International Trade by Commodity Statistics (ITCS) database: Allocating data from HS 6 digits to HS 2 digits WPTGS, November 2009 Blandine Serve, Eric Gonnard ( OECD Statistics Directorate) Colin Webb ( OECD Science, Technology and Industry Directorate) Agenda Item 4.1 STD/SES/TAGS; 2 nd WPTGS Meeting , Paris

Objectives: Report about break in series occurring in OECD (ITCS) and UNSD (COMTRADE) annual trade databases Explain the causes, the conversion procedures and conversion table Propose solutions to improve the quality of long time series in HS 2

Outline: 3 1.OECD/UN joint database, overview 2.Non conversion of Memorandum Items (MI) 3.Break in long time series 4.Over use of codes 5.Solution to improve the quality of the database 6.Conclusion

1. OECD/UN joint database 4 Cascade of classifications: data received in latest HS classification and converted into historical series at 6- digits Aggregation from 6-digits to 2-digits, with a special case, the Memorandum Items

2. Memorandum Items Definition of MI: special codes to process as accurately as possible special transactions (confidential items and Eurostat specific codes) Member countries submit MI following their own methodology MI are harmonised in the OECD/UNSD trade database : –In the reported classification (e.g. in HS 2007), MI are allocated to the specific chapter where they are belonging to –In the older classifications, MI are not converted, but generated to the chapter 99 ( codes) 5

3. Break in HS long time series Consequence of the non conversion of MI, an illustration Graph: United Kingdom – Exports of chapter 88 “Aircraft, spacecraft, and parts thereof” Note: « 88CF 00 » stands for the confidential code contained in chapter 88

3. From a user point of view In practice, when downloading trade data, users get different values Chapter 88 exports to the World of the UK tree for the year 2007 Querying HS 2007 dataset Querying HS 2002 dataset ClassificationCommodityValue in USD HS ,761,433,532 HS ,686,192 HS CF0012,739,747,340 ClassificationCommodityValue in USD HS ,686,192 HS ,686,192 7

4. Inflation of Increase of the chapter 99 in HS 2002 vs HS 2007 for 2007 exports: –27% for OECD total –94% U.K. –56% Italy –18% Germany Loss of accuracy and information 8

5. Solution: conversion of MI (1/3) In HS: convert MI into specific chapters in older classifications rather than generating codes –One-to-one conversion: Example: ‘ 01CF00 ‘ from HS 2007 can be converted to ‘ 01CF00’ in HS 2002, since every 6-digits codes in Chapter 01 from HS 2007 go to (and only to) Chapter 01 in HS 2002 –Intercrossing issues for one-to-many conversion Example: 9

5. Solution: conversion of MI (2/3) Number of HS 2007 chapters concerned by intercrossing issues : –2 when converting into HS 2002 –3 when converting into HS 1996 –5 when converting into HS 1988 For those cases: 10

5. Solution: conversion of MI (3/3) Complementary method, when information is available: 1) Convert 6-digits codes and totals on 2-digits 2) Compute by chapter, the Confidential codes as being: (2-digits total) – Σ(6-digits) Conversion into SITC: –No breaks in series –No easy chapter-section correspondance 11

6. Conclusion  Conversion of the Memorandum Items for HS classifications one-to-one for 2-digits one-to-many: ‘ HSCFH3’ new codes (2-digits total) – Σ(6-digits) into confidential items  Non conversion into SITC  Conversion of ICT goods 12

Thank you! 13