Dossier

Role of the HS in the United Nations’ 2030 Agenda for Sustainable Development

By the Food and Agriculture Organization of the United Nations

Appropriate policies and sound legal and regulatory frameworks are necessary conditions to make international trade a virtuous engine to eradicate poverty and hunger, and to promote prosperity and sustainable development.

On 25 September 2015, the 193 Member States of the United Nations (UN) adopted the 2030 Agenda for Sustainable Development[1] that includes 17 Sustainable Development Goals (SDGs), 169 targets, and 232[2] indicators. The 2030 Agenda is fully owned by countries, and provides a comprehensive framework tackling all the multiple challenges faced by our planet, promoting a global and long term vision of sustainable development that encompasses, among all, the ending of poverty, hunger and malnutrition, climate change, inclusive growth, building resilient communities, and sustainable management of resources. Data on the monitoring of the 2030 Agenda and progress towards the SDGs is disseminated by the UN through the SDG Indicators Global Database[3].

The Food and Agriculture Organization (FAO) is fully engaged in this processed as the specialized agency of the UN that leads international efforts to defeat hunger and malnutrition, ensuring the sustainable use of natural resources, and as the custodian agency for 21 SDG indicators[4].

The SDG framework encompasses a wide range of actions for more inclusive and sustainable trade across 10 goals and 21 targets that include increasing the quantity and quality of exports in all countries[5]; widening the positive impact of natural resource exports[6]; exporting high-value locally made goods and services and promoting sustainable tourism[7]; and addressing illegal and informal trade[8].

Concerning food and agriculture, five FAO indicators heavily rely on international trade data in food and agriculture commodities for their calculation. These indicators are aimed at monitoring hunger[9], price volatility[10], illegal, unreported and unregulated fishing (IUU)[11], the value-add of sustainable fisheries[12], and access rights for small-scale fisheries[13]. An additional indicator related to agriculture and international trade is coordinated by the World Trade Organization (WTO) and concerns agricultural export subsidies[14].

Quantitative data is key to measuring and reporting the progress made by countries against the Sustainable Development Goals framework. Without quality trade data, it is not possible to monitor trade flows worldwide, and to support international trade policies for sustainable development. Not only data in terms of value (monetary terms) is important in this framework: data on quantities also – and sometimes mainly – provides critical information. However, challenges remain, particularly when it comes to detailed data on goods that are traded in the international market.

Therefore, a vital role has to be played in the 2030 Agenda by the WCO’s Harmonized System (HS) – as the backbone of international trade statistics – and by Customs administrations – as the key HS users and data providers on international trade in goods worldwide.

The FAO and the WCO have a long established partnership in the review of the HS. Over the past 10 years, the FAO has contributed to the revision of the HS with the aim of improving the coverage of the agricultural sector in HS 2012, HS 2017, and more recently HS 2022 – currently underway. This has resulted in a substantial increase in the number of sub-headings in the HS for agriculture, and fisheries and forestry, which has translated into significant improvements in the availability and quality of detailed trade data since 2012.

Statistics are a core function of the FAO, with statistics on trade in food and agriculture, and on fisheries and forest products being disseminated for over 50 years in 245 countries, regions and territories, and on over 2000 commodities. The increased detail in HS 2012 and HS 2017 has allowed the FAO to improve monitoring in the following SDGs-related areas work:

  • Food security, by way of producing better estimates of food available for consumption at country, region and global level, and to calculate their related nutritional intake thanks to a better correspondence between production (by species and product forms) and its trade. These figures are produced by the FAO through Food Balance Sheets[15] (FBS), which are based on quantity data compiled at single commodity level. The FBS are then used as a source for the calculation of the SDG indicators for hunger monitoring under SDG 2.

 

  • Endangered species, thanks to the more accurate identification of animals, fish, tree species and derived products, including those that are at risk of overexploitation and the object of illegal trade.

 

  • Sustainability of fish stocks, allowed by the more precise identification of detailed species traded as live, and in the form of processed commodities. Fish are among the most traded food commodity worldwide with developing countries representing more than half of the global fish trade. The increased detail in the HS on fish species supports, with data evidence, the effective management of fisheries resources, and also guides actions for the recovery of overexploited or depleted resources.

 

  • Sustainability of forest exploitation, through the improved representation of wood and non-wood forest products. The review of HS 2017 and the current review of HS 2022 has – and will even more in the future – improve the analysis of forest exploitation impacts on ecosystems, and of the effects of trade on deforestation and habitats; a more accurate calculation of the economic value generated from forests, and improved estimates of wood energy balances and carbon sinks/emissions.

 

  • Value chain analysis, detail in the HS according to the different degree of processing, supports statistical and economic analysis on how much agricultural, forestry and fisheries commodities are traded in the form of raw materials, processed or semi-processed products, or as by-products. For this reason, and even if trade volumes may be lower that the set threshold of 50 million US dollars, the FAO recommends the retention of these codes as they are used in the Organization as an important source of information that risks being lost otherwise.

 

  • Prices, and in particular the monitoring of commodity prices and trade distortion, including export subsidies and price anomalies.

 

Additional considerations concern the role of the HS in the context of international statistical classifications. Indeed, because it provides the backbone of international trade statistics, the HS stands at the centre of the international classification system, and cannot be considered as a standalone standard.

Also of particular importance to international statistics is the UN Central Product Classification (CPC Ver.2 and Ver.2.1[16]), whose primary purpose is to classify the goods and services that are the result of production in any economy, and the UN Classification of Individual Consumption According to Purpose (COICOP 2018[17]), which aims to classify and analyse individual consumption expenditures incurred by households, non-profit institutions serving households and general government according to their purpose.

For this reason, besides collaborating with the WCO in the review of the HS, the FAO has been working intensively with the UN – as the coordinator of international classification work – to review the classifications of products and of individual expenditures in the field of food and agriculture, including fisheries and forestry. This effort has now resulted in improved data reconciliation across international trade, production and consumption statistics.

Some practical implications of this important achievement are experienced again in the compilation of the FBS, where the three dimensions – international trade, production and consumption – are integrated into a single framework. The current versions of the three classifications allow for more balanced data – thus more accurate estimation of the food that is produced, traded and eventually available at country level for food consumption.

Despite all these significant improvement, however, challenges are still being faced. As already mentioned, quantity data along with monetary values are of great importance for the work of the FAO, as the basis of food statistics and the compilation of physical accounts. Yet availability and quality of data remain an issue for many commodities in many countries, thus hampering the compilation of international trade statistics. In addition, the harmonization of the HS beyond six digits is a critical challenge to the work of statisticians compiling international trade data, as significant differences exist in national nomenclatures beyond the six-digit level, which imply substantial efforts from statisticians to map codes across national versions.

As a final remark, National Statistical Offices (NSOs) are key institutions at the national level in compiling and disseminating trade statistics and the coordinator body of data reporting on SDGs. It is, therefore, imperative to emphasize the need for continued and strengthened cooperation between Custom administrations and NSOs as crucial partners in the maintenance of the HS, and in the production of quality trade data for the monitoring of SDGs.

More information
SDG-indicators@fao.org
FAO-Statistics@fao.org
www.fao.org/statistics
www.fao.org/sustainable-development-goals
www.fao.org/sustainable-development-goals/indicators

Authors and contributors: FAO Office of the Chief Statistician: Valentina Ramaschiello and Pietro Gennari (Chief Statistician); FAO Fisheries and Aquaculture Department: Stefania Vannuccini; FAO Forestry Department: Arvydas Lebedys, Simona Sorrenti and Giulia Muir.

[1] https://www.un.org/sustainabledevelopment/sustainable-development-goals.

[2] As of today, 50 organizations are responsible for the 232 indicators that compose the SDGs global indicator framework, which is coordinated by the Inter-agency and Expert Group on SDG Indicators (IAEG-SDGs) that was created at the 46th Session of the United Nations Statistical Commission (UNSC).

[3] https://unstats.un.org/sdgs/indicators/database.

[4] http://www.fao.org/sustainable-development-goals/indicators/en.

[5]3.b, 8.a, 9.1, 10.a, 17.1, 17.3, 17.10, 17.11, 17.12.

[6] 2.b, 2.c, 9.b, 14.4, 14.6, 14.b.

[7] 8.9, 12.b, 14.7, 14.b, 15.c.

[8] 15.7, 15.c, 16.4.

[9] 2.1.1 Prevalence of undernourishment.

[10] 2.c.1 Indicator of food price anomalies.

[11] 14.6.1 Progress by countries in the degree of implementation of international instruments aiming to combat illegal, unreported and unregulated fishing.

[12] 14.7.1 Sustainable fisheries as a proportion of GDP in Small Island developing states, least developed countries, and all countries.

[13] 14.b.1 Progress by countries in the degree of application of a legal/regulatory/policy/institutional framework, which recognizes and protects access rights for small-scale fisheries.

[14] 2.b.1 Agricultural export subsidies.

[15] http://www.fao.org/faostat/en/#data/FBS.

[16] https://unstats.un.org/unsd/cr/registry/cpc-21.asp.

[17] Endorsed at the UN Statistical Commission in March 2018, https://unstats.un.org/unsd/statcom/49th-session/documents/#documentation.

21 SDG indicators

The FAO is the custodian agency of 21 SDG indicators that measure: the prevalence of undernourishment and the state of food insecurity (2.1.1, 2.1.2), income and productivity of small-scale food producers (2.3.1, 2.3.2), the sustainability of agricultural production (2.4.1), the biodiversity of plants and animals (2.5.1, 2.5.2), investment in agriculture (2.a.1), food price volatility (2.c.1), women’s access to agricultural land ownership (5.a.1, 5.a.2), water use efficiency and water stress (6.4.1, 6.4.2), food loss and waste (12.3.1), fish stocks, sustainable fisheries, illegal fishing and access rights for small-scale fishers (14.4.1, 14.6.1, 14.7.1, 14.b.1), and sustainable forests and mountains (15.1.1, 15.2.1 and 15.4.2).