Classifications

5.1 ABS international merchandise trade statistics are compiled and disseminated according to several different, but linked, detailed classifications. These classifications are used to identify and compile details of internationally traded goods in a consistent way for statistical and analytical purposes.

5.2 Due to the variety of uses, the different classifications feature different levels of detail and classification criteria, such as the level of manufacturing or processing, the main end-use of the goods or the industry most likely to have produced the goods. The statistics can also be classified by country or country groups, mode of transport and state of origin or destination, to enable detailed analysis of Australia's international merchandise trade.

5.3 The purpose of this chapter is to briefly describe the main classifications used to collect, compile and disseminate the statistics.

5.4 Correspondences describe the relationship between different classifications or different versions of the same classification.

5.5 The most detailed international merchandise trade classifications used by the ABS are the Australian Harmonised Export Commodity Classification (AHECC) for exports and the Combined Australian Customs Tariff Nomenclature and Statistical Classification (Customs Tariff) for imports. To assist in the analysis of Australia's international merchandise trade statistics, the ABS maintains a series of correspondences from the most detailed level of the AHECC and Customs Tariff to the most detailed level of the other ABS classifications used to disseminate these statistics.

5.6 When there are changes to a classification a correspondence showing the link between the new code and old code or codes is created. These correspondences are provided by the ABS for the users of these classifications. See Appendix 6 in the Data Downloads section.

5.7 The relationships between items in the correspondences may be 'one to one', 'one to many', 'many to one' or 'many to many'. The example of 'fresh apples' has been used throughout this chapter to illustrate how international merchandise trade data may be classified and presented to suit the preferences of the user.

5.8 ABS correspondences are reviewed and updated to permit comparison of data over time.

5.9 The ABS uses the following classifications to present its international merchandise trade data: 

• Harmonized Commodity Description and Coding System (Harmonized System or HS) is a six digit classification. The HS is used as the basis for the eight-digit AHECC and the ten-digit Customs Tariff
• Standard International Trade Classification (SITC), Revision 4 (Rev. 4)
• Classification by Broad Economic Categories (BEC)
• Balance of Payments Broad Economic Categories (BoPBEC) (for imports and import clearances only)
• Australian and New Zealand Standard Industrial Classification (ANZSIC), 2006 (Revision 2.0)
• Supply Use Product Code (SUPC) and Input Output Product Code (IOPC).

5.10 SITC (Rev.3) and ANZSIC 93 are used to disseminate historical international merchandise trade data (prior to July 2005 and July 2009 respectively). Upon request, export and import data for periods prior to January 2012 can be supplied by the Australian Transport Freight Commodity Classification (ATFCC). A correspondence from the AHECC and Customs Tariff codes to the ATFCC has not been maintained since January 2012.

5.11 The SUPC is used in the compilation of the annual supply use benchmarks which are used internally by the ABS to balance the three measures of Gross Domestic Product. International merchandise trade data by SUPC are not available for release. The IOPC is used in the compilation and release of the annual Input-Output Product Tables, Australian National Accounts Input-Output Tables (Product Details) (cat. no. 5215.0.55.001).

5.12 Table 5.1 shows the number of statistical items at each level of the major classifications used for international merchandise trade statistics. The AHECC and Customs Tariff use the HS to the six digit level except for:

• AHECC Chapter 98 - Special Transactions and Commodities Not Classified According To Kind:
• AHECC Chapter 99 - Commodities and Transactions Not Included In Merchandise Trade:
• Customs Tariff Chapter 99 - Special Transactions and Commodities Not Classified According To Kind; and Commodities and Transactions Not Included In Merchandise Trade;
• One AHECC code in Chapter 26 and one Customs Tariff code in Chapter 29 used by the ABS for confidentiality purposes (see Table 9.1 in the Data Confidentiality chapter for further information).

5.13 The HS was adopted by the World Customs Organization (WCO) in June 1983 and it entered into force on 1 January 1988. Australia began using the HS on that date as the basis for the AHECC and the Customs Tariff and for the compilation and dissemination of international merchandise trade statistics. The HS is used by over 200 countries or economies as the basis for their Customs Tariffs and for their international merchandise trade statistics. Approximately 98% of world merchandise trade is classified in terms of the HS.

5.14 The HS is a hierarchical classification and is arranged in a logical structure and supported by well-defined rules and explanatory notes to assist in classification decisions and to clarify the scope of the particular headings or sub-headings. As part of the classification the WCO provides Section Notes, which have information relevant to classifying goods in that section, and Chapter Notes, which outline the broad structure of that chapter and provide information specific to classifying goods within that chapter. Where appropriate the Department of Home Affairs add Additional Notes to the Chapter Notes, further clarifying which goods should be classified to that chapter. The HS generally groups commodities according to their degree of manufacture; material of which the goods are composed; and by similar generic description. For example, live animals are classified within Chapter 1, animal hides and skins within Chapter 41 and leather footwear within Chapter 64.

5.15 The HS is reviewed every five years and updated by the WCO to ensure it remains relevant given developments in technology and changes in patterns of international trade. There have been five revisions to the HS since the first edition was implemented in January 1988, with the latest revision being implemented by Australia on 1 January 2017. The previous revisions to the HS by the WCO were implemented in Australia in 1996, 2002, 2007 & 2012, there were minor amendments in 1992. The next revised edition is scheduled for implementation in January 2022.

5.16 Australia has expanded the HS to create the AHECC and the Customs Tariff to provide further commodity detail for its exports and imports.

5.17 Since 1 January 1988, all goods requiring an export declaration have been classified according to the eight-digit AHECC code. The first six digits of the AHECC are taken from the HS, with the seventh and eighth digits (statistical code) added by the ABS to satisfy Australian statistical requirements.

5.18 AHECC codes provide the most detailed breakdown of exported goods and are used to analyse exports of particular commodities. The ABS has responsibility for maintaining the AHECC documentation. Due to the smaller number of statistical codes, the absence of duty, and the comparatively less diverse export trade, amendments to the AHECC are made less frequently than to the Customs Tariff.

5.19 The ABS generally only releases updates to the AHECC in January and July reference months. Before updates to the AHECC are released they are advertised on the ABS website under International Trade in Goods (cat. no. 5368.0).
5.20 An example of the hierarchical structure of the AHECC is included below:

5.21 The detailed AHECC is available electronically in the form of Excel spreadsheets on the ABS website from the Data downloads section of the publication, Australian Harmonized Export Commodity Classification (AHECC) - Electronic Publication (cat. no. 1233.0).

5.22 Since 1 January 1988, all goods requiring a full customs declaration for import into Australia are classified according to the ten-digit Harmonized Tariff Item Statistical Code (HTISC) of the Customs Tariff. The first six digits of the code are taken from the HS and match the first six digits of the AHECC codes. The seventh and eighth digits are added by the Department of Home Affairs to allow for different rates of duty applied to particular goods. The ninth and tenth digits (statistical codes) are added by the ABS to satisfy Australian statistical requirements.

5.23 HTISCs provide the most detailed breakdown of imported goods and are used to analyse imports of particular commodities. The Department of Home Affairs has responsibility for maintaining the HTISC documentation and distributes replacement pages containing classification amendments.

5.24 The ABS generally only updates statistical codes in the Customs Tariff in July reference month,. Updates to the Customs Tariff are advertised on the ABS website under International Trade in Goods (cat. no. 5368.0).

5.25 An example of the hierarchical structure of the Customs Tariff is included below:

5.26 The ABS has responsibility for the maintenance of all aspects of the statistical code components of the AHECC and the Customs Tariff. The ABS does not make changes to either classification at the two, four or six-digit levels which are part of the HS, or to the eight-digit level of the Customs Tariff which is maintained by the Department of Home Affairs through their relevant legislation. The only exceptions are the inclusion of two extra commodity codes for the Broad Commodity Details confidentiality restrictions and the use of non HS chapters 98 and 99.

5.27 An ABS Information paper: International Trade Classification Feasibility Studies, 2001 (cat. no. 5499.0.55.001) contains more information for applicants seeking classification changes.

5.28 Most countries use the SITC, in addition to the HS, for the dissemination and analysis of merchandise trade statistics according to user requirements. While the HS classification groups commodities by the material of which the goods are composed, the SITC groups goods according to their level of manufacturing or processing. The ABS uses the HS based classifications for the compilation and dissemination of detailed commodity information but the SITC is the primary classification used for the publication and dissemination of broad level commodity information in ABS' international merchandise trade statistics.

5.29 The third revision of the SITC (Rev. 3) was developed to better align the SITC with the HS. It was implemented by the ABS at the same time as the HS based classifications, on 1 January 1988.

5.30 The fourth revision of the SITC (Rev. 4), released internationally on 1 January 2007, along with the updated edition of the HS, was necessary because of the large number of significant changes to the HS since January 1988. SITC (Rev. 4) retains the overall structure of SITC (Rev. 3) and consists of the same number of one-digit sections and two-digit divisions and has one additional 3 digit group level code. Changes at the five-digit basic heading levels resulted in the deletion of 247 SITC (Rev. 3) basic headings and the addition of 84 new basic headings. As a result of the changes, strict period to period comparability was lost for a number of series.

5.31 The ABS implemented SITC (Rev. 4) with the release of the July 2008 reference month. Two information papers: Changes to International Trade Statistics July 2008, 2007 to 2008 (cat. no. 5368.0.55.009) and Impact of Introducing Revision 4 of the Standard International Trade Classification, 2008 (cat. no. 5368.0.55.010) were released prior to the changes in the classification. These information papers detailed how the changes would occur, the impact on the data, correspondences from old to new SITC codes and correspondences to the AHECC and Customs Tariff codes. To assist users in the interpretation of the data after the changes to the classification, export and import statistics were compiled on both the SITC (Rev. 3) and the SITC (Rev. 4) basis for financial years 2005-06 and 2006-07 and published in the second information paper specified at the beginning of this paragraph (cat. no. 5368.0.55.010).

5.32 Users of time series data should be aware that Australia's international merchandise trade statistics are presented on a SITC (Rev. 4) basis from July 2005 but prior to this the series are on a SITC (Rev. 3) basis. Statistics are available at the five-digit (the most detailed level), three-digit, two-digit and one-digit levels. It is possible to link data (with the exception of refined petroleum products) at the five-digit SITC level to the six-digit level of the HS classification. Refined petroleum products can only be linked from the five-digit SITC to codes at the most detailed HS levels i.e. eight-digit AHECC and ten-digit HTISC. The international HS to SITC correspondence are not always released along with updates to HS. ABS do not always predict the correct correspondences, so changes are sometimes needed to concordances at a later date.

5.33 The majority of countries and international organisations continue to use SITC for a variety of purposes, such as the study of long term trends in international merchandise trade and the aggregation of traded commodities into classes more suitable for economic analysis.

5.34 An example of the hierarchical structure of the SITC (Rev. 4) is included below:

5.35 The BEC classification was introduced by the UN in the early 1970s. It is a three-digit classification that groups commodities according to their main end use, that is, consumption goods, capital goods and intermediate goods. The BEC was designed as a means for converting data compiled in terms of SITC into these end-use categories.

5.36 The BEC categories are aligned as far as practicable with the System of National Accounts (SNA) framework. The BEC classification is suitable for the general economic analysis of international merchandise trade statistics and facilitates the use of this data in conjunction with other national and international economic statistics.

5.37 The BEC classification groups goods into nineteen categories. Sixteen of these basic categories make up the three broad end-use categories:

• consumption goods
• capital goods
• intermediate goods

A fourth category (other goods) includes the three remaining basic categories: 321 (Motor spirit); 51 (Passenger motor cars); and 7 (Goods not elsewhere specified). These three basic categories cannot be assigned to a single broad end-use category i.e. motor spirit and passenger motor cars are used by both industry (as intermediate consumption and capital goods respectively) and households (as consumption goods), and goods not elsewhere specified can be a mix of all three end use categories. For output presentation purposes, the ABS has combined the other goods category with the intermediate goods category.

5.38 There is a link available between the BEC three-digit level and the HS codes at the most detailed level i.e. the eight-digit AHECC and ten-digit HTISC. Correspondences are also available for the BEC three-digit level to the SITC five-digit level. When SITC (Rev. 4) was released the UN provided a new correspondence between the six-digit level of the HS and BEC. A correspondence between SITC (Rev. 4) and BEC is planned by the UN. Further information on BEC can be found in the information papers: Changes to International Trade Statistics July 2008, 2007 to 2008 (cat. no. 5368.0.55.009) and Impact of Introducing Revision 4 of the Standard International Trade Classification, 2008 (cat. no. 5368.0.55.010)

5.39 An example of the hierarchical structure of the BEC classification is included below:

5.40 The BoPBEC is a classification used by the ABS to disseminate import and import clearance data since 1994. It is based on the three end-use categories of the BEC classification: consumption goods, capital goods and intermediate and other goods and provides more detail than the BEC classification. There are some minor variations which affect motor spirit, passenger motor cars, a range of military equipment, video recording or reproducing apparatus, and certain types of other imports which are not classified according to kind. The three end use categories are further split based on SITC into 26 merchandise imports commodity groups.

5.41 By corresponding SITC categories to particular BEC categories, the classification attempts to classify international merchandise trade statistics, for general economic analysis, according to the main end-use of the commodities. However, it does not achieve complete alignment with the particular end-use to which commodities are put in specific circumstances. For example, passenger motor cars are classified as consumption goods in BoPBEC although some are acquired by businesses. If they were identifiable they could be classified to capital goods, and some parts and accessories of capital goods, which are classified as other goods, are in fact acquired as capital equipment.

5.42 The 26 merchandise imports commodity groups have been designed so that they: result in meaningful groupings which have sufficient value to warrant separate identification; provide an appropriate spread across all end-use categories without any unduly large residual components; and provide detail for major import commodities. The 26 merchandise imports commodity groups are further sub-divided into 107 commodity sub-groups for more detailed analysis.

5.43 Merchandise imports on a BoPBEC basis are published on the ABS website in International Trade in Goods (cat. no. 5368.0). Table 34 contains data at the detailed commodity sub-group level, as a monthly time series commencing from July 1989.

5.44 An example of the hierarchical structure of the BoPBEC classification is included below:

5.45 The ANZSIC was developed jointly by the ABS and Statistics New Zealand (SNZ). One of the guiding principles in the development of the ANZSIC was to align it as closely as possible to the International Standard Industrial Classification of All Economic Activities (ISIC). However, the degree of alignment is sometimes adversely affected by competing classification principles e.g. a different organisation or structure of Australian or New Zealand industry, or a lack of significance of some internationally recognised economic activities in the two economies.

5.46 The ANZSIC is used in Australia and New Zealand for the collection, compilation and dissemination of statistics on an industry basis. While it is designed for compilation of statistics on a standard industry basis, it can also be used to produce statistics on an industry of origin basis. ABS international merchandise trade statistics are most commonly presented according to the industry of origin but some export data are compiled on a standard industry basis.

5.47 Monthly export and import statistics are released on an industry of origin basis in the ABS publication: International Trade in Goods (cat. no. 5368.0):

• Table 32a contains ANZSIC 2006 export data, by FOB value, as a monthly time series commencing from July 2005
• Table 32b contains ANZSIC 1993 export data, by FOB value, as a monthly time series commencing from January 1988 and ending in June 2009
• Table 35a contains ANZSIC 2006 import data, by customs value, as a monthly time series commencing from July 2005
• Table 35b contains ANZSIC 1993 import data, by customs value, as a monthly time series commencing from January 1988 and ending in June 2009.

5.48 Industry of origin statistics are compiled by allocating statistical codes from the AHECC and the Customs Tariff to an ANZSIC industry class based on the primary activities of the industries with which they are most commonly associated i.e. commodity codes are assigned to industry classes by matching the commodities to the defined primary activities of classes in the ANZSIC. These are the industries most likely to have produced the traded items. All trade in a commodity is assigned to one industry class (which may or may not be the only industry which produces the goods). This is because international merchandise trade data are compiled from customs records which are based on the commodities traded and not the actual industry which produced the goods.

5.49 There are correspondences available from ANZSIC to the HS and the SITC codes (and vice versa) at the most detailed level of the classifications, see Appendix 6 in the Downloads tab.

5.50 An example of the hierarchical structure of ANZSIC 2006 is included below:

5.51 In international merchandise trade statistics, all apples and pears (which are primary to ANZSIC 2006 class 0134) will be classified as shown above irrespective of the industry undertaking the production. 

5.52 International merchandise trade data was first presented, on an industry of origin basis, according to the ANZSIC, in July 1993. In February 2006, a new version of ANZSIC (ANZSIC 2006) was released. The ABS began disseminating international merchandise trade data by ANZSIC 2006 in July 2009. To enable analysis over time the ABS compiled international merchandise trade data using both versions of ANZSIC so that:

• ANZSIC 2006 data is available for all periods from July 2005
• ANZSIC 1993 data is available for all periods from January 1988 to June 2009.

For more information, see the ABS information paper: Changes to International Trade in Goods Industry Statistics, July 2009 (cat. no. 5368.0.55.011).

5.53 The IOPC is an industry of origin product classification that has been specifically developed for the compilation and application of Australian Input-Output (I-O) tables. Because the I-O system describes the production and subsequent use of all goods and services, an I-O product classification needs to be defined in terms of characteristic products of industry sectors. The overall principles for the preparation of such an industry of origin product classification include:

• Homogeneity of inputs - each product or product group should consist of items that have similar input structures or technology of production. This principle is generally applied through the definition of each IOPC item in terms of the ANZSIC industry in which it is mainly produced.
• Homogeneity of disposition - each product or product group, having satisfied the first criterion, should consist of items that have similar patterns of disposition or usage. This principle is applied by reference to the description of source data items and information about the transport, distribution and product taxation margins applying to particular products.

5.54 The IOPC used in the annual release of Input-Output Product Tables in Australian National Accounts: Input-Output Tables (Product Details) (cat. no. 5215.0.55.001), is consistent with the 2006 edition of the Australian and New Zealand Standard Industrial Classification (ANZSIC) (cat. no. 1292.0).

5.55 Detailed HS product information (the 8 digit AHECC and the 10 digit HTISC) is assigned to IOPCs. This assignment is determined by forming judgements regarding the ANZSIC class(es) to which a HS item is primary.