Esta página no está disponible en el idioma seleccionado Spanish : Español y la proponemos por consiguiente en English : English.

How can the HS reflect needs to identify traded chemicals in relation to environmental measures? This was the central question at the second WCO Symposium on Greening the HS

07 noviembre 2022

A symposia, "Chemicals – reflecting the good, the bad and the revolutionary” was held on 25 October 2022, as the second symposium of the WCO Symposia series on “Visualising a Greener HS to support environmentally sustainable trade”.  

Trade measures and agreements around chemicals and the environment can be complex.  While chemicals are an essential part of society and trade, many chemicals have a negative environmental impact and many are regulated in trade for this reason.  But there are also environmentally preferable chemicals and chemicals essential to the creation of environmentally preferable goods and technologies.  There are also chemicals that related to remediation of existing environmental damage, including carbon capture and the clean-up of hazardous wastes.  However the HS identifies only a small fraction of the chemicals of interest to governments in relation to environmental matters.

Chemicals with a negative environmental impact that are controlled under international conventions have always been well-reflected within the Harmonized System (HS).  However, the pace of change is such that these only touch on a fraction of the chemicals which governments either control or are considering controlling. The question of how the HS can respond to this need is a major issue. 

In addition to chemicals with a negative impact, there is also the question whether there is sufficient specific identification of chemicals with a positive impact, for example chemicals used in cleaning dangerous substances from wastes, in the HS. 

The Director of Tariff and Trade Affairs (TTA) of the WCO, Mr. Konstantinos Kaiopoulos, in his opening speech, highlighted that the WCO, in line with other international organizations, is discussing how to contribute to the solutions for the problems of climate change, pollution, wastes and other environmental matters.  He indicated that the HS is the primary source of trade statistics and a key tool to help in the implementation of trade policy measures, including environmental policies.  The HS is also used during the discussions on trade agreements, including environmental ones by facilitating the identification of traded goods.  Most trade agreements contain a list of agreed goods which are identified in terms of the HS. The current HS which entered into force on 1st January 2022 contains specific headings and subheadings on certain goods subject to specific controls and monitoring under various multilateral agreements.

The Deputy Director of TTA, Ms. Gael Grooby, explained that the general purpose of these symposia is to discuss what the HS can, and should, be doing to help spotlight goods that are of high environmental importance, where there is direct benefit to identify these goods at the border.  From the environmental perspective, the interest of having a type of product individually specified in its own provision, is usually on goods that fall into one of three categories: the environmentally harmful, which need to be monitored or restricted, the environmentally preferable, which governments may wish to promote, and products used to mitigate or repair environmental damages, which governments may want to facilitate. 

Important note: as these symposia are open discussions of experts, all speakers speaking in the symposia are speaking on the basis of their personal expertise and experience, not as official viewpoints of their organisations unless otherwise specifically noted in their presentations.

The first speaker of the discussion panel, Mr. Roy Santana, from the Market Access Division of the World Trade Organization, noted the need to create new product categories in the HS to give visibility to certain environmental goods.  As the HS is the “lingua franca” of international trade and used by Customs and other border agencies to identify products and regulate trade, it is one of the most powerful trade facilitating measures introduced over the past 30 years.  Trade-related information, necessary to monitor and assess the impact of trade policies, typically relies on data gathered and organized around the HS codes.

But Mr Santana also highlighted that not all of the needs to identify goods at the border could be solved through the HS and it should be seen as part of a suite of tools that Customs had.  Consideration of other options used by Customs to provide for specific treatments at the border, such as national tariff lines, import licenses to regulate importation based on “end-use” coupled with post importation audits, and defining products and specific treatments in Customs measures outside of the HS framework, were also important.

Ms. Jacqueline Alvarez, the Chief of Chemicals and Health Branch, Economy Division, United Nations Environmental Programme, took participants through the complexities of trade in chemicals by focusing on the global supply and trade of mercury.  Showing how trade changed and adapted to changing regulation, illustrated well the difficulty of control and the need for global co-operation.  Of interest, the comparison of global production, with the recorded legal trade where HS codes do usefully specify mercury trade and with the estimated volume of use that is largely filled by illegally traded mercury, such as in artisanal and small-scale gold mining, in different regions provided some ability to estimate illegal trade.  However, monitoring and reporting of mercury movements from source to end use and disposal need to be further improved so that the organizations changed with enforcing trade regulations under the Minamata Convention are better informed.  The HS has an important role in this.

Ms. Melisa Lim, from the Secretariats of the Basel, Rotterdam and Stockholm Conventions, highlighted that the common objective of these conventions is to protect human health and the environment against hazardous chemicals and wastes.  Interestingly, she highlighted the issue of “regrettable substitutions”, where chemicals related to regulated chemicals (so having similar desirable properties in terms of usefulness) were seen as preferable alternatives to the regulated chemicals, but were later found to also cause similar problems and ended up themselves regulated.  In subsequent discussion, it was wondered if there was a need to identify certain related chemicals as a group, to ease implementation of national tariff changes for newly listed chemicals in the group more quickly than the five year review cycle allowed.

Ms. Lim also noted that one of the side effects of the increase in material reuse, was that persistent chemicals, the so-called ‘forever chemicals’ were increasingly present in unexpected products.

Mr. Hervé Schepers, Head of Sector for the ECICS and coordination of European customs laboratories at the European Commission, emphasised that the WCO and the HS have an important role to play: greening is necessary and changes have to be made rapidly.  He suggested that, in his view, in some cases, 5-year cycles should be shortened.  He also urged openness to new ways of identifying  goods for the HS, including certification schemes.

Mr. Schepers gave very practical examples of areas where changes could be made to support environmental policy.  But in doing so, he provided a timely reminder that to achieve a good result, very careful consideration needed to be given to the policy rationale, intended effects and whether the goods identified were the right goods to be specifying, particularly in relation to claims of environmental preferability.

Ms. Gael Grooby, after thanking the speakers and the participants, encouraged the continued deep discussion of these matters by HS experts in Customs Administrations and other interested stakeholder globally to help propel the Green HS conversation. 

The WCO welcomes participants to join for the next symposia on “The textile industry: the interaction between textiles and the environment” on 8 November 2022.  See our website for the symposia series for more details.