INTERNATIONAL TRADE CLASSIFICATION SYSTEMS

Steve Johnson¹

Background

Forest product trade is extremely important to many countries. Market and sector studies rely on information on trade and trade flows at the international level. Two main systems exist for categorizing products to ensure consistency of reporting between countries.

Harmonised Commodity Description and Coding System (HS)

Over 170 countries use the HS for reporting trade flows. The HS is administered by the World Customs Organization (WCO), located in Brussels. The latest revision of the HS was in 1996 (HS96). Revisions require a lengthy process of consultation between all members of the WCO. Trade data reported by countries are compiled by the UN Statistics Division (UNSD) in the COMTRADE database.

Standard International Trade Classification (SITC)

The SITC is administered directly by the UNSD. The latest major revision of the SITC was in 1986 (SITC Rev. 3).

Cross-reference between HS96 and SITC Rev. 3

Product	HS 96 Chapter	SITC Rev.3 Chapter
Logs, sawn	44	24
Panels	44	63
Pulp	47	25
Paper	48	64
Furniture	94	82

The Joint Forest Sector Questionnaire contains a complete cross-reference between the two systems. Problems with international trade classification systems

Units

Quantities are usually expressed in weight only; they need to be converted to volumes but no country-specific conversions are provided.

Values are often reported in national currency units; they need to be converted to US dollars requiring a decision on which point in the year to choose exchange rates or what type of average rate is to be used.

Proper analysis needs correct conversions for both volume and value but these are often lacking.

This causes problems in aggregate analysis if countries only report volume or value.

The EU appears to have problems with inter-EU trade, with some countries including trade between EU countries in foreign trade statistics while some do not.

Partial reporting gives rise to the need for careful analysis to ensure aggregates are adjusted appropriately.

Products are misclassified (e.g. veneer sheets under plywood, mouldings under sawnwood, tropical species under temperate species or vice versa).

Countries are misclassified (e.g. Hong Kong or Taiwan R.O.C. coded as China, re-exports or trans-shipments are miscoded).

Numbers are entered incorrectly (e.g. thousands incorrectly entered; kg vs. tonnes or vice versa).

This is mainly a problem for developing countries.

In the Asia-Pacific Region, Cambodia, Fiji, Myanmar and Vanuatu have had no foreign trade data at all for the past decade in the COMTRADE database.

In addition, India, Malaysia, Nepal, Papua New Guinea and Thailand had no data for 2000 by the end of 2001.

Missing reports require the use of “partner analysis” to estimate trade flows, but this is inaccurate since not all partners report and those that do may make errors.

Data updating

The UNSD releases updated data for COMTRADE at quarterly intervals.

The addition of new data and the revision of existing data can completely change aggregate analyses.

Careful analysis is required to establish the reasons for changes and to ensure the new data are accurate.

Eighty-four species of timber are recognized explicitly as being “tropical” at the 6-digit level in the HS.

National customs officials have many problems in identifying these 84 species (trade names only are used in the HS, versus the more accurate binomial nomenclature); moreover many species are not recognized as being explicitly tropical.

Since there are thousands of tropical species in trade, proper analysis requires examination of all source countries listed in the “Others” category in the HS.

Conclusion

International trade statistics are very useful but require careful analysis to ensure accuracy.

INTERNATIONAL TRADE CLASSIFICATION SYSTEMS

INTERNATIONAL TRADE CLASSIFICATION SYSTEMS

Background

Units

Partial reporting

Coding errors

Conclusion