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The Administration of the Vocabulary of International Trade: The Adaptation of WTO Schedules to Changes in the Harmonized System
Published online by Cambridge University Press: 06 March 2019
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A common language is indispensible for reaching and maintaining understanding in all inter-subject relations, including international relations. One element of today's common language in the field of international trade in goods is the Harmonized Commodity Description and Coding System (the Harmonized System/HS) which is maintained by the World Customs Organization (WCO). The HS provides for a common vocabulary by classifying all traded goods according to a nomenclature. This common vocabulary facilitates, and avoids misunderstandings in, communications about products. It thus reduces transaction costs and consequently is of eminent economic importance for today's globalized trade relations. Take for example WTO tariff negotiations with respect to chocolate: While one party might assume that the product commonly referred to as white chocolate is included in the negotiations on chocolate, the other trading partner might assume that it is excluded for the reason that it does not contain cocoa and thus does not qualify as chocolate. Reference during the negotiations to specific positions of the HS nomenclature reduces the probability of such misunderstandings. If during the exemplary tariff negotiations parties would refer to the HS heading Chocolate no party could later claim that the negotiated tariff should also apply to white chocolate since the HS classifies the product which is commonly referred to as white chocolate under the heading Sugar Confectionary (and there under a specific sub-position) whereas chocolate containing cocoa is classified under the heading Chocolate. The vocabulary of the Harmonized System is a point of reference for many legal norms which relate to international trade in goods – in my example the legal obligation to comply with the negotiated tariff concession (Art. II GATT) and not to discriminate against like products (Art. I, III GATT). While the HS provides the vocabulary, these norms provide the grammar of a common language of international trade.
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- Thematic Studies
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- German Law Journal , Volume 9 , Issue 11: Special issue - The Exercise of Public Authority by International Institutions , 01 November 2008 , pp. 1481 - 1512
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- Copyright © 2008 by German Law Journal GbR
References
1 To be sure, even when the HS is used, classification of products will frequently be contentious. For example, the dispute between the European Communities on one side and Brazil and Thailand on the other concerning the classification of salted frozen boneless chicken cuts. See EC – Chicken Classification, WT/DS269, 286/R (panel report), WT/DS269, 286/AB/R (Appellate Body Report).Google Scholar
2 The metaphor of the HS as a vocabulary therefore seems more fitting than that of the HS as the language of international trade which is often used. For example, the WCO referring to the HS as a universal economic language. See http://www.wcoomd.org/home_wco_topics_hsoverviewboxes_overview_hsharmonizedsystem.htm; Petros C. Mavroidis, Trade in Goods. The GATT and the Other Agreements Regulating Trade in Goods 73 (2007) (depicting the HS as supplying the common language to describe goods).Google Scholar
3 In the following when I speak of schedules of concessions I mean schedules of concessions with respect to goods which are annexed to the General Agreement on Tariffs and Trade (GATT) and according to Art. II:7 GATT form an integral part of the GATT.Google Scholar
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50 L/5470/Rev. 1, Annex 1, para 4.2.Google Scholar
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134 Proposal by Sweden, TAR/W/88 (23 September 1993).Google Scholar
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137 The so-called TRIPS waiver (WT/L/540) was granted to facilitate the importation by Members of generic drugs in case of public health crises, or the Kimberley waiver (WT/L/518) which was granted to legalize trade restrictions implementing the Kimberley Process Certification Scheme to combat trade in so-called blood diamonds.Google Scholar
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