Stat-Horizon. Harmonized System 2012 and the BOT s new product classification. Statistics and Information Systems Department FEBRUARY 2012

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1 Stat-Horizon Statistics and Information Systems Department Harmonized System 2012 Angsupalee Wacharakiat FEBRUARY 2012 The views expressed in this article are those of the authors and do not reflect those of the Bank of Thailand

2 2 Abstract Following the Thai Customs implementation of the 2012 Harmonized System (HS2012) January 2012, the Bank of Thailand (BOT) which uses Customs records for the compilation of international trade statistics has accordingly adjusted the compilation system to accommodate for the new inputs coded in HS2012. Additionally, the BOT s product classification has also been reviewed so as to better reflect the current international trade phenomena; and statistical tables have also been redesigned to better serve analytical needs of data users. This article summarizes changes towards the new product classification and its impacts on disseminated statistics so as to inform data users prior to official release of the new time series at the end of February 2012

3 3 1. Introduction Starting January 2012 onwards, the Thai Customs has implemented the 2012 Harmonized System (HS2012), replacing the old HS codes which have been in use since This newly announced set of HS codes fully comply with the World Customs Organization s (WCO) HS2012 and the ASEAN Harmonized Tariff Nomenclature (AHTN2012) 1, which have been revised upon HS2007 to incorporate public s concern and awareness over certain commodities, especially those related to environmental issues, pollution, and ecological system. On the other hand, commodities with declining international trade volume may be reclassified or merged to related categories. Consequently, Statistics and Information Systems Department (SID), the BOT, which uses Customs records for the compilation of international trade statistics, has accordingly adjusted its compilation system to be aligned with the new inputs coded in HS2012. Product classification has also been reviewed so as to better reflect the current environment of international traded products, and to explicitly display more comprehensive set of major product groups and commodities in the disseminated statistical tables to better serve analytical needs of data users. This article summarizes changes towards the BOT s new product classification (Product Group : PG) and its impacts on disseminated statistics so as to inform data users prior to official release of the new time series at the end of February Current vs A Newly-Adjusted Product Classification The BOT s existing product classification involved categorizing Customs records of over ten thousand HS codes 2 into 2 sets of major commodities, 255 for exports and 90 for imports. These 2 sets of major commodities are then aggregated to 6 sectors for exports and 4 categories for imports, (based on end use of the products) which are shown below: 1 Thailand is an associate member of the World Customs Organization (WCO) and the Harmonized System (HS), which has currently undergone 5 th revision to form HS2012, effective from 1 January 2012 onwards. Moreover, Thailand has also adopted the protocols for the ASEAN Harmonized Tariff Nomenclature (AHTN), which standardizes commodity coding among ASEAN member states at HS 8-digit level. 2 Data received from the Thai Customs were coded in accordance with different versions of HS as listed below: HS1988 for data of the years HS1996 for data of the years HS2002 for data of the years HS2007 for data of the years HS2012 for data of the year 2012 onwards

4 4 Exports Imports 1. Agriculture 1. Consumer Goods 2. Fishery 2. Raw Materials and Intermediate Goods 3. Forestry 3. Capital Goods 4. Mining 4. Others 5. Manufacturing Labor-intensive products High-tech products Resource-based products Other manufactured products 6. Others This current product classification was designed primarily to serve an analysis of the export and import structure rather than the comparison of a pair export and import products. This is because the list of 255 major products for exports and 90 major products for imports were constructed separately and defined with different HS codes. For instance, exports and imports of computers or electrical appliances were differently defined in terms of HS codes, and thus were uncomparable. Furthermore, for the case of imports, most components and parts were categorized in the same group with finished products to facilitate analyses of the individual industries, hence not appropriately reflecting end use of the products. For example, computers parts which, in practice, are mostly used as raw materials and intermediate goods in the production process for computer and electronics industries were instead categorized together with computers under capital goods. Lastly, some commodities may have increasing trade volume over the past 5 years and therefore worthwhile to have an explicit classification. In the event of the Customs implementation of HS2012, the BOT has taken this opportunity to review its disseminated trade statistics and adjusted the product classification with an aim to improve the quality of the trade statistics to meet several aspects of analysis required by data users, to make them properly reflect end use of the products, as well as to update the list of major commodities for both exports and imports. The BOT s new product classification (PG), to be implemented by the end of February 2012, consists of 201 major commodities identically defined for both exports and imports (details of which appear in the Annex). These 201 commodities are then aggregated in accordance with exporting sector (for exports) and end use of the products (for imports). The tables below illustrate the structure of the new product classification.

5 5 Exports Imports Agriculture Consumer Goods Fishery Non-durables Forestry Durables Mining Raw Materials and Intermediate Goods Manufacturing Fuel Agro-manufacturing Products Minerals Apparels and Textile Materials Agricultural and agro-manufacturing products Footware and parts Non-agro manufacturing products Electronics Capital Goods Electrical Appliances Machinery, equipment, and supplies Metal & Steel Aircrafts, ships, floating structures, and locomotive Automotive Other capital goods Aircrafts, ships, floating structures, and locomotive Others Machinery & Equipment Non-monetary gold (excl. articles of goldsmiths) Jewellery Automotive Chemicals Other imports, n.i.e. Petro-chemical Products Petroleum products Photographic & cinematographic instruments & supplies Optical appliance and instruments Toiletries and cosmetics Furniture and parts Other Manufacturing products Others After this adjustment, the current classification, hereafter refered to as old classification, defines major commodities in terms of HS codes, while the new classification defines major commodities in terms of SITC Rev.4 (Standard International Trade Classification, Revision 4) of the United Nations Statistics Division (UNSD). HS coverage for each SITC code is in turn specified based upon the correspondence table maintained by the UNSD. The following diagram illustrates the workflows for the old versus the new classifications.

6 6 Old System New System Economic Classification By BOT HS 1996 HS 2002 HS 2007 HS 2012 Product Group (PG) By BOT SITC Rev.4 By UNSD HS 1996 HS 2002 HS 2007 HS 2012 The new technique of defining major commodities is adopted for flexibility of data processing procedures and to lessen the burden for the BOT to construct HS-PG correspondence table at each change of HS versions without affecting or hindering hinder the usage of the statistics. To further facilitate data users, the BOT has converted the entire time series of exports and imports as well as international trade indices into the new classification.

7 7 3. Impacts on Disseminated Statistical Tables The BOT compiles and disseminates monthly international trade statistics and indices on the BOT s website on the last business day of the month following the reference period.

8 8 Changes described in section 2 of this article would result in changes to the statistical tables 3 currently disseminated on the BOT s website (both in international trade and international trade indices sections), starting February 2012 onwards. The matrix below summarizes such changes. List of Tables 1. EC_XT_002 Trade Classified by Country 2. EC_XT_003 Trade Classified by Country (US$) 3. EC_XT_004 Imports Classified by Economic Classification 4. EC_XT_005 Imports Classified by Economic Classification (US$) 5. EC_XT_006 Exports Classified by Product Group 6. EC_XT_007 Exports Classified by Product Group (US$) 7. EC_XT_008 Total Value and Quantity of Exports 8. EC_XT_009 Total Value and Quantity of Exports (US$) 9. EC_EI_021 Import Indices by Economic Classification (Non Seasonally Adjusted) 10. EC_EI_022 Import Indices by Economic Classification (Non Seasonally Adjusted) (US$) 11. EC_EI_025 Import Indices by Economic Classification (Seasonally Adjusted) (US$) Changes - Replaced with EC_XT_002_S2 and EC_XT_003_S2, with additional major partner countries explicitly listed - Replaced with EC_XT_004_S2 and EC_XT_005_S2, with new product group breakdown comparable with exports (please refer to Stat Horizon article HS2012 and new product classification for exports and imports, section 2 for more detail) - Replaced with EC_XT_008_S2 and EC_XT_009_S2, with new product group breakdown comparable with imports (please refer to Stat Horizon article HS2012 and new product classification for exports and imports, section 2 for more detail) - Replaced with EC_EI_021_S2, EC_EI_022_S2 and EC_EI_025_S2, with new product group breakdown comparable with import value as appeared in EC_XT_004_S2 12. EC_EI_023 Export Indices by Product Group (Non Seasonally Adjusted) 13. EC_EI_024 Export Indices by Product Group (Non Seasonally Adjusted) (US$) 14. EC_EI_026 Export Indices by Product Group (Seasonally Adjusted) (US$) - Replaced with EC_EI_023_S2, EC_EI_024_S2 and EC_EI_026_S2, with new product group breakdown comparable with export value as appeared in EC_XT_008_S2 3 Please refer to the new templates on the BOT s website

9 9 Reference World Customs Organization, 2012, New international nomenclature enters into force, Brussels Royal Ordinance on Customs Tariff (5 th edition), 2012 (Thai Version Only) Annex 1. HS2012 HS2007 Concordance Table (by the Thai Customs) (Thai Version Only) 2. The BOT s new product classification (Product Group : PG) 3. PG-SITC Rev.4 Mapping Table