STATISTICAL PAPERS Series M No. 53, Rev

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ST/ESA/STAT/SER.M/53/Rev.4DEPARTMENT OF ECONOMIC AND SOCIAL AFFAIRSSTATISTICS DIVISIONSTATISTICAL PAPERSSeries M No. 53, Rev.4CLASSIFICATION BY BROAD ECONOMIC CATEGORIESDEFINED IN TERMS OFTHE STANDARD INTERNATIONAL TRADE CLASSIFICATION, REVISION 3ANDTHE HARMONIZED COMMODITY DESCRIPTION AND CODING SYSTEM,UNITED NATIONSNew York, 2002THIRD EDITION (2002)

NOTESymbols of United Nations documents are composed of capital letterscombined with figures. Mention of such a symbol indicates a referenceto a United Nations document.ST/ESA/STAT/SER.M/53/Rev.4UNITED NATIONS PUBLICATIONSales No.ISBNCopyright United Nations, 2002All rights reserved

CONTENTSPageIntroduction .1Classification by Broad Economic Categories (BEC) .3Broad Economic Categories defined in terms of the Standard International TradeClassification, Revision 3 (SITC, Rev.3) and the Harmonized Commodity Descriptionand Coding System, Third Edition (2002) (HS02) .13AppendicesI.II.III.IV.V.SITC, Rev.3 basic headings in terms of BEC.SITC, Rev.3 basic headings with revised BEC attribution.HS02 subheadings in terms of BEC.SITC, Rev.3 basic headings not correlated to HS02 subheadings.HS02 subheadings not correlated to SITC, Rev.3 basic headings andtheir correlation to SITC, Rev.3 higher-level headings.iii4557618182

INTRODUCTIONHistorical background1.At its thirteenth session, in 1965, the Statistical Commission, recognizing thegrowing need for international trade statistics analysed by broad economic categories,recommended that data on large economic classes of commodities, distinguishing food,industrial supplies, capital equipment, consumer durables and consumer non-durables, becompiled for each reporting country and for the world and principal regions in order tosupplement the summary data already compiled on the basis of the sections of the StandardInternational Trade Classification (SITC).12.Following that recommendation, the United Nations Statistics Division prepared adraft classification of international trade by broad economic categories, which provided forsuch a compilation. Successive drafts of the classification were considered by theCommission at its fourteenth and fifteenth sessions, and were referred back to the Divisionby the Commission with specific guidelines for further study and consultation. At itssixteenth session, in 1970, the Commission reviewed a further draft (E/CN.3/408), which hadbeen prepared by the Division based upon the guidelines of the Commission and thecomments of selected countries and international organizations. The Commission wasunanimous in considering that the draft classification met the requirements which it hadspecified at previous sessions, and by its resolution 9 (XVI) it requested the SecretaryGeneral to publish the Classification by Broad Economic Categories (BEC) for internationaluse and as a guideline for national use.23.That original BEC was defined in terms of the divisions, groups, subgroups and basicheadings of the Standard International Trade Classification, Revised 3 and was issued in1971.4 It has since been revised three times. The first revision defined BEC in terms of theStandard International Trade Classification, Revision 2 5 and was issued in 1976. 6 Thesecond revision defined BEC in terms of the Standard International Trade Classification,Revision 3 (SITC, Rev.3) 7 and was issued in 1986. 8 Both were prepared and issued inresponse to requests by the Statistical Commission9, 10 and resolutions adopted by theEconomic and Social Council (resolutions 1948 (LVIII) of 7 May l975 and 1985/7 of 28 Mayl985). A third revision was issued in 1985 to provide full details of the SITC, Rev. 3headings corresponding to BEC categories 41* and 62*, which were incomplete in the1See Official Records of the Economic and Social Council, Thirty-ninth Session, Supplement No. 13 (E/4045);para. 30.2Ibid., Fiftieth Session, Supplement No. 2 (E/4938), chap. XIII.3United Nations publication, Sales No. 61.XVII.6.4Classification by Broad Economic Categories (United Nations publication, Sales No. E.71.XVII.12).5United Nations publication, Sales No. E.75.XVII.6.6Classification by Broad Economic Categories Defined in Terms of SITC, Revision 2 (United Nationspublication, Sales No. E.76.XVII.7).7United Nations publication, Sales No. E.86.XVII.12.8Classification by Broad Economic Categories Defined in Terms of SITC, Revision 3 (United Nationspublication, Sales No. E.86.XVII.24).9See Official Records of the Economic and Social Council, Fifty-eighth Session, Supplement No. 2 (E/5603),para. 118 (b).10Ibid., 1985, Supplement No. 6 (E/1985/26), para. 57 (f) and (i).1

second revision due to the omission of one page; it also incorporated a corrigendum and arevised introduction. The present fourth revision has been prepared to take into account themore detailed description of commodities provided by the 2002 edition of the HarmonizedCommodity Description and Coding System, 11 and information relevant to determining mainend-use which has become available since the publication of the original BEC; a moredetailed description of the characteristics of the fourth revision is contained in paragraphs 22to 25.The classification4.The fourth revised BEC is set out page belowCLASSIFICATION BY BROAD ECONOMIC CATEGORIES (BEC) 121* Food and beverages11* Primary111* Mainly for industry112* Mainly for household consumption12* Processed121* Mainly for industry122* Mainly for household consumption2* Industrial supplies not elsewhere specified21* Primary22* Processed11The Harmonized System (HS) was adopted by the Customs Co-operation Council in June 1983, and theInternational Convention on the Harmonized System entered into force on 1 January 1988 (HS88). At its twentyseventh session (22 February to 3 March 1993), the Statistical Commission recommended that countries adoptHS for the compilation and dissemination of their international trade statistics. The second, third and fourtheditions of HS entered into force on 1 January 1992, 1996 and 2002, respectively.12The asterisk following each reference to a BEC classification code number is a device to distinguish the BECclassification code number from the numbered sections, divisions and groups of SITC, Rev. 3, which is used todefine the composition of each BEC item.2

3* Fuels and lubricants31* Primary32* Processed321* Motor spirit322* Other4* Capital goods (except transport equipment), and parts and accessories thereof41* Capital goods (except transport equipment)42* Parts and accessories5* Transport equipment, and parts and accessories thereof51* Passenger motor cars52* Other521* Industrial522* Non-industrial53* Parts and accessories6* Consumer goods not elsewhere specified61* Durable62* Semi-durable63* Non-durable7* Goods not elsewhere specifiedDescription of the classification5.BEC includes 19 basic categories. The basic categories are those that are not furthersubdivided in the above listing of the classification, namely, 111*, 112*, 121*, 122*, 21*,22*, 31*, 321*, 322*, 41*, 42*, 51*, 521*, 522*, 53*, 61*, 62*, 63* and 7*. Each categoryof BEC is defined in terms of divisions, groups, subgroups and basic headings of SITC, Rev.3. The categories of BEC are a rearrangement and aggregation of the basic headings of SITC,Rev. 3; reflecting the end-uses of the commodities covered by each basic heading. EachSITC, Rev. 3 basic heading is allocated entirely to one BEC category. The allocation is doneon the basis of the main end-use of the commodities in each SITC, Rev. 3 basic heading,3

although it is recognized that many commodities that are traded internationally may be put toa variety of uses.6.BEC:(a) Distinguishes the five categories specified by the Commission at its thirteenthsession: food, industrial supplies, capital equipment, consumer durables and consumer nondurables;(b) Provides separate categories for "fuels and lubricants" and "transport equipment"in pursuance of the discussions of the Statistical Commission at its fourteenth session in1966, 13 and within those categories includes special subcategories for "motor spirit" and"passenger motor cars";(c) Provides, within the categories relating to capital goods, a distinction betweenequipment proper and parts and accessories;(d) Provides, within the categories for "Food and beverages", "Industrial suppliesnot elsewhere specified" and "Fuels and lubricants", a distinction between "primary"commodities and "processed" commodities;(e) Provides, within the categories for "Primary food and beverages", "Processedfood and beverages" and "Transport equipment" (other than passenger motor cars and otherthan parts and accessories), a distinction between commodities for industry and those forhousehold consumption.Purposes of the classification7.BEC was originally designed to be used mainly by the United Nations StatisticsDivision for the summarization of data on international trade by large economic classes ofcommodities (see para. 1 above). But it was also designed to serve as a means of convertingexternal trade data compiled on SITC into end-use categories that are meaningful within theframework of the System of National Accounts (SNA), 14 namely, categories approximatingthe three basic classes of goods in SNA: capital goods, intermediate goods and consumptiongoods. 15 Specifically, the subcategories of BEC can be aggregated to approximate the threebasic SNA classes of goods, thus allowing external trade statistics to be considered jointlywith other sets of general economic statistics, such as national accounts and industrialstatistics, for national, regional or world-level economic analysis.8.BEC was also expected by the Statistical Commission to serve as a guideline fornational classifications of imports according to broad economic categories. 16 However, at itssixteenth session, in 1970, the Commission recognized that countries might wish to adapt13See Official Records of the Economic and Social Council, Forty-second Session, Supplement No. 3 (E/4283),para. 34.14Ibid., Forty-fourth Session, Supplement No. 10 (E/4471), paras. 116 and 118.15A System of National Accounts (United Nations publication, Sales No. E.69.XVII.3), para. 1.50.16See Official Records of the Economic and Social Council, Forty-fourth Session, Supplement No. 10 (E/4471),para. 123.4

BEC for national purposes in different ways to meet national requirements, 17 and concludedthat, consequently, it was not to be regarded as a standard classification in the same sense as,for example, SITC. 18Correspondence of BEC with the basic classes of goods in SNA9.The correspondence of the 19 BEC basic categories with the basic classes of goods inSNA (capital goods, intermediate goods and consumption goods) is set out below.CLASSIFICATION BY BROADECONOMIC CATEGORIES (BEC)BASIC CLASSES OF GOODSIN SNA1* Food and beverages11* Primary111* Mainly for industryIntermediate goods112* Mainly for household consumptionConsumption goods12* Processed121* Mainly for industryIntermediate goods122* Mainly for household consumptionConsumption goods2* Industrial supplies not elsewhere specified21* PrimaryIntermediate goods22* ProcessedIntermediate goods3* Fuels and lubricants31* PrimaryIntermediate goods32* Processed1718321* Motor spirit(see para. 11 below)322* OtherIntermediate goodsIbid., Fiftieth Session, Supplement No. 2 (E/4938), para. 95.Ibid.5

4* Capital goods (except transport equipment), and parts and accessories thereof41* Capital goods (except transport equipment)Capital goods42* Parts and accessoriesIntermediate goods5* Transport equipment, and parts and accessories thereof51* Passenger motor cars(see para. 11 below)52* Other521* IndustrialCapital goods522* Non-industrialConsumption goods53* Parts and accessoriesIntermediate goods6* Consumer goods not elsewhere specified61* DurableConsumption goods62* Semi-durableConsumption goods63* Non-durableConsumption goods7* Goods not elsewhere specified(see para. 11 below)The basic classes of goods in SNA in terms of BEC10.The composition of the three basic classes of goods in SNA in terms of the basiccategories of BEC is shown below.1. Capital goodsSum of categories:41* Capital goods (except transport equipment)521* Transport equipment, industrial2. Intermediate goodsSum of categories:111* Food and beverages, primary, mainly for industry121* Food and beverages, processed, mainly for industry6

21* Industrial supplies not elsewhere specified, primary22* Industrial supplies not elsewhere specified, processed31* Fuels and lubricants, primary322* Fuels and lubricants, processed (other than motor spirit)42* Parts and accessories of capital goods (except transport equipment)53* Parts and accessories of transport equipment3. Consumption goodsSum of categories:112* Food and beverages, primary, mainly for household consumption122* Food and beverages, processed, mainly for household consumption522* Transport equipment, non-industrial61* Consumer goods not elsewhere specified, durable62* Consumer goods not elsewhere specified, semi-durable63* Consumer goods not elsewhere specified, non-durable11.The above groupings include only 16 of the 19 BEC basic categories since categories321* (Motor spirit), 51* (Passenger motor cars) and 7* (Goods not elsewhere specified) areomitted. Categories 321* and 51* are used extensively both for industry and for householdconsumption. Category 7* includes, among other commodities, a range of militaryequipment, postal packages and special transactions and commodities not classifiedaccording to kind, and can be a mix of SNA classes of goods. All three categories are ofparticular importance in international trade and of great interest to economists and othersstudying international flows of commodities. As indicated in paragraphs 16 and 18 below,they were considered to be sufficiently important to warrant establishment in BEC ofseparate categories. Users may choose to make their own assignments of the three categoriesof goods among the basic SNA classes of goods.Description of the categories12.BEC makes provision for the main categories originally requested by the StatisticalCommission (see paras. 1 and 6 above). In addition, in order to facilitate the construction ofaggregates which are approximately comparable to those of the three basic classes of goodsin SNA, a number of supplementary subcategories have been established to reflect the7

various end-uses of commodities. Some features of the commodity composition of each ofthe BEC categories are outlined below.13.In each of the categories 1* (Food and beverages), 2* (Industrial supplies notelsewhere specified) and 3* (Fuels and lubricants), the subcategories of primary andprocessed commodities have been established. In general, commodities have been classifiedas "primary" if they are characteristically products of primary sectors of the economy, i.e.,farming, forestry, fishing, hunting and the extractive industries. In addition, commoditieswhich are characteristically products of other sectors, such as manufacturing, are alsoclassified as primary if nearly all the value of the product is contributed by one of the primarysectors of the economy. For example, cotton undergoes physical transformation when ginnedbut almost all the value of ginned cotton derives from the agricultural sector; it is thereforeclassified in BEC as a primary commodity, and not as a product of the textile industry as it isclassified in the International Standard Industrial Classification of All Economic Activities(ISIC). 19 Canned and prepared foods, on the other hand, owe much of their value to thefood-processing industry; they are therefore generally excluded from the primary category inBEC and are classified as processed. Thus, a commodity is classified as primary if it is aproduct of farm, forest, fishing and hunting or an extractive industry to whose valuetransformation has made only a minor contribution. Waste and scrap materials are alsoclassified as primary commodities in BEC. If a commodity is not defined as primary it isclassified as processed in BEC.14.In category 1* (Food and beverages), in order to facilitate analysis in terms of SNAclasses, categories 11* (Primary food and beverages) and 12* (Processed food andbeverages), have been subdivided to provide for commodities "mainly for industry" and"mainly for household consumption". The main or usual end-use of many of the food itemsin BEC category 1* is household consumption, whereas other food items in that category areused as intermediate goods in industry. For instance, tea is mainly used for householdconsumption, as are processed canned foods. Wheat, however, is commonly supplied to themilling industry to produce flour, and flour in turn is commonly supplied to bakeries toproduce bread; therefore, both wheat and flour may be considered as intermediate goods forthe food industry. In addition, many food items are used in some instances for industry andin other instances for household consumption. In the case of category 11*, the great majorityof items are capable of dual use, and the only practical way to make an assignment betweenthe SNA classes of goods in this category is by adopting conventions. Thus, for example, theconventions are adopted that food grains, when traded internationally, are normally for useby industry, and that fresh fruit and vegetables, when traded internationally, are normally forhousehold consumption. In the case of category 12*, most items can be allocated to an SNAclass with greater certainty, but a considerable application of conventions is neverthelessinvolved in the case of several commodities.15.In category 2* (Industrial supplies not elsewhere specified), no breakdown beyondprimary and processed was called for because in this category assignment to SNA classes ofgoods concerns only intermediate goods.16.In category 3* (Fuels and lubricants), the processed component has been furthersubdivided to identify 321* (Motor spirit) and 322* (Other processed fuels and lubricants).19Now in its third revision; United Nations publication, Sales No. E.90.XVII.11.8

Motor spirit has been separately identified because of its importance as a commodity in trade.It is a commodity commonly used by both industry and consumers, that is, it can be both anintermediate and a consumption good. It is separately identified in BEC but not allocated toa specific SNA class (see para. 11 above). Commodities in categories 31* (Primary fuels andlubricants) and 322* (Other processed fuels and lubricants) are entirely intermediate goods.17.Category 4* (Capital goods (except transport equipment), and parts and accessoriesthereof), is divided into two subcategories, in which commodities are classified according towhether their main end-use is as capital goods - 41* (Capital goods, excluding transportequipment)- or as intermediate goods - 42* (Parts and accessories). This category includesmachinery, such as electrical generators and computers, and other manufactured goods, suchas medical furniture, which are used by industry, government and non-profit privateinstitutions. They are in fact producers' goods that are defined in SNA as part of fixed capitalformation and are thus capital goods. Parts and accessories essential for the maintenance ofmachinery, as well as unassembled components of machinery etc. that are used as suppliesfor assembling plants, are inputs to industry and are for that reason considered asintermediate goods (for the treatment of unassembled vehicles, however, see para. 18 belowunder category 5* (Transport equipment, and parts and accessories thereof)).18.Category 5* (Transport equipment, and parts and accessories thereof) covers finishedship

of BEC is defined in terms of divisions, groups, subgroups and basic headings of SITC , Rev. 3. The categories of BEC are a rearrangement and aggregation of the basic headings of SITC, Rev. 3; reflecting the end -uses of the commodities covered by each basic heading. Each SITC, Rev. 3 basic heading is allocated entirely to one BEC category .

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