I. INTRODUCTION

II. REVISION OF THE INTERNATIONAL TRADE CLASSIFICATION

III. CONCLUSIONS

I. INTRODUCTION

1. Trade in hides, skins, leather and leather manufactures has in aggregate grown at an average of about 12 percent per annum over the past 20 years, to around US$40 billion in the early nineties. With this growth, commodity trade patterns have changed. In particular, an increasing proportion of trade is now in the form of wet-blue, crust and ready to finish leathers. Despite the significance in volume and value terms of international trade in these items, they are not included in the existing international trade classifications.¹ These tanned hides and skins are typically arbitrarily classified in trade statistics either as raw hides and skins, or as finished leather, whereas they are, in fact, neither of these.

II. REVISION OF THE INTERNATIONAL TRADE CLASSIFICATION

2. At its Fifth Session in Bologna, May 1996, the Sub-Group agreed that revision of the trade classification was necessary, and it requested the Secretariat to consult with government, industry, trade and international organization experts to draft appropriate definitions. Proposed changes to the classification would be submitted to the World Customs Organization (WCO), the body responsible for international trade classifications. The WCO requires workable definitions of any new classifications proposed for inclusion, together with estimates of the value and volume of trade in these products.

3. At the time of the Fifth Session of the Sub-Group, an informal working group discussed the requirements for revision, and a proposed new schedule was subsequently developed by the secretariat of the Confederation of National Associations of Tanners and Dressers of the European Community (COTANCE) and distributed for comment. Following a process of consultation among industry experts, during which revisions were made to the earlier draft, to take account of technical requirements, a proposal which has broad acceptance by the industry has now been developed.

4. In summary, the proposal for revision to Chapter 41 of the International Trade Classification is as follows:

a. The existing system:

4101: Raw bovine hides and skins, limed or pickled but not tanned;

4102: Raw sheep and lamb, limed or pickled but not tanned;

4103: Other raw hides and skins (includes goat, reptiles);

4104: Bovine leather;

4105: Sheep and lamb leather;

4106: Goat and kid leather;

4107: Leather of other animals;

4108: Chamois leather;

4109: Patent leather, patent laminated and metallised leather;

4110: Parings and waste; and

4111: Composition leather.

b. The proposed revision:

5. The proposal is to maintain the same structure under each of the broad categories (raw; tanned and crust; and finished) in which material is traded. The first code in each group refers to bovine, equine materials including buffaloes, the second to sheep and lamb, and the third to goat and kids as well as other animals such as pigs, reptiles, etc. The new structure brings two residual categories at the end, item 4110 that covers specialty leathers such as chamois, patent, patent laminated or metallised leathers, and 4111 that is kept for sub-products and leather waste.

4101: Raw bovine and equine hides and skins, fresh, salted, limed or pickled but not tanned;

4102: Raw sheep and lamb, fresh, salted, limed or pickled but not tanned;

4103: Other raw hides and skins (includes goat, reptiles);

4104: Tanned or crust bovine or equine hides and skins, not finished;

4105: Tanned or crust sheep and lamb skins, not finished;

4106: Other tanned or crust, not finished;

4107: Finished leather, bovine and equine, include buffalo;

4108: Finished leather, sheep and lamb;

4109: Other finished leather;

4110: Chamois leather; patent and patent laminated leather; metallised leather:

4111: Composition leather, parings, waste.

The proposed revision is set out in more detail in the annex to this document.

III. CONCLUSIONS

6. The pattern of world trade in hides, skins and leather has changed considerably, with material now increasingly traded in semi-processed rather than in raw form. However, crust, wet-blue and ready to finish leathers are not included in the existing international trade classifications. A proposal to amend the trade classification so as to include these items has been formulated.

7. The Sub-Group might wish to endorse the proposed revisions, and to urge that they be considered for adoption by the World Customs Organization as part of its revision procedure for the year 2002.

-details to 6 digit level

4101 Raw hides and skins of bovine (including buffalo) or equine animals (fresh, or salted, dried, limed, pickled or otherwise preserved, but not tanned, parchment-dressed or further prepared), whether or not dehaired or split:

4101 10 - Whole hides and skins, of a weight per skin not exceeding 8 kg when simply dried, 10 kg when dry-salted, or 16 kg when fresh, wet-salted or otherwise preserved:

4101 20 - Whole hides and skins, of a weight exceeding 16 kg

4101 90 - Other, including butts, bends and bellies

4102 Raw skins of sheep or lambs (fresh, or salted, dried, limed, pickled or otherwise preserved, but not tanned, parchment-dressed or further prepared), whether or not with wool on or split, other than those excluded by Note 1 (c) to this Chapter:

4102 10 - With wool on

- Without wool on :

4102 21 - - Pickled

4102 29 - - Other

4103 Other raw hides and skins (fresh, or salted, dried, limed, pickled or otherwise preserved, but not tanned, parchment-dressed or further prepared), whether or not dehaired or split, other than those excluded by Note 1 (b) or 1 (c) to this Chapter:

4103 10 - Of goats or kids

4103 20 - Of swine

4103 30 - Of reptiles

4103 90 - Of other animals

4104 Tanned or crust hides and skins of bovine (including buffalo) or equine animals, without hair on, whether or not split, but not finished:

- in the wet state (including wet-blue):

4104 11 - - Full substance and grain splits

4104 19 - - Other splits

- in the dry state (crust):

4104 21 - - Full substance and grain splits

4104 29 - - Other splits

4105 Tanned or crust skins of sheep or lambs, without wool on, whether or not split, but not finished:

4105 10 - in the wet state (including wet-blue)

4105 20 - in the dry state (crust)

4106 Other tanned or crust hides and skins, without wool or hair on, whether or not split, but not finished:

- Of goats or kids:

4106 11 - - in the wet state (including wet-blue)

4106 12 - - in the dry state (crust)

- Of swine:

4106 21 - - in the wet state (including wet-blue)

4106 22 - - in the dry state (crust)

4106 30 - Of reptiles

- Other:

4106 91 - - in the wet state (including wet-blue)

4106 92 - - in the dry state (crust)

4107 Finished leather (including parchment-dressed) of bovine (including buffalo) or equine animals, without hair on, whether or not split, other than leather of heading 4110:

- Whole hides and skins:

4107 11 - - Full substance

4107 12 - - Grain splits

4107 19 - - Other splits

- Other, including sides:

4107 91 - - Full substance

4107 92 - - Grain splits

4107 99 - - Other splits

4108 00 Finished leather (including parchment-dressed) of sheep or lamb, without wool on, whether or not split, other than leather of heading 4110

4109 Finished leather (including parchment-dressed) of other animals, without wool or hair on, whether or not split, other than leather of heading 4110:

4109 10 - Of goats or kids

4109 20 - Of swine

4109 30 - Of reptiles

4109 90 - Other

4110 Chamois (including combination chamois) leather; patent leather and patent laminated leather; metallised leather:

4110 10 - Chamois (including combination chamois) leather

4110 20 - Patent leather and patent laminated leather; metallised leather

4111 Composition leather with a basis of leather or leather fibre, in slabs, sheets or strip, whether or not in rolls; parings and other waste of leather or of composition leather, not suitable for the manufacture of leather articles; leather dust, powder and flour:

4111 10 - Composition leather with a basis of leather or leather fibre, in slabs, sheets or strip, whether or not in rolls

4111 20 - Parings and other waste of leather or of composition leather, not suitable for the manufacture of leather articles; leather dust, powder and flour

¹ The Standard International Trade Classification (SITC) and the Harmonized Commodity Description and Coding System (HS) are currently the most common trade classifications used by national statistical offices to report on trade and trade flows, although some countries in Latin America and Africa still use the Custom Cooperation Council Nomenclature (CCCN). Over the years the former two classification systems have undergone a number of modifications aimed at removing the inherent conflict between a classification for customs purposes (CCCN) and one for analytical purposes (SITC). These revisions resulted in the development of the HS which has added more levels of detail to the CCCN nomenclature, and led to two substantive revisions in the SITC classification.