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    Counting the Value of Crafts

     

     
     
    New recommendation urges countries to measure export value of artisanal products
    © International Trade Centre, International Trade Forum - Issue 4/2000 
     

    ITC encourages national governments to implement a new recommendation of the World Customs Organization (WCO).

    Last year, this magazine issued a market profile on handmade carpets, in which we highlighted a major problem for exporters and trade promotion officials: with few exceptions, artisanal products are not included in the main international system for trade statistics, the Harmonized Commodity Description and Coding System (HS).

    Craft associations and policy-makers have been working long to provide

    statistical visibility for crafts. A breakthrough finally came during this year's annual session of WCO, the body responsible for the HS. At the request of ITC, WCO adopted a recommendation encouraging its member countries to codify handmade products in national statistical classifications.

    The breakthrough is a result of ITC-led negotiations, which have been intense over the last three years. It is the successful outcome of sustained, joint efforts by the craft business sectors in developing countries and ITC as their catalyst and advocate.

    By counting artisanal products as national exports in trade statistics, trade development experts expect that figures will finally give evidence of the importance of crafts for many developing countries, and facilitate export planning strategies.

    A cornerstone to promote artisanal exports 

    Most artisanal products exported today are not counted in international trade statistics. Because they are not separately identified in international trade and customs codification nomenclatures, they are invisible in international trade flows. This has hampered efforts to recognize and develop their export potential. Many governments, while acknowledging the importance of crafts in their development policy, have found it difficult to develop and fund programmes for the sector because of the absence of reliable statistics.

    Only a separate codification in international trade and customs nomenclature for artisanal products can make it possible to collect data about crafts, analyse it and compare national, regional and international figures.

    Challenges 

    For over 30 years, craft associations and policy-making authorities from around the world had attempted, without success (apart from a few exceptions), to identify artisanal products separately in international customs codification and trade information systems.

    The difficulty has been to define artisanal products for the purposes of the HS and to identify criteria that could be applied uniformly to distinguish such goods from their 'machine-made' counterparts. The basis for discussion is the definition of artisanal products adopted by 44 countries in a specialized international symposium organized by ITC and UNESCO in 1997, at which WCO was represented. ITC also set up and coordinated a Working Group on Customs Codification for Crafts, comprised of selected worldwide craft organizations, to research the required product-specific technical

    criteria.

    Expected benefits 

    Craftspeople form a large part of the workforce in many developing countries. Small firms of artisans, the mainstay of craft industries, stand to benefit most from the implementation of the WCO's recommendation. Separately codifying artisanal products in international trade and customs nomenclatures can:

    • permit statistical data identification, collection and analysis on trade flows and trends at national, regional and international levels;
    • provide evidence to financial institutions as to effective returns expected from promoting and supporting programmes for the sector;
    • allow for the establishment of proper development policies for the sector, from both economic and social points of view; and
    • foster the development of small and medium-sized craft enterprises, and reduce unemployment, by providing the statistical basis to encourage artisanal exports.

    In view of the advantages of separate codification for craft producers and firms, ITC encourages governments to act upon the WCO's recommendation. The results obtained from the successful implementation and use of this recommendation will provide grounds to take up the consequent separate identification of artisanal products in a future HS review cycle, in order to develop worldwide harmonization.

    Next HS revisions: 2002 and 2007 

    The HS, in force since 1988, is a multi-purpose international trade nomenclature. With a total of 99 contracting parties, it is being applied by 177 administrations as the basis for customs tariffs worldwide. The HS is also used in international trade statistics as the core product codification system for the United Nations family of economic classifications. Trade regulations of many countries, many international trade agreements (such as WTO schedules of tariff concessions, and proposed harmonized rules of origin) are based on the HS structure. Intended for use by all parties involved in international trade (including producers, traders and carriers) for the coding and description of goods, it has become a common, machine-readable language.

    The HS is updated every five years, in light of technology changes or evolutions in international trade patterns. The previous major revision of the HS took place in 1996. The latest approved revision will come into force on 1 January 2002. The third HS review cycle is in progress and will culminate in a new set of amendments to be implemented as from 1 January 2007.

    Reported by Natalie Domeisen, with María-Mercedes Sala, ITC Market Development Officer. 




    WCO Recommendation NG0021B1 (7 July 2000) 

    The Customs Co-operation Council,* 

    NOTING that the Harmonized System has been widely adopted by countries and Customs or economic unions,

    RECOGNIZING that hand-made products represent a significant share of trade and tourism revenues for developing countries as well as developed countries,

    CONSIDERING that hand-made products have not been separately identified in the Harmonized System,

    TAKING INTO ACCOUNT the request by the International Trade Centre UNCTAD/WTO for the collection and comparison of trade data on hand-made products with a view to formulating trade promotion strategies at international level for such products,

    RECOMMENDS that Member Administrations, Contracting Parties to the Harmonized System Convention and countries using Harmonized System-based nomenclatures take all appropriate action to:

    1. lay down, in their statistical nomenclatures, a definition of hand-made products;

    2. lay down, in their statistical nomenclatures, provisions in respect of the certification of hand-made products as such, if they deem it necessary;

    3. insert in their statistical nomenclatures, as soon as possible, as many additional subdivisions for hand-made products as they deem necessary; and

    REQUESTS Member Administrations and Contracting Parties to the Harmonized System Convention to notify the Secretary-General of:

    1. the definition of hand-made products laid down in their statistical nomenclatures;

    2. the provisions in respect of the certification of hand-made products, if any, laid down in their statistical nomenclatures;

    3. the list of subdivisions in their statistical nomenclatures for hand-made products; and

    4. their acceptance of this Recommendation and the date of its application.

    * The Customs Co-operation Council is the official name of the World Customs Organization.