Communication
from the Chairperson on behalf of the Committee on Market Access to the
Harmonized System Committee of the World Customs Organization
The Committee on Market Access (CMA) is the
World Trade Organization's (WTO) main forum for discussions on issues relating
to tariffs, and it regularly updates its Members about the Harmonized System
(HS) and the relevant linkages with the work of the World
Customs Organization (WCO).
In light of the COVID-19 pandemic, and to improve Members' preparedness and
response to future crises, the CMA has organized a series of experience sharing
sessions where Members have exchanged views on issues relating to trade in
COVID-19 essential goods and the respective policy responses to combat the
pandemic. In carrying out this exercise, WTO Members have recognized
the work done by the WCO and representatives from the WCO Secretariat were
invited in the CMA sessions to share their insights, particularly on the
classification of COVID-19 essential goods.
As a result of the first two
experience sharing sessions[1],
WTO Members identified two issues that they would like to bring to the
attention of the Harmonized System Committee (HSC). These are:
1. Lack of clarity on the proper HS
classification of certain COVID-19 essential products. Members are aware that some
COVID-19 essential products are not specifically identified in the HS as the
specific description for some of these products lacked precision or referred to
categories of goods that are classified under multiple subheadings. Due to this
lack of clarity and the variability in products' characteristics, Members have
classified certain essential products, like facemasks and face shields, under
different HS subheadings, which resulted in significant challenges for the
formulation of policy measures as part of the pandemic response.
2. Lack of a harmonized approach for
the creation of national tariff lines or statistical codes to implement
national policies and monitor trade in COVID-19 essential products. As HS subheadings are generally
much broader in scope than the specific products identified as
"essential" to combat the COVID-19 pandemic, several Members
introduced new national tariff lines or statistical codes in their national
nomenclature to better target their policies and improve monitoring of trade
flows. However, Members did not follow a harmonized approach in the
establishment of those national breakouts and, as a result, trade data for
these products is not standardized making it extremely challenging to analyse
global trade flows in COVID-19 essential products.
While WTO Members benefitted from non-binding
guidance for the HS classification of these products by the WCO and other
international organizations[2],
they have also recognized that these reference documents did not include
certain essential products and that such guidance did not always solve the
classification ambiguity for some of them. With a view of improving Members'
readiness and preparedness, and recognizing the work of the HSC in this regard,
the CMA would like to invite the HSC to consider the following:
a) Clarify the classification in the
HS2022 nomenclature
of those COVID-19 essential goods that remain ambiguous or that Members
currently classify in different HS codes (e.g., facemasks, protective garments,
and other products to be determined). WTO Members will continue to coordinate
with their national authorities to identify additional products that may require
special attention by the HSC.
b) Consider the creation of new
subheadings in the HS2027 amendment to improve and simplify the
classification of essential medical goods. The Annex to this letter offers some
examples of possible changes to the HS as identified by Members, with further
products to be identified by WTO Members in collaboration with their national
authorities.
c) Explore the possibility of
issuing WCO Recommendations on the insertion in national statistical
nomenclatures of subheadings for monitoring international trade in products
essential to combat COVID-19.[3]
While non-binding, these recommendations will contribute to the harmonization
of the classification across Members and improved data collection on these
essential goods.
d) Explore the possibility of
creating a mechanism where the WCO Secretariat can hold ad hoc consultations with the
HSC to issue, in collaboration with other relevant international organizations
such as the WTO, classification guidelines in emergency situations. Such a
mechanism would allow for a more agile response by the international community
to future crises.
The CMA
appreciates the opportunity to share these observations with the HSC and its
Contracting Parties and looks forward to strengthening the collaboration
between the two organizations.
Sincerely
Mr. Chakarin Komolsiri
Chairperson
Committee on Market Access