) were introduced in the subsequent HS editions (1 in 1992, 267 in 1996, 316 in 2002, and 260 in 2007).

11. In the past, in order to maintain continuity in the SITC, Revision 3, series, the United Nations Statistics Division had issued appropriate correlation tables between SITC, Revision 3, and each new edition of HS. However, a strict period-to-period comparability was being lost for a growing number of series owing to significant changes in the HS classification scheme. At the same time, the majority of countries and international organizations continued to use SITC for various purposes, such as study of

15 See Official Records of the Economic and Social Council, 1985, Supplement No. 6 (E/1985/26), Chapter IV, para 57 (d) 16 Statistical Papers, No. 34/Rev.3 (United Nations publication Sales No. E.86.XVII.12 and corrigenda) 17 See Official Records of the Economic and Social Council, 1993 Supplement No. 6 (E/1993/26), Chapter XI, para 158 18 Ibid., 1999, Supplement No. 4 (E/1999/24), Chapter II, para. 24 (c)

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Standard Interna tional Trade Classification, Revision 4

long-term trends in international merchandise trade and aggregation of traded commodities into classes more suitable for economic analysis. In this context, the Statistical Commission, at its thirty-fifth session (2-5 March 2004), agreed with the conclus ion of the inter-agency Task Force on International Merchandise Trade Statistics that the fourth revision of SITC was needed in view of accumulated changes in HS. 19 Accordingly, in mid-2004, the Statistics Division began preparation of SITC, Revision 4. The revision process was coordinated with the ongoing revisions of ISIC and CPC with a view to harmonizing these classifications as much as possible.

12. The present pub lication provides SITC, Revision 4, headings and corresponding HS07 subheading(s). Codes of basic SITC headings are given in the "Basic heading" column, descriptions of sections, divisions, groups, subgroups and basic headings are given in the "Description" column; and codes of the corresponding HS07 subheading(s) are given in the "HS07" column. Appendix I is a correspondence table correlating the subheadings of HS07 to the basic headings of SITC, Revision 4; and appendix II is a correspondence table correlating SITC, Revision 4, to SITC, Revision 3. Appendix III, which represents a simple mechanical transposition of appendix II is a correspondence table correlating SITC, Revision 3, to SITC, Revision 4.

Revision guidelines

13. The scope of SITC, Revision 4, remains the same as that of SITC, Revision 3, that is to say SITC, Revision 4, covers all goods classifiable in HS except for monetary gold, gold coin and current coin. All SITC, Revision 4, basic headings (except for 911.0 and 931.0) are defined in terms of HS07 subheadings. Since SITC is now recommended only for analytical purposes, there was no need ?except in several special cases- to create new basic headings in SITC, Revision 4, that would be in one-to-one correspondence with the new HS07 subheadings.

14. As a general rule, an SITC, Revision 3, basic heading was deleted if (a) corresponding HS88 subheadings had been deleted from HS07 or (b) its scope could not be defined in terms of HS07 subheadings without significant change (this occurred when involved HS88 subheadings were partially correlated to several HS07 subheadings). A new SITC, Revision 4, basic heading was introduced if (a) several new HS subheadings could be grouped in an economically meaningful way and such a group fitted into the classification scheme of SITC with no (or minimal) changes in the scope of the existing SITC, Revision 3, headings; (b) some HS subheadings merited separate identification in order to better reflect commodity structure and/or practice of customs in recording of international trade; or (c) owing to action taken in accordance with (a) and (b), some HS07 subheadings could not be correlated to the existing basic SITC, Revision 3, headings. In the process of revision, the scope of some headings was modified. When such a modification was deemed significant, the heading involved was assigned a new code.

Summary of changes

15. SITC, Revision 4, retains the overall structure of SITC, Revision 3, and consists of the same number of sections, divisions and groups. The changes made were at the level of basic headings and some subgroups. Two hundred thirty-eight basic headings of SITC, Revision 3, were deleted in most cases for the reasons stated in paragraph 14 above; and 87 new basic headings have been introduced. As a result of those deletions and additions, SITC, Revision 4, contains 2,970 basic he adings.

19 (Ibid. 2004, Supplement No. 4 (E/2004/24), chapter V, para. 4 (i).

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