Overseas Trade Classification (Changes) (Hansard, 26 March 1953)

§ Mr. P. Thorneycroft

Yes. The Government propose to change the commodity classification for recording United Kingdom trade to one based closely on the Standard International Trade Classification, with effect from January, 1954.

The following is a description of the changes:

It has been decided as a result of recommendations made by the United Nations that certain changes should be made in the classification of commodities used for the United Kingdom overseas trade statistics. These 93W changes, which will take effect from 1st January, 1954, affect primarily the order and grouping of commodities; and the content of the individual headings in the Import and Export Lists will not in general be changed for this purpose.

The Economic and Social Council, of the United Nations in July, 1950, approved the Standard International Trade Classification (S.I.T.C.)^✶ submitted to them by the Statistical Commission. They urged all Governments to make use of this either by (1) adopting this system of commodity classification with such modifications as might be necessary to meet national requirements without disturbing the framework of the classification, or (2) rearranging their statistical data in accordance with this system for the purpose of international comparison. The United Kingdom has been an active supporter of the attempt to establish this new international classification for trade statistics, and while so far we have met our obligations to the United Nations by adopting method (2), the Government have reached the conclusion that it is now desirable to adopt method (1) and use the S.I.T.C., with certain modifications as our basic classification for trade statistics.

A change in classification inevitably means some loss in comparability with past figures, but this drawback will be mitigated as far as possible by reworking some of our past data on the basis of the new classification. The chief advantages which it is hoped will be gained from the change are firstly, that we shall be in a better position to compare United Kingdom trade for different commodities with that of other countries, quite a number of which are now publishing trade statistics classified according to the S.I.T.C, and to aggregate the trade of, say, the sterling area or Commonwealth for different commodity groups. Several of the colonial territories have already adopted the new classification or are planning to do so, and it is anticipated that by 1954 at least four-fifths of the trade of the colonial territories will be classified according to the S.I.T.C. It is hoped that other Commonwealth countries may find it possible to adopt the S.I.T.C. or to publish figures on this basis, since this would be a big step towards assisting the study of Commonwealth and Sterling Area problems.

Secondly, the change will facilitate the provision of statistics for international organisations such as the United Nations and O.E.E.C. for which special tabulations on the basis of the S.I.T.C. have to be prepared at present. Thirdly, the new classification is in several respects an improvement from a purely national point of view on the present one, which has been changed little since 1920— e.g., it brings together all fuels in one class and separates electrical from other machinery.

In designing the form which the United Kingdom classification should take, it has been found necessary to make some modifications to the S.I.T.C. to adapt it for national use. In place of the ten broad S.I.T.C. Sections,

^✶ Published by the Statistical Office of the United Nations—Statistical Papers Series M, No. 10 (Second Edition). On sale at Her Majesty's Stationery Office.

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classes similar to, though not exactly comparable with, the three main ones used at present for food, raw materials and manufactures will be retained while adding one further class for fuel. The main grouping below this level will be Divisions conforming very closely to those in the United Nations classification. At the most detailed level the individual headings of the Import and Export Lists will be retained as indicated above, although these will be re-arranged into S.I.T.C. order. This means that the basic data from which the trade figures are compiled will not be altered in content.

The decision to change the United Kingdom overseas trade classification to conform as closely as possible with the S.I.T.C. would in any event entail extensive alterations in the monthly Trade Accounts and the opportunity has been taken to reconsider their form. The practice of showing figures for selected Import or Export List headings or aggregates of headings will not be altered, but certain changes will be made in the headings selected in order to facilitate the provision of figures on a S.I.T.C. basis. It is also hoped to introduce some general changes to improve the statistics given, for example whereas the present Accounts give country figures for commodities selected on a somewhat arbitrary basis the country tables to be given in the new Accounts will instead in most cases be based on S.I.T.C. "groups." On the whole they will, therefore, cover larger groups of commodities than at present, thus enabling more comprehensive country information to be given.

The operation of these major changes entails a great deal of work which it would be extremely difficult to carry through if further changes had to be made in the 1954 Import and Export Lists as a consequence of the annual review of the individual headings. It is therefore necessary to postpone for a year the normal work of reviewing these headings and any proposals which are put forward for amending those in the 1953 Lists will be considered with a view to introducing changes, where they are acceptable, in the 1955 Lists rather than in those for 1954.

Further inquiries about this article may be addressed to the Board of Trade, Statistics Division, Lacon House, Theobalds Road, London. W.C.I.