Standard International Trade Classification (SITC): A Comprehensive Guide

The Standard International Trade Classification (SITC) system, used to classify international visible trade, categorizes goods with varying levels of detail from single-digit sections to five-digit levels. This guide provides an in-depth exploration of its historical context, structure, importance, and applicability.

The Standard International Trade Classification (SITC) is an invaluable system used globally to classify the goods involved in international visible trade. It enables countries and international organizations to compare and analyze trade statistics in a consistent and coherent manner.

Historical Context

The SITC was first developed by the United Nations in the 1950s. Over time, the system has undergone several revisions to adapt to evolving trade patterns and economic landscapes. The most recent version is SITC Revision 4, which was introduced in 2006.

Structure of SITC

SITC classifies goods into sections, divisions, groups, subgroups, and items:

• Sections (Single-digit): The broadest category (e.g., 0 for Food and live animals, 1 for Beverages and tobacco).
• Divisions (Two-digit): More specific than sections (e.g., 01 for Meat and meat preparations).
• Groups (Three-digit): Further subdivisions (e.g., 011 for Meat of bovine animals, fresh, chilled or frozen).
• Subgroups (Four-digit): More detailed classifications (e.g., 0111 for Meat of bovine animals, fresh or chilled).
• Items (Five-digit): The most detailed level (e.g., 01111 for Meat of bovine animals, fresh or chilled, bone-in).

Key Events in SITC Development

1. 1950: Introduction of the first SITC version.
2. 1975: Introduction of SITC Revision 2, to incorporate trade changes.
3. 1986: SITC Revision 3, aligning with the Harmonized System (HS) classifications.
4. 2006: The latest, SITC Revision 4, reflecting new economic realities.

Importance of SITC

• Comparability: Allows for consistent comparison of international trade statistics.
• Analysis: Facilitates economic analysis by providing a common language for trade data.
• Policy Making: Aids governments in formulating trade policies and strategies.
• Market Research: Assists businesses in market analysis and strategy development.

Applicability

• Governments: For analyzing and formulating trade policies.
• Businesses: For market research and strategy.
• International Organizations: For global trade analysis and reporting.
• Academia: For economic research and studies.

Example of SITC Classification

Consider the trade of apples:

• Section: 0 (Food and live animals)
• Division: 05 (Fruit and vegetables)
• Group: 051 (Fruit, fresh or dried)
• Subgroup: 0511 (Fruit, fresh)
• Item: 05111 (Apples)

Related Terms

• Harmonized System (HS): Another classification system that is more detailed than SITC.
• International Trade: The exchange of goods and services across borders.
• Trade Statistics: Data that quantifies trade activities.

Comparison

• SITC vs HS: The HS is more detailed and is primarily used for customs purposes, while SITC is more suitable for economic analysis and reporting.

FAQs

Why use SITC if there is HS?

SITC is particularly valuable for economic analysis, offering a structure more conducive to statistical comparison over time.

Can SITC be used for services trade?

No, SITC is designed for visible trade, i.e., physical goods.

How often is SITC updated?

Revisions are periodic, reflecting significant changes in trade patterns.

References

• United Nations Statistics Division: SITC

Summary

The Standard International Trade Classification (SITC) remains a critical tool for classifying and analyzing international trade. From its historical inception in the 1950s to its latest iteration, SITC provides an essential framework for comparing and understanding trade data across the globe. By categorizing goods into multiple levels, it ensures a detailed and systematic approach to international trade analysis, benefiting governments, businesses, and researchers alike.