What is the SITC classification and why is it so important for international trade?

The SITC classification (Standard International Trade Classification) is a classification system for tradable goods used for international trade statistics. This nomenclature facilitates the collection and analysis of trade data between different countries and regions, providing a clearer and more accurate picture of global trade.

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SITC in numbers: Composition and organization

The functioning of the SITC is based on the use of HS headings and subheadings as components of its categories.

SITC groupings reflect materials used in production, processing status, market practices, product uses, importance in world trade and technological changes.

In its present form, the SITC is composed of 10 sections, 67 chapters, 262 groups, 1023 subgroups and 2970 basic headings.

The key number that is formed gives in the first digit the section to which the product belongs, the chapter in the first two digits, the group in the first three digits, the subgroup in the first four digits and the resulting headings in case the subgroup is divided into the first five digits.

The 10 sections include: Foodstuffs and live animals (0); Beverages and tobacco (1); Crude inedible materials, except fuels (2); Mineral fuels and lubricants and related products (3); Animal and vegetable oils, fats and waxes (4); Chemicals and allied products, n. e.g. (5); Manufactured articles, classified principally according to material (6); Machinery and transport equipment (7); Miscellaneous manufactured articles (8); Goods and operations not elsewhere classified in SITC (9).

This is how the world managed to standardize international trade statistics

The history of SITC dates back to 1938 when the League of Nations published the report entitled Minimum List of Goods for International Trade Statistics.

In collaboration with governments and expert consultants, the United Nations Secretariat prepared in 1950 the first SITC, recognized as the “original SITC”.

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There were also countries that implemented the Customs Cooperation Council’s Tariff Nomenclature (CCC). The NAB grouped goods according to the material of manufacture.

As international trade increased in the 1960s, many countries began collecting data following the original SITC or related national classifications.

However, regrouping data based on the 1955 Customs Cooperation Council Tariff Nomenclature (CCC) involved considerable statistical complexity and obstacles for those countries with limited resources.

From the NAB to the current SITC classification

In 1961, the Modified SITC was introduced, which combined the customs nomenclature achieved by the NAB with an internationally accepted statistical classification, providing advantages in terms of tariff nomenclature as well as statistical classification.

Given the continued growth of trade, changes in geography and product diversification, in 1968 it became necessary to revise the SITC. In 1972 the NAB was transformed into the Customs Cooperation Council Nomenclature (CCCN).

In 1974, the United Nations Statistical Office approved a program to harmonize classifications of economic activities, goods and services, incorporating SITC in this process.

As a result, in 1974, SITC Revision 2 was approved, which that year found a one-to-one correspondence between its items and those of CACN. In other words, each NCCA element is associated with one and only one SITC item.

In 1981, the need arose to revise the SITC again using as a basis the Harmonized Commodity Description and Coding System (also known as the Harmonized System and identified by the acronym HS) headings, which agreed on the economic classifications.

The SITC, Revision 3, was approved in February 1985 and, subsequently, in mid-2004, the application/implementation of SITC Revision 4 began. In addition, Revision 4 introduced 87 new basic headings and deleted 238 from Revision 3.

In summary, the SITC Classification plays a vital role in international trade by providing a uniform and standardized structure for classifying goods, which facilitates the analysis and comparison of trade data at the global level.

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