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Topic 2.

Evolution of international trade by product


2.1 The evolution of international trade structure
2.2 International Systems Classification of goods
2.3 The evolution of international trade on 2 and 6 product groups
2.1 The evolution of international trade structure
Harmonized Commodity Description System and Coding of Goods international standard System that
includes numbers and names for classifying goods traded drafted (01/01/1988) and maintained by the World
Customs Organisation (WCO) (180 Member States, based in Brussels).
Under the Convention on the Harmonized System contracting parties are obliged to base their charges on
nomenclature SA, having the right to impose their own customs duty rates.
Structure HS
HS is structured in
21 sections and
96 chapters.
The system starts at primary products, raw materials and products with a low degree of processing - to
products with a higher degree of processing.
HS establishes a general level of 6 units, and if necessary still contain 2 units for level of custom duty (8
units). Another 2 units (figures) are added as the final statistical reporting numbers - 10 digits.
To ensure harmonization Contracting Parties are required to comply in respect of the classification for the
level 4 and 6 units and international regulations and specifications concerning the allocation of products
to certain chapters without deviation, but free to adopt specific subcategories (from 8 units).
The final chapters 98 and 99 are intended for national use.
Chapter 77 is reserved for future use internationally.
Using HS
More than 200 states, customs and economic union, representing over 98% of total world trade using HS as
the basis for:
Custom tariffs
Collecting international trade statistics
Collecting national tax
Trade negotiations (ex. on tariff concessions, etc.)
Transport tariffs and statistics
Monitoring of controlled goods (ex. waste, drugs, nuclear weapons, endangered species etc.)
Areas of customs control and customs procedures, including assessing the risk, information technology and
compliance rules.
The codes are reviewed regularly.
HS Classify over 200 000 goods.
Approximately 30-50% of all goods are misclassified (customs declarations).
Penalties - inadequate classification (responsibility of the importer).
There are 6 stages of disaggregation.
21 Sections
99 Chapters
1244 Headings
5224 Subheadings
Sections HS:
Animals & Animal Products
Vegetable Products
Animal Or Vegetable Fats
Prepared Foodstuffs
Mineral Products
Chemical Products
Plastics & Rubber

Hides & Skins


Wood & Wood Products
Wood Pulp Products
Sections - continued
Textiles & Textile Articles
Footwear, Headgear
Articles Of Stone, Plaster, Cement, Asbestos
Pearls, Precious Or Semi-Precious Stones, Metals
Base Metals & Articles Thereof
Machinery & Mechanical Appliances
Transportation Equipment
Instruments - Measuring, Musical
Arms & Ammunition
Miscellaneous
Works of Art
The International Standard System of Classification of goods (ISSC)
a classification system used for the classification of imports and exports of a country, for comparison with
other states and evolving dynamic.
This system is maintained by the UN.
Today is into force the fourth review of the system (2009).
The purpose ISSC
Evidence of international trade statistics and to promote comparability of international trade statistics.
Property group according to SITC reflect:
a) the materials used in the production process,
b) the level of processing,
c) market practices and product destinations,
d) the importance of world trade in goods and
e) technological changes.
SITC classification structure
Level 1: Section (10) (N: one-digit code)
Level 2: Divisions (67) (N: 2-digit codes)
Level 3: Groups (261) (N: 3-digit codes)
Level 4: Subgroups (1,033) (N: 4-digit codes)
Level 5: Units (s) (3.121) (N: 5-digit codes)
ISSC sections
0 - Food and live animals
1 - Beverages and tobacco
2 - Crude materials, inedible, except fuels
3 - Mineral fuels, lubricants and related materials
4 - Animal and vegetable oils, fats and waxes
5 - Chemicals and related products, n.e.s.
6 - Manufactured goods classified chiefly by material
7 - Machinery and transport equipment

8 - Miscellaneous manufactured articles


9 - Commodities and transactions not classified elsewhere in the SITC
I - Gold, monetary
II - Gold coin and current coin
2.3 The evolution of international trade 2 and 6 product groups
The prewar period - Commodities held the largest share in IT value (2/3)
In the postwar period - the situation changed in favor of manufactured goods
By mid-decade VI, the share of manufactured goods exceeded the one commodity.
Trade in commodities:
in 1950, the largest share in IT held a group of developing countries;
in the next period (1960-1962 years), this proportion reached 55%;
1965 - present, developing countries have reduced their share so that the share majority - owned by
developed countries;
increasing the share of developed countries in exports of commodities is due to the fact that they paid
attention to agricultural development own and extractive industry so as to speed up the service yourself of
national production demand, also produce large quantities of commodities for export;
many countries that were previously importing agricultural products, have become major exporters of
agricultural products;
3/4 of commodity imports carried him developed countries.
Trade in manufactured products
The predominant role of developed countries.
manufacturing developed countries have a monopoly, and therefore the export monopoly of manufactured
products. (because the gap between groups of countries which has increased).
In the period 1985-2009, developed countries have a declining share of trade in manufactured products, while
developing countries recorded an increase of this share.
Thus in 2009 the share of developing countries reached about 35-37% of world trade.
IT six product groups.
The subgroup of food products
Before the 2nd World War, this subgroup had first as a share in IT.
Its weight was decreasing and in the last decade represented 9-10% of IT.
The growth rate of food production was relatively low, even negative. This was due to the following causes:
Developed countries have recovered the sector of agriculture, after the 2nd World War, in a short time,
securing the supply of food from their own production,
for their part, developing countries have reduced export of food for two reasons:
increased domestic consumption due to population growth;
increased living standards.
many developing countries, after gaining political independence, switching from the production of
monoculture to a diversified production;
change over time, the prices for agricultural products.
In terms of physical volume, increased trade in agricultural products, but with a slow growth rate.
Developed countries have a share of 70% food trade (both import and export) and
Developing countries 30%.
If the terms of the share of CI values of food has been a significant decrease compared to the pre-war (4
times), in terms of physical volume and value saw an increase (in 2008, world exports of food products was
1214 billion) but the pace of growth was slower compared to other product groups.
2009 - (-13%),

Major exporters of food


EU
USA
Brazil
Canada
Argentine
15 leading food exporters, the top 5 plus China, Indonesia, Thailand, Malaysia, Australia, India, Mexico,
New Zealand, Russia and Vietnam have 83.3% share of world exports of food products.
Sub-commodity
In terms of value - after the 2nd World War, a decrease in the share I.
The prewar period - 22% of total trade in the 1970s reached - 11% now - only 5%.
The causes of this development were:
technological and scientific revolution that led to the industializare, the partial replacement of traditional
natural raw materials with new, synthetic (there was an enrichment of the nomenclature of raw
materials by introducing synthetic materials);
natural evolution of commodity prices;
Policy creation of strategic stocks of raw materials practiced by developed countries participating in different
military blocs.
Sub-fossil fuels, petrol and lubricants
In terms of value, this subgroup showed a slight increase by the end of VII century, then increase to be.
Evolution of the share:
7% - before the 2nd World War;
10% - after the 2nd World War and
24% - after 70
20% - in 2009.
This subgroup had the most sinuous evolution, with significant oscillations. In this subgroup each component
has a different pattern.
2009 pace - (-36%) to the level of 2.26 trillion $
Subgroup Chemicals products:
before the 2nd World War - 4% share at the end of the war the share increased to 8-9%
now weight - about 12%.
Fluctuations - driven scientific and technical revolution that has led to various synthetic substitutes:
stimulators, antiduntori, varnishes, paints, dyes, pharmaceuticals and cosmetic medical products, fertilizers,
radioactive materials etc.
Under the influence RTS chemical industry was modernized, diversified and specialized significantly, and
permanently expanding production and wide assortment nomenclature.
Chemistry is one of the most dynamic industries in the world, with a tendency to outrun even the growth of
automobile industry.
At intervals of 8-10 years renewed global chemical production, and therefore international trade 85-90%.
The richest classification of goods in international trade circuit.
Green movement caused a permanent increase in the share of organic chemicals in recent decades.
sequel
The structure of international trade in chemical products recorded increased share of low volume and high
value, ie products with high industrial recovery (petrochemical products, medical and pharmaceutical
products, cosmetics etc.) and reduced share of products with high volume and value small (fertilizers,
chlorine etc.).
Trade in chemicals is dominated by developed countries (80% in exports and 70% of imports).
Major exporters
1. EU

2. US
3. China
4. Japan
5. Switzerland
15 leaders exporters of chemicals, including top 5 Korea, Canada, Singapore, Taipei, Russia, India, Hong
Kong, Saudi Arabia, Israel, Thailand with a share of 90.6% of world exports of chemicals.
Subgroup machinery, equipment and vehicles
A registered until the 70s, the highest rate of growth in international trade. Thus, the weight - from 8% before
the war in the 70s to reach 30% and in 2009 to 39% (an increase of 80 times in 2009 compared to 1950).
The causes of this development are:
continuous modernization and permanent industrial branch and other branches;
emergence and development of new branches and sub-branches in the developed countries, such as
electronics, aerospace, petrochemical industry;
DIM deepening as a result of the deepening trend of specialization of developed countries;
expansion of extractive industries and the emergence of new industries in manufacturing;
development of military industry;
soaring prices of this subgroup.
The main exporters of auto
EU
Japan
USA
Canada
Korea
Mexico
China
Turkey; Thailand; UAE; Brazil; South Africa; Argentina; India; Australia.
These countries hold 97.4% of world exports of automotive products.

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