'Change of Tariff Classification' Widely Used Among FTAs, Says WCO Study
The vast majority of the 20 largest free trade agreements make use of "change of tariff classification" rules, which shows the important role of harmonized schedule classification, said the World Customs Organization in a study (here). The WCO reviewed product specific rules for the 20 largest FTAs based on 2013 trade volumes, it said. The WCO then looked at the number of rules set for a certain subheading and the inclusions of change of classification, such as those requiring a change of chapter, change of heading or a change of subheading. The study was part of the WCO's comparative study on preferential rules of origin, it said (here).
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Some 73.41 percent of FTA rules include a change in classification rule, said the WCO. Such rules "are used in particularly high proportions with respect to chemical products, leather products, wood products, metal products, miscellaneous goods," the WCO said in the study. The WCO also said the use of multiple rules under a subheading can create confusion and "it may be desirable to identify separate items related to origin determination (such as split subheading items) in the HS Nomenclature." That approach would also improve trade facilitation, the WCO said.