Harmonized Commodity Description Research Articles

Legislative Purpose — The Unwritten Criterion in Classifying Goods: A Case Study of Israel Law

The International Convention on the Harmonized Commodity Description and Coding System (HS Convention) or HS, which seeks to establish uniform rules for the classification of products for customs and indirect tax purposes, is considered a resounding success. Its main objective is to ensure that a given product is classified in the same way in all World Customs Organization (WCO) member countries. The HS Convention does not specify the duty rates on each product, leaving it to the discretion of the member states, nor does it consider the legislative purpose of each country — to tax or exempt a product. This paper examines the issue of legislative purpose and concludes that considering the domestic legislative purpose when classifying leads to a lack of uniformity in the classification method and undermines the principle underlying the HS Convention. The issue has not been widely discussed in the literature; therefore, this paper makes a novel contribution to the literature on this topic.

Does the "Belt and Road Initiative" benefit the environment? Insight from analysis of intra-industry trade in environment goods.

The expansion of the Belt and Road Initiative (BRI) has raised a wide range of concerns about its environmental impact. Therefore, from the perspective of environmental impacts, this study used the two-way fixed effect staggered differences in differences (TWFE Staggered DID) method to examine the impact of the BRI on the Environment Goods (EGs) intra-industry trade (IIT) between China and other Belt and Road (B&R) countries, including a sample of 191 countries, covering the period from 2010 to 2019 for eliminating the impact of COVID-19 and the financial crisis in 2008 and 2009. Because only 135 countries signed a Memorandum of Understanding between 2010 and 2019, this study treated these B&R countries as the study group, and the other 73 countries (non-B&R countries) as the control group. This study described EGs using the 54 6-digit code Environment Goods in Harmonized Commodity Description and Coding System listed in the "APEC LIST OF ENVIRONMENT GOODS" published by the Asia-Pacific Economic Cooperation in 2012, and used the intra-industry trade index proposed by Grubel and Lloyd in 1971 to measuring dependent variable. The research results indicated that the BRI has significantly promoted bilateral EGs IIT. The mechanism test implied that, in addition to direct impacts, the BRI also has indirect impacts by boosting the energy restructuring of B&R countries. These results prove that the BRI has positive impacts on the environment. The heterogeneity test showed that there is a heterogeneous impact depending on the type of IIT, product categorization, B&R countries' income levels, and geographic environment. This study not only gives theoretical and empirical evidence of the positive environmental impacts of the BRI, but also provides practical guidance for the development of EGS IIT between China and B&R countries, thereby contributing to global carbon emissions reduction and environmental governance to some degree.

COMPETITIVENESS OF THE TURKISH AGRI-FOOD SECTOR IN TRADE WITH THE EUROPEAN UNION

The purpose of this study was to assess the competitive position of the Turkish agri-food sector in trade with the European Union. The study focused on agri-food products arranged as per the Harmonized Commodity Description and Coding System (HS1-24), and relied on data collected in two years, 2010 and2022, retrieved from UNCTAD and Eurostat resources. The authors used the Widodo product mapping scheme to arrange the products. The results provide grounds for concluding that Turkey and the EU witnessed growth in bilateral agri-food trade. Between 2010 and2022, the exports from Turkey to the EU increased by89% whereas imports went up by84%. In the years covered by the study, Turkey had the greatest comparative advantage and the highest degree of export specialization in the following product groups: preparations of vegetables, fruit and nuts (HS20), fish and crustaceans (HS03), vegetables (HS08) and edible fruit and nuts (HS07). Conversely, Turkey showed no comparative advantages in (and was a net importer of): cocoa and cocoa preparations (HS18), cereals (HS10) and meat and edible meat offal (HS02). The mix of products traded can be viewed as rational and consistent with the classical theory of trade. Turkey’s comparative advantages provided a source of a beneficial specialization. In turn, imported products were those in which Turkey is not self-sufficient.

The International Convention on the Harmonized Commodity Description and Coding System: Legal Pillar Behind the Harmonized System

The International Convention on the Harmonized Commodity Description and Coding System (HS Convention) is an international agreement that applies a systematic and manner to describe commodities in global trade. It effectively provides a universal language that communicates trade matters amongst stakeholders. Despite having a significant impact on international trade, little is known about the legal texts of the HS Convention. therefore, therefore examines the architecture of the HS Convention, discusses its objectives, analyses its impact. Coding, Commodities, Customs Cooperation Council, Description, Harmonized, Harmonized System (HS), HS Convention, Nomenclature, Trade facilitation

IMPROVEMENT OF THE HARMONIZED COMMODITY DESCRIPTION AND CODING SYSTEM IN THE CIRCULAR ECONOMY ENVIRONMENT

The article is devoted to the concept of a circular economy, which has attracted significant attention from the government and business as a sustainable approach to resource management and economic development. The author analyzed the implemented and planned stages of the transition to a circular economy within the framework of existing business models, as well as the potential for further development and the problems associated with such transition. Based on the data obtained, the role of the Harmonized Commodity Description and Coding System (HS) in ensuring identification, traceability and correct customs control of recycled goods. The material discusses several areas for improving the HS in this area: the development of specific codes for the accurate classification of secondary goods, the introduction of terminology to accurately identify goods within the circular economy, as well as the integration of the HS with other international instruments, such as the Basel Convention, to ensure full control of secondary goods.
 As a conclusion, this article argues for the need to discuss circular economy issues at future sessions of the World Customs Organization (WCO) and review the existing structure of the HS.

What Did Turkey Do in terms of Export Competitiveness After 2000?

Competitiveness relates to an economy's ability to produce products efficiently and effectively, enabling it to compete in domestic and global markets. It encompasses factors such as productivity, innovation, quality, cost-efficiency, and market access. Competitive economies are more likely to attract investment, create jobs, and achieve higher levels of economic development. Especially competitiveness rankings provide opportunity of benchmarking, effective policy guidance, attractive investment, global comparison and eveluation. In this respect, this study has been conducted to examine Turkey's export structure in the period 2001-2021 within the framework of Harmonized Commodity Description and Coding System and to compare its competitiveness with the Revealed Symmetric Comparative Advantage Index (RSCA). The data used to calculate the RSCA values are taken from TradeMap, the database of the International Trade Centre (ITC). The comparison was made with Turkey's highest trading partners, the countries with the largest share in Turkey's export. While Turkey had RSCA in 37 products in 2001, it increased to 45 products in 2021. Similar to Podoba et al. (2021), product groups are categorised according to observable trends in RSCA values. In 2001, 5 products with RSCA decreased, and in 2021, 12 products with comparative advantage replaced them

Expert Examination of Leather in International Trade: Ukrainian Experience

In the article the state of the market, volumes of export and import of leather are analyzed. The procedure of leather identification expert examination for customs purposes in international trade is showed. Identification expert examination of leather was carried out and its results were issued for customs purposes. The code of leather according to the Harmonized Commodity Description and Coding System (HS) and the Ukrainian Classification of Goods for Foreign Economic Activity (UСGFEA) is defined based on the results of identification expert examination.

Harmonized Commodity Description and Coding System as the Basis of Commodity Nomenclature of Foreign Economic Activity of EAEU: Problems and Future Focus

The article presents the results of a study of the problems of using the Harmonized System (HS) for Description and Coding of Goods as the main element of the Commodity Nomenclature of Foreign Economic Activity (CN FEA) of the EAEU. Given the global nature of the nomenclature, the author focuses on the practical features of using the system in international trade and customs purposes. Based on the analysis of literary sources, the author highlighted the main problems of using the HS and CN FEA of the EAEU. In the work, quantitative and qualitative research methods were used: a comparative semantic analysis of the use of a product name allowed the author to identify difficulties in application and incomplete compliance with the requirements of international trade. An empirical study of the classification characteristics of goods showed illustrative examples characterizing the presence of outdated and inappropriate terms and concepts that do not correspond to modern practice, which limits the use of the texts of the items of the nomenclature. The investigated compliance of the classification characteristics of goods used in the HS and CN FEA of the EAEU showed a lack of uniformity between the identification criteria and marking information in technical regulations, in terms of use for the purposes of compliance with prohibitions and restrictions. The structural analysis of the HS and CN FEA of the EAEU showed examples of the lack of structural uniformity in the assignment of goods made of the same material.The study of the possibility of using the HS and CN FEA of the EAEU for search queries showed restrictions on their use for automatically determining the product code. Based on the totality of the study, the author has shown the discrepancy between the HS and CN FEA of the EAEU with the modern requirements of international trade in terms of the application of concepts, classification signs, systematization and the growing need for a radical revision of the HS.

Russian intra-industry trade: Trends in recent decades

The article reveals the trends of Russian intra-industry trade in the period 2001–2018 with the twenty largest partners, united in three groups, namely developed economies, developing countries and CIS states. Intra-industry trade was estimated using data for export and import for each of the 6-digit Harmonized Commodity Description and Coding System product groups. The authors use the Fontanier — Freudenberg and Grubel — Lloyd indices to determine the share of horizontal, vertical and high-quality vertical IIT in agricultural products, raw materials and manufactures. It was revealed that Russia’s intra-industry trade including high-quality vertical IIT, both in terms of value and intensity is highly concentrated on the CIS countries, especially Belarus. A vertical type of intra-industry specialization dominates Russia’s intra-industry trade with all groups of countries, which generally corresponds to global trends. However, the horizontal type of specialization is most pronounced in trade with the CIS countries. It was found that most of the intra-industry exchange takes place in trade in manufactures, mainly with Belarus. The intensity of intra-industry trade in all commodity groups with both developed and developing countries remains very low and has not changed over the period under review. It is noted that during the 2010s, the intensity of all types of intra-industry trade with Belarus and Kazakhstan increased, primarily trade in industrial and agricultural goods, which is largely due to integration. The authors conclude that further integration with this group of countries contributes to the development of intra-industry specialization, export sophistication and the realization of technological advantages.

Problems of Commodity Nomenclatures Implementation in the International Trade on the Example of Chapter 56 “Nonwovens” of the EAEU Commodity Nomenclature of Foreign Eco nomic Activity

The article examines the problems of using the Commodity Nomenclature of Foreign Economic Activity. The following problems are highlighted: the lag of the Harmonized Commodity Description and Coding System from the development of technologies; disagreement of countries with the decisions of the Harmonized System Committee; mistakes in texts; difficulties with the implementation of the classification decisions of the Federal Customs Service and Eurasian Economic Commission. Discrepancies in classification lead to distortion of mirror statistics of foreign trade and make it possible to identify “risk” and “cover” goods. The purpose of the work was to compare the imports by the Russian Federation nonwovens of chapter 56 from three countries — the main exporters at the level of commodity headings and subheadings. The hypothesis was tested: since chapter 56 is not the leading one in the volume of imports, there will be no significant discrepancies in the mirror statistics. Research method was comparison of data on Russian imports from a trading partner country and corresponding data on exports of a trading partner country to Russia. Data source is Trade Map of the International Trade Center. Headings 5602 (felt) and 5603 (nonwovens) were considered, which include goods that are similar in structure and properties, as well as heading 5607 — twine, cordage, ropes and cables. These goods are imported from both European and Asian countries. However, only when importing from the Asian direction — from China — discrepancies in the mirror statistics were found. It is shown that goods of “risk” (heading 5602) were imported into Russia from China in 9 times less than exported from China, and goods of “cover” (heading 5603) were imported from China by 5% more, than exported by China. The subheading of twine, cordage, ropes and cables made of synthetic fibers (570650) also represents risk goods, imports of which are 3 times less than exports from China. There are several cover headings that include similar goods with a lower duty rate. Comparison of duties showed that the main reason for classification errors leading to distortion of mirror statistics is the deliberately wrong choice of the code in the presence of close alternatives, which allows to reduce the customs payment. The hypothesis that group 56 will not show significant discrepancies in mirror statistics has not been confirmed.

Sustainable Production, Non-Tariff Measures, and Trade Performance in RCEP Countries

The main objective of this paper is to reinvestigate the impacts of non-tariff measures (NTMs) on bilateral exports among Regional Comprehensive Economic Partnership (RCEP) countries. The study adds to the literature in two areas. First, we calculate coverage ratios for NTMs related to specific sustainable development goals (SDGs) imposed on bilateral trade between RCEP member countries. Second, to avoid aggregation bias, the analysis covers four major sectors, namely agrifood, health, logistics, and other manufacturing. The results of a Poisson pseudo maximum likelihood (PPML) regression in a gravity model, using average import data from 2016 to 2018 at the Harmonized Commodity Description and Coding Systems (HS) two-digit level (97 subsectors), show that the effects of SDG-related NTMs vary by sector. NTMs related to SDG 3 (good health and well-being) distort trade in health but enhance trade in logistics. NTMs related to SDG 12 (responsible consumption and production) have a negative impact on logistics but a positive impact on other manufacturing exports. The findings provide new perspectives on the varying impacts of SDG-related NTMs on trade. Interestingly, the study finds that NTMs addressing SDGs 3 and 12 have positive trade impacts. Policymakers should, however, regulate NTM implementation, to minimize negative impacts and ensure that domestic firms comply to promote sustainable production.

A Study on the Construction Method of HS Item Classification Decision System Based on Artificial Intelligence

Industrial Revolution means the improvement of productivity through technological innovation and has been a driving force of the whole change of economic system and social structure as the characteristic of technology as the tool of this productivity has changed. Since the first industrial revolution of the 18th century, productivity efficiency has been advanced through three industrial revolutions so far, and this fourth industrial revolution is expected to bring about another revolution of production. In this study, the demand for the introduction of artificial intelligence(AI) technology has been increasing in various business fields due to the rapid development of ICT technology, and the classification of HS(harmonized commodity description and coding system) items has been decided using artificial intelligence technology, which is the core of the fourth industrial revolution. And it is enough to construct HS classification system based on AI technology using inference and deep learning. Performing the HS item classification is not an easy task. Implementation of item classification system using artificial intelligence technology to analyze information of HS item classification which is performed manually by the current person more accurately and without any mistake, And the customs administrations, customs offices, and customs agencies, it is expected to be highly utilized in the innovation of trade practice and the customs administration innovation FTA origin agent.

Export deliveries of certain types of products of the foundry and metallurgical industry to the countries of the European Union from 2010 to 2019....................................................................................................................

The European Union is one of the main trade partners of Belarus, Russia and Ukraine. This article analyzes the level of export deliveries from these countries and some other countries to the EU over 10 years (2010–2019) of foundry and metallurgical products in accordance with the Harmonized Commodity Description and Coding System (HS Nomenclature) for group 72 «Iron and steel». Data is taken from official statistical reports of the European Union.The first part of the article provides information on exports from Belarus, Russia and Ukraine of products by commodity items 7201–7218,7224, 7228 of group 72, with the list of the three largest exporting countries to the EU by these item and total world exports to the EU. There are 29 commodity items in the group 72, and 20 items have been selected where the role of Belarus, Russia and Ukraine is more significant. If you take all the 29 items, the article is very cumbersome.The second part provides data on exports to the EU from Belarus, Russia and Ukraine and 11 other countries in whole group 72 «Iron and Steel» for 2010–2019 according to HS Nomenclature. A brief analysis of supply trends is made, and some conclusions on exports to the EU of the selected commodity items and group 72 as a whole are presented.

Making Use of Existing International Legal Mechanisms to Manage the Global Antimicrobial Commons: Identifying Legal Hooks and Institutional Mandates

Antimicrobial resistance (AMR) is an urgent threat to global public health and development. Mitigating this threat requires substantial short-term action on key AMR priorities. While international legal agreements are the strongest mechanism for ensuring collaboration among countries, negotiating new international agreements can be a slow process. In the second article in this special issue, we consider whether harnessing existing international legal agreements offers an opportunity to increase collective action on AMR goals in the short-term. We highlight ten AMR priorities and several strategies for achieving these goals using existing “legal hooks” that draw on elements of international environmental, trade and health laws governing related matters that could be used as they exist or revised to include AMR. We also consider the institutional mandates of international authorities to highlight areas where additional steps could be taken on AMR without constitutional changes. Overall, we identify 37 possible mechanisms to strengthen AMR governance using the International Health Regulations, the Agreement on the Application of Sanitary and Phytosanitary Measures, the Agreement on Trade-Related Aspects of Intellectual Property Rights, the Agreement on Technical Barriers to Trade, the International Convention on the Harmonized Commodity Description and Coding System, and the Basel, Rotterdam, and Stockholm conventions. Although we identify many shorter-term opportunities for addressing AMR using existing legal hooks, none of these options are capable of comprehensively addressing all global governance challenges related to AMR, such that they should be pursued simultaneously with longer-term approaches including a dedicated international legal agreement on AMR.

Единообразное толкование товарной номенклатуры как основа регулирования международной торговли

The international trade today is complex and multidimensional. The unambiguous identification of objects in international trade allows us to solve a large number of questions on the regulation and control of the movement of goods, to apply a wide range of measures in a globalizing world economy. The Harmonized Commodity Description and Coding System of the World Customs Organization (HS) is a recognized tool for classifying and coding goods in the international trade. The Commodity nomenclature of foreign economic activity of the Eurasian Economic Union (CN FEA EAEU), based on the HS, is applied in the territory of the EAEU member countries in accordance with the agreement on the EAEU. The CN FEA EAEU fully incorporates the Russian-language version of the HS, as an integral part within the six-digit code. In connection with the linguistic features of the CN FEA EAEU does not fully coincide with the original source in terms of translation. The article presents the results of a study on the comparability of the interpretation of the texts of HS implemented in the CN FEA EAEU. An analysis of the uniformity of the interpretation and the usage of these texts is necessary to provide the regulation of the international trade. The work revealed discrepancies in the interpretation of texts of a number of commodity items. Particular attention is paid to the study of the texts of commodity subheadings containing expansion structures related to similar products used for different purposes. A number of contradictions in the interpretation and understanding of certain terms of the HS, which are widely used in the CN FEA EAEU, have been investigated. The problems of using the conceptual apparatus are revealed by the example of the analysis of the terms “furniture” and “coachwork”. Using the example of fittings, a detailed analysis of the definitions for the classification of parts and accessories of complex technical goods was carried out. In order to establish a uniform application and interpretation of the contents of the subheadings of the CN FEA EAEU it is necessary to provide the compliance with the structural features of a number of texts of commodity positions of the HS. The absence of a unified approach to the translation of texts of commodity items in the CN FEA EAEU having the same structure in the HS has been proved. The results of the study are significant as a basis for ensuring the regulation of the international trade.

The effect of sanctions on Russian agricultural imports

This paper contributes to the methodology of trade policy analysis, specifically to the assessments of non -tariff measures. To quantifying the effects of these measures, the proportion between the variables of two gravity equations, describing the situation before and after the embargo is used. The ratio of imports per unit of the supplier’s GDP over the two compared periods (2013 and 2017) is different for two groups of trade partners, one of which includes free-trade partners while the other spans the rest of the world (with some exceptions). In the presence of the embargo the gap in the average imports per unit of the supplier’s GDP between the two groups is wider. This is a consequence of the emergence of a new trade barrier. This gap allows us to indirectly quantify the trade bans via their tariff equivalent. In this study the methodology is applied to the case of food and agricultural imports. Fish, as well as other products outside chapters 1–24 of Harmonized commodity description and coding system, are excluded. The hypothesis of the study is that the impact of the embargo on the food and agricultural imports does not exceed that of tariff and phytosanitary measures. The study rejects this hypothesis and concludes that the embargo establishes a prohibitive level of protection.

Russia’s Export Specialization in Africa

The paper is devoted to the study of Russia’s export specialization in the countries of Africa in the period from 2001 to 2017. A comprehensive analysis of the dynamics, the commodity and geographical structure of Russian exports to the African continent has been carried out. Using bilateral trade data for product groups at the level of two digits of the Harmonized Commodity Description and Coding System (HS), this study examines the main patterns of comparative advantage in Russia’s trade with the countries of the region in the early 21st century. Based on the calculation results of the bilateral revealed comparative advantage index (RCA), authors identified a group of Russia’s trade partners in Africa, characterized by the largest number of export specialization product groups: Algeria, Angola, Guinea, Egypt, South Africa. Comparative analysis of Russia’s export specialization in Africa with the main partners in terms of trade turnover indicates, that Russia has more diverse comparative advantages in trade with some African countries (17 product groups), than with European ones, such as Germany (9 product groups) and Netherlands (8 groups). The study shows that Russia has export specialization in the following main product groups in African countries: HS 84 ‘Nuclear reactors, boilers, machinery and mechanical appliances; parts thereof ’, HS 85‘Electrical machinery and equipment and parts thereof ’, HS 87 ‘Vehicles other than railway or tramway rolling-stock, and parts and accessories thereof ’, HS 48‘Paper and paperboard’ and HS 10‘Cereals’. The authors revealed, that the intensity of Russia’s export specialization in African countries increases with the augmentation of the technical complexity of products exported. It proves that Russian industrial products have competitive advantages in the African market. The development and strengthening of economic cooperation with Africa is one of the most important direction of non-commodity and non-energy exports expansion and geographical diversification of Russian trade. The paper concludes by discussing the promising avenues for the future Russian-African export partnership.

Revealed comparative advantage for US textiles and apparel

PurposeThe purpose of this study is to identify US textile and apparel (TAP) products and categories that demonstrate export comparative advantage and their respective country destinations.Design/methodology/approachRevealed comparative advantage (RCA) and normalized revealed comparative advantage (NRCA) in the long term (1996-2016) and short term (2010-2016) using two-digit Harmonized Commodity Description and Coding System codes (HS codes) provide an insight into export advantage of TAP products. Non-parametric rank correlation (i.e. Spearman rank correlation) tests consistency between RCA and NRCA. Subsequently, NRCA using four-digit HS codes identify textile sub-categories with export comparative advantage. Bilateral trade data identify export destinations for sub-categories that indicate US export comparative advantage in the short term.FindingsAggregated product-level comparison of RCA and NRCA ranking indicates a consistent positive correlation between the two indices. The disaggregated findings reveal cotton fiber HS5201, artificial filament tow HS5502, non-wovens HS5603, cotton yarn HS5205, carpet and other floor coverings HS5703 and worn clothing HS6309 as sources of US TAP export advantage.Originality/valueThis research provides a comprehensive, current analysis of the US competitive position within the TAP global environment. Incorporation of NRCA into the study’s design demonstrates the flexibility of this measure in a new industry context.

Actual problems of customs classification (on the example of Foreign Economic Activity Commodity Nomenclature of the Eurasian Economic Union)

The subject. The article is devoted to the main problem of customs classification on the example of Foreign Economic Activity Commodity Nomenclature (FEACN) of the EAEU. The purpose of the paper is to define the concept and meaning of classification of goods for customs purposes, the characteristics of the legal basis of FEACN, the identification of the features of cases challenging the decisions of customs authorities on the classification of goods in accordance with the EAEU FEACN. The hypothesis is to confirm or refute the relevance of the problems of customs classification for participants of foreign economic activity, and for customs authorities. The methodological basis for the study: general scientific methods (analysis, synthesis, comparison, description); private and academic (interpretation, formal‐legal). Results, scope. Features of classification of goods in customs declaration, in the implementation of customs control and in other cases regulated by the Customs Code of the EAEU. The classification of goods for customs purposes should be understood as the action taken by the declarant or customs authorities to classify goods as specific commodity items, sub‐ items and sub‐sub‐items of FEACN in accordance with the Basic rules of interpretation and the corresponding digital codes, which has legal significance in determining the amount of customs payments, in the application of non‐tariff regulation measures and in the frame‐ work of customs statistics for the purpose of summarizing data on goods moved. The current FEACN of the EAEU was approved by the decision of the Council of the Eurasian Economic Commission. The FEACN used in the EAEU is derived from the Harmonized commodity description and coding system. In addition, the FEACN of the Commonwealth of Independent States, introduced after the conclusion of the relevant international legal agreement by the former Soviet republics in 1995, acts as the international basis of the EAEU FEACN. Since the size of customs payments depends on the HS code, the majority of disputes between participants of foreign economic activity and customs authorities arise in this category of cases, moreover, their number increases from year to year. Conclusions. As a result of the study, the concept and importance of classification of goods for customs purposes are defined, the legal basis of FEACN is characterized, the features of cases on challenging the decisions of customs authorities on the classification of goods in accordance with the EAEU FEACN are revealed. All of the above indicates the relevance of the problems of customs classification for participants of foreign economic activity, and for the customs authorities.

Export of foundry and metallurgical products from Belarus, Russia and Ukraine to the European Union

The European Union is one of the main trade partners of Belarus, Russia and Ukraine. The export operations between these countries and EU of some items of foundry and metallurgy according to Harmonized Commodity Description (HCD – Group 72 «Iron and Steel») in 2010–2017 was analyzed. The information of three biggest export countries to EU is given on every of the abovementioned positions of HCD. Analysis of trends and variations of export from Belarus, Russia and Ukraine and some conclusions are given in the article.