On 2 -3 May 2019, the World Customs Organization (WCO) hosted the Global Conference on the future of the Harmonized System (HS), which gathered over 300 participants from Member Customs administrations, partner international organizations, industry associations, trade professionals, import/export companies and academia.

The Conference was endorsed by WCO Policy Commission in December 2018, with the objective to brain-storm on a possible strategic review of the HS, to look at how the HS is working across its user base, to see what might need to be done to improve its functioning and to make recommendations to the Policy Commission on whether to proceed with a Strategic Review.

In his opening address to the Conference, Dr. Kunio Mikuriya, Secretary General of the WCO, stated that as a flagship product of the WCO, the Harmonized System (HS) is one of the most fundamental instruments for facilitating today’s highly interconnected global trade system.  It provides a unifying structure to assist those involved in trade with navigating the complexities of trade across borders.  Given the rapid pace of change in technology and trade patterns as well as current levels of uncertainty in the global trade environment, this Conference aims to look at today’s HS from a whole-of-system perspective, consider how it is performing against the goals and expectations it carries and determine whether it could be improved against these criteria.  As all stakeholders will benefit from a strong and sustainable HS providing predictable classification for traded goods, solid trade data and an internationally shared understanding of the scope of its provisions, the Conference outcomes could play a crucial role in shaping the HS for the 21st Century.

The WCO Conference on the future of the Harmonized System recognised that the HS is an essential tool for our global trade system and plays a central role in trade and statistics.  It acknowledged the current strength of the HS as a multipurpose tool and a truly universal language of world trade and one of the WCO’s most successful instruments.  While expressing the view that the HS was still relevant and “fit for purpose”, the Conference also endorsed the idea that there was room for improvement to ensure that the HS remains compatible with 21st Century trade, changes in technology and the needs of users.

With this in mind, the Conference made the following recommendations to the WCO Policy Commission:

• The Policy Commission support the implementation of a project to further examine potential areas of change for the Harmonized System which, in the first instance, would:
  • Continue the consultation process;
  • Gather further information on the current issues in relation to the use of the HS;
  • Conduct a feasibility study examining the desirability and impacts, including initial cost and benefit analysis, of the proposals resulting from the Conference and the subsequent consultations; and
  • Make subsequent recommendations to the Policy Commission on the progressing of viable changes, including on the most appropriate bodies and mechanism to advance these changes
• In making this recommendation, the Conference stressed the need for a transparent and inclusive approach and for it to be done in an efficient and timely manner.

The WCO Policy Commission will meet in June 2019, and, at that time, look at the results of the Conference and decide upon next steps.