RESTRICTED
WORLD TRADE S/CSC/W/13
17February 1998
ORGANIZATION(98-0585)
Committee onSpecific Commitments
STATEMENT OFTHE UNITED NATIONS STATISTICS DIVISION
Presented toWorld Trade Organization
Committee onSpecific Commitments
29October 1997, Geneva
International classifications liketheCentral Product Classification, arestatistical standards
developed andadopted byinternational agencies andrecommended forusebynational, regional and
international statistical institutions. They areusedforgrouping andorganizing statistical information
andphenomenarelatingtoawiderangeofeconomicandsocialissues.Thedevelopmentandmaintenance
ofindividual international classifications istheresponsibility ofvarious international organizations,
including theUnited Nations.
Asof1997, theUnited Nations Central Product Classification, Version 1.01replaces the
Provisional Central Product Classification2.CPC Version 1.0wasconsidered andapproved bythe
Statistical Commission atits29thsession in19973.Itwillbepublished in1998andwillbecirculated
tonational andinternational statistical offices, world wide.
WhenpreparingVersion1.0,themembersoftheclassificationssubgroupoftheVoorburgGroup
made significant contributions, withStatistics Canada playing thekeyroleofcoordinator intheprocess.
Theclassifications subgroup worked inclose cooperation withtheUnited Nations Statistics Division
onfinalizing therevision oftheservices partoftheCPC. Significant voluntary contributions of
Australia, Austria, Canada, France, TheNetherlands, United Kingdom, United States andEurostat,
made itpossible tocomplete CPC, Version 1.0.TheUnited Nations Statistical Commission encouraged
MemberCountriestostartimplementingCPCVersion1.0andtomakesuggestionstotheUnitedNations
onways thatitmaybefurther improved.
Indeveloping CPC Version 1.0,themain intention wastorevise andupdate those parts of
theprovisional document thatneeded further refinement inorder tochange itsprovisional status.
Particular attention waspaidtoservice products.
TheProvisional Central Product Classification (CPC) wasdeveloped forstatistical purposes
-preparing statistics ontheproduction, distribution andinternational trade ofgoods andservices.
In1991, statistical offices world-wide wereasked totakenoteoftheProvisional CPCandtotestit
soastoestablish itsapplicability andtogather elements required foriseventual improvement.
1Forthcoming United Nations publication ST/ESA/STAT/Ser.M/77 (Version 1.0).
2United Nations publication ST/ESA/STAT/Ser. M/77.
3StatisticalCommissionReportonthetwenty-ninthsession(ll-14February1997),EconomicandSocialCouncil,
Official Records, 1997, Supplement No.4(E/1997/24).S/CSC/W/13
Page2
Atapproximately thissame time, theGATT Secretariat utilized theProvisional CPC inthe
context oftheGeneral Agreement onTrade inservices (GATS). Texts withlegalstanding weredrafted
andtheyembodied extensive references totheclassification (MTN.GNS/W/120) .
Subsequenttothese1991decisionstoimplementtheProvisionalCPC,andtousetheProvisional
CPCinthecontext ofGATS, aninternational recommendation wasendorsed bytheUnited Nations
Statistical Commission tomove toCPCVersion 1.0.Thesource oftherevision layintheresults of
country testsoftheprovisional version aswellasinperceived changes intechnology andmode of
delivery ofalarge number ofservices. Thepurpose ofcalling theclassification version 1.0wasto
point outthattheinternational statistical community realized thattherelevance oftheclassification
could onlybemaintained ifitwere updated andrevised atregular intervals. Itisgenerally agreed
thatclassifications should undergo asfewalterations aspossible, andthatmajor revisions should not
occur more frequently thanevery fiveyears. Minor alterations, suchasupdating thelanguage ofthe
classification, correcting editorial problems, andproviding amendments toexplanatory notes through
theprovision ofrulings, however, should takeplace intheCPC asneeded, onanadhocbasis.
Oneresult oftheapproved revision oftheCPCwasthatthedescription ofclasscontent got
clarified andimproved. CPCVersion 1.0,forexample, includes revised andmoredetailed explanatory
notes onservice products. Thenotes arenot,however, intended tobeanexhaustive listofallthe
services provided under eachandevery heading. They areillustrative listsofservice provided, on
theonehand, andservices notprovided, ontheother hand, under eachandevery heading. During
therevision process, when adjustments weremade inwording, itwasnotnecessarily anintent tochange
theboundaries oftheclass. Inmany instances where theexplanatory notes wereexpanded toinclude
certain types ofservices notmentioned intheearlier provisional text,theintention wastoclarify the
content andborders ofeachclass, nottochange itsboundaries.
Thetwointernational initiatives of:(1)preparing andimplementing theCentral Product
Classification; and(2)using theCPCinthecontext ofGATS, areindependent andpotentially mutually
supportive activities. They areindependent, inthatoneisforthepurpose ofstatistics, andtheother
forthepurpose oflegal agreements. Bothinitiatives, however, require apurposeful description of
theservices thatareincluded orexcluded ineachcategory ofservice product. Thetwointernational
initiatives aremutually supportive, because when classifications andlegalagreements useharmonized
language andconcepts todescribe thecontent ofproducts, thentheyassist inestablishing standards
forthedescription ofgoods andservices inpolicy formulation andindatacollection. Policy analysts,
programme planners andstatisticians needup-to-date, andharmonized information onthissubject.
Before proceeding tothedetails, however, thereisamatter thatmustbethoroughly understood.
When statistical classifications areutilized forpurposes other thanstatistical comparability, suchas
when theyareutilized forlegalpurposes, cautionary notes arerequired. Forexample, ifalegaltext
oracontract makes reference toastatistical classification, those whoprepared thetextarefully
responsible fortheconsequences. Itwould beviewed astheir task, andnottheresponsibility of
classification committees, toexplain whatwasdoneinthelegaltextsorcontracts.S/CSC/W/13
Page3
Astatisticalclassification,andparticularlyonethatappliestotheproductionandtradeinservices
mustremain flexible andcannot stayunchanged fortoolongatimeinterms ofcontent, wording or
description. Classifications cannot befrozen intotextthatislegally binding where thereisnoprovision
forfrequent updating ofthetext,orclarification ofwording. Theresult would beself-defeating. After
awhile, thelegally binding textwould define objects (services) thathaveeither ceased toexistorelse
areoflimited significance. Itwould alsoomitoroverlook newservices thatareinkeeping withthe
spirit ofthetext,eventhough theywere notspecified atthetimewhen itwasdrafted. Thisiswhy
legalagreements mustbereviewed andattimes renegotiated; andoneofthereasons whyclassifications
must bereviewed andrevised.
Unlike transportable goods, services arenotnecessarily subject toobjective inspection and
recognitionbyaCustomsadministration.Noristherenecessarilyanadministrationinchargeofregularly
inspecting them andrecording thewayinwhich theyhavechanged, orreporting whether newforms
ofservices havesprung intobeing. There arefewer established procedures forrecording theseevents
innational registries, orattheborders ofcountries. Owing totherapidly changing nature oftechnology
andservice provision activities, worldwide, andowing totheinnovative requirements ofanewly
established statistical classification, regular updating, interpretation andrewording ofthedescription
oftrade inservices isinevitable.
Itisclearly theresponsibility ofstatistical agencies -national andinternational -toconsider
alltheimplications ofupdating andrevising theirclassifications. Likeforallother statistical standards,
theneedforstability inclassifications mustbebalanced withconsiderations totherateofspeed atwhich
classifications maybecome obsolete because offailure toupdate ormodify wording, ortomove toward
arevision onceitisrecognized thattechnological change hasovertaken them. Adecision nottomove
forwardunderrapidlychangingneeds,wouldseriouslyreducetheirrelevanceanduse.Tradenegotiators
andlegal advisors, along withother users ofstandard classifications, must recognize theneedfor
aninternational standard classification ofservices tobeupdated regularly forclarification ofwording
andinterpretation, andrevised afteraperiod ofapproximately every fiveyears, orelsegathering
statistical information tomonitor binding agreements would become close toimpossible.
Thefollowing technical notewilldescribe theaimoftherevision andgivedetailed examples
ofthemain changes.S/CSC/W/13
Page4
Technical Note prepared bytheCPC Sub-Group oftheVoorburg Group forthe
United Nations Statistics Division andPresented totheWorld Trade Organisation
Committee onSpecific Commitments heldon29October 1997, Geneva
CENTRAL PRODUCT CLASSIFICATION
TheUNStatistical Commission atitsmeeting in1991 decided toadopt theCentral Product
Classification asastandard classification ofgoods andservices albeit withaprovisional status. The
reason forthiswasthattheCommission wished togivestatistical offices thechance totestthe
classification thoroughly before adopting itasadefinitive standard.
TheVoorburg Group iscomposed ofrepresentatives fromstatistical offices inNorth America,
Europe, Australia andNewZealand, andJapan. TheVoorburg Group hadassisted inthedevelopment
oftheProvisional CPCandproposed itsadoption. After itsacceptance in1991, themembers ofthe
Voorburg Group tested parts oftheclassification intheirsurveys, mostly parts relating tobusiness
services, reported theirexperience andrecommended changes totheClassification. Aninterim report
wasprovided toUNSD. TheUNSD requested theVoorburg Group toundertake therevision ofthe
services partoftheCPC, based ontheirexperience. TheVoorburg Group setupaspecialized body
in1994, which hassince come tobecalled theCPCSub-Group oftheVoorburg Group. They were
asked toreview thereports andtherecommendations, reconcile them andrevise theCPCinthelight
ofthese recommendations andtheirownexperience. TheVoorburg Group decided torecommend that
therevision becalled CPCversion 1.Itwassubmitted toandaccepted bytheUNStatistical Commission
inFebruary 1996.
AIMS OFTHE REVISION
TheaimoftheSub-Group wasmainly toconcern itself withthedetailed classes ofthe
classification, andtoreview andrefine them, tomake them suitable forthecollection ofdatafrom
businesses, about theirproduction anduseofservices. However, theyalsofound itreasonable tomake
minor revisions totheclassification athigher levels, inorder tobring together inthestructure, similar
types ofservices, rather thantoleave them grouped inheterogeneous groups.
They regarded itasimportant toenhance therelevance oftheclassification by:
- creating classes forservices thatwerebecoming statistically significant orimportant
from ananalytical point ofview
- identifying important services thathadnotbeenseparately identified intheProvisional
CPC andcreating classes forservices forwhich nosuitable classseemed toexist
- unduplicating theveryfewcases ofoverlapping services thathadoccurred because
theProvisional CPC hadbeencreated from anindustry point ofview
- reviewing thetitles ofclasses andmaking them more meaningful andsuccinct
- changing thewayexplanatory notes hadbeenwritten fortheProvisional CPC and
creating itemized listsofexamples. (This measure hadadualpurpose. Ontheonehand
itserved toitemize services inalistforthecreation ofanindex bothtobeableto
addtothelist,toclarify thecontents oftheclassandtoexpand itasnewservices come
intobeing. Most ofthetime, thesame items named inthedescriptive titlewerenow
itemized. Inother cases, example items were added toclarify thecontent ofclassesS/CSC/W/13
Page5
butinneither casewasthereasubstantive change inthecontent oftheclasses forwhich
suchlistswere created. Only veryoccasionally cantheservice thathasbeenadded
bedescribed asonethathasemerged since thedevelopment oftheProvisional CPC.)
Because many statistical offices werestillintheearly stages ofdeveloping services statistics
programs theyhadnotallreached thestageofcollecting dataabout theproducts produced byallservice
industries butmany hadreached thepoint ofcollecting dataabout business services. Forthisreason,
business services became theprime objective ofthisreview.
ILLUSTRATIVE EXAMPLES
Abriefoverview ofsome CPCDivisions isprovided below toillustrate thekindofchanges
thathavebeenmade andtheirimpact ontheclassification.
CONSTRUCTION
Theonlychange tothescope ofthisdivision asawhole, istheelimination ofaseparate class
forsiteinvestigation under construction, asthiswasalready included asanengineering orarchitectural
service.
Inthisdivision, thedistinction made between thework ofgeneral contractors andthatofthe
special trades remains asbefore, thefirstdescribed interms ofthetypeofstructure putinplace, and
thesecond interms ofthetypeoftrade service provided.
Theclassificationhasbeenmarginallyre-organisedtoimproveit.Tomaketheexistingseparation
ofbuildings andcivilengineering work cleaner, sports facilities thatusedtobeentirely incivil
engineering, arenowdivided between indoor facilities thataregrouped withbuildings andoutside
facilities thataregrouped withcivilengineering. Sitepreparation isnowplaced between general
construction andspecial trades, asisassembly anderection ofprefabricated constructions.
Anexample ofanewgrouping isthatunder, general construction services, anewsub-class
groups thedetail oftypes ofbuilding thatalready existed, intotheanalytically useful categories of
residential andnon-residential buildings.
Examples ofthecreation ofmore useful detail are,theseparation oflongdistance pipelines
from longdistance communication andpower lines, andtheseparation oflocalpipelines from local
cables andrelated works under general construction. Asalso,theseparation ofpiledriving services
from foundation services; building framing from roofframing; water plumbing from drain laying;
andheating installation fromventilation andairconditioning, thatareallunder special tradeconstruction
services.
Other detail wascollapsed, forexample, theconstruction ofbridges andelevated highways;
andtunnels andsubways. Under sitepreparation theearlier distinction between sitepreparation for
mines ascompared tositepreparation forother construction hasbeenabolished.
Anumber oftitlesweresimplified andchanged toprovide anoverall description oftheservice;
forexample, structural steelerection services instead ofsteelbending anderection (incl. welding);
masonry services instead ofmasonry work; glazing services instead ofglazing work andwindow glass
installation work etc.butthere isnochange inthecontent ofanyofthese classes.S/CSC/W/13
Page6
TRADE
IntheProvisional CPC, Retail andWholesale Trade weredefined interms ofthegroups of
products traded. Theclassification isnowimproved withtherecognition oftwodimensions: thetype
ofservice andtheproduct traded. Wholesale Trade isnowdivided intotwomain groups, wholesale
tradeandwholesale tradeonafeeorcontract basisandRetail Trade isdivided intofivetypes ofretail
trade service. Alistofproducts isprovided thatcanbeassociated witheachoftheseven types of
Wholesale andRetail Trade Services. Itdoesnotmean thatalltheproducts inthelistarerelevant to
bothtypes oftrade nortothetypes ofservices detailed. Thelistofproducts hastobeselectively
associated witheachtypeofservice.
With respect totheoverall scope ofthetwotypes ofTrade taken together, acleaner splitis
nowmade between Wholesale andRetail tradeandthemaintenance andrepair ofmotor vehicles, motor
cycles andsnowmobiles hasbeenmoved toanother areaoftheclassification. IntheProvisional CPC,
thewholesale andretail trade ofmotor vehicles, motor cycles andsnowmobiles, theirmaintenance
andrepair, saleofparts andaccessories andeventheretail saleofmotor fuelhadallbeengrouped
together. Itwasdecided togroup these products differently, inCPC Version 1.0,toseparate them
andplace them inthethree broad classes ofwholesale, retail, andrepair andmaintenance.
MAINTENANCE AND REPAIR SERVICES
Thisisanexample ofasubstantive revision oftheclassification undertaken tobring likeservices
together.
Awhole newdivision or2digitcategory hasbeencreated tobring together intoonegroup,
alltypes ofmaintenance andrepair services from other parts oftheclassification.
TRANSPORT SERVICES
Theonlychange inthescope ofthisgroup ofservices istheinclusion ofmiscellaneous delivery
servicesunderLandTransport.MiscellaneousdeliveryserviceshavebeenbroughtunderLandTransport
frombeing under Couriers inTelecommunications, astheyareallservices delivered byroad, andthe
classincludes more thanjustcourier services. Though themovement byroadofhousehold goods is
nowmentioned intheexplanatory notes, thisservice, forstatistical purposes, waspartofLandTransport
intheProvisional CPC.
Titlechanges haveclarified, notchanged, thecontent oftheclasses. Itwasalways theintention
todescribe theservice offered, andthedescription ofthegoodfound insome ofthetitles, wasintended
tobeaproxy forthetypeofservice offered. Now, titleshavebeenchanged toclearly shifttheemphasis
fromthegoodcarried, tothetypeofservice offered. Inothercases, misleading titleshavebeenchanged,
suchasclasses described interms ofSea-going vessels andNon-seagoing vessels under Water Transport
havenowbeenmore correctly renamed Coastal andTransoceanic, andInland butthere hasbeenno
change inthecontent oftheclasses.
InSupporting andauxiliary transport services, anewclassforNavigational AidServices has
beencreated. Alsounder Travel Agency, Tour Operator andTourist Guide Services, twogroups of
services arenowdistinguished. Onegroup iscomposed ofTravel Agency Services, Tour Operator
Services andTourist Information Services, andtheother isTourist Guide Services. Thechanged nature
ofreservation services which arenowusedforreservations ofallkinds including accommodation and
entertainment inaddition toairlines, prompted themove ofthese services fromservices related toAir
Transport toTourist Information Services.S/CSC/W/13
Page7
ELECTRICITY DISTRIBUTION SERVICES; GAS AND WATER DISTRIBUTION SERVICES
THROUGH MAINS
Thisisanewdivision inCPCVersion 1.0.Inrecognition oftheimportance ofdistribution
services, theearlier approach ofcombining theproduction anddistribution ofthese utilities, inthe
goods partoftheCPC, hasbeenchanged andanewclasshasbeencreated fortheirdistribution services.
Production isleftinthegoods partoftheCPC.
Atthesame timetheprevious classes forthedistribution services ofthese items, onafeeor
contract basis, remain under Division 86.
PROFESSIONAL, SCIENTIFIC AND TECHNICAL SERVICES AND OTHER PROFESSIONAL,
SCIENTIFIC AND TECHNICAL SERVICES
Inthisareatheclassification hasbeenreorganized. There arenowtwogroups -
Professional, Scientific andTechnical Services andOther Professional, Scientific andTechnical
Services:
Thefirstincludes Legal services, Accounting, Financial auditing andBookkeeping services,
Advisory services related totaxation, andanewly identified class forInsolvency andreceivership
services.
Thesecond nowcovers Consulting services ofallkinds: Management Consulting, Business
Consulting andScientific andTechnical Consulting services n.e.c. aswellasArchitectural, Engineering,
Scientific andOther Technical Services, Advertising, Market Research andPublic Opinion Polling
Services, Photographic Services andPhotography processing Services.
Newly identified classes inthisareaareforEnvironmental consulting services under Scientific
andTechnical Consulting services andTranslation andinterpretation services under Other Technical
andScientific services n.e.c.
Amajor change inCPCv1,isthatComputer consulting hasbeenmoved herefromComputer
Services, agroup intheProvisional CPC. (Earlier theproduction ofpackaged software aswellas
computer consultancy relating tohardware andsoftware wereunder, Computer services. Though there
isstillsome debate about thisthereisevery likelihood thatpackaged software willbetreated asagood
intheHarmonized System. Alltheother computer services, other thancomputer processing services
havebeenbrought under consultancy services).
TELECOMMUNICATIONS SERVICES AND INFORMATION RETRIEVAL AND SUPPLY
SERVICES
Thisdivision hasbeenreorganized toinclude anewgroup identified forInformation retrieval
andsupply services, parts ofwhich arenewly identified, suchason-line andInternet access services
andothers which havebeenmoved fromother areas oftheProvisional CPC, suchasfromeducation.
Thescope ofTelecommunications Services inthisdivision hasbeenmarginally reduced by
deleting alltelecommunication related services from thedivision. Thiswasacaseofduplication in
theProvisional CPC. Anumber ofservices described astelecommunication related services thatwere
listed under telecommunications were, infact,already partofother classes oftheclassification.S/CSC/W/13
Page8
IntheProvisional CPCanumber ofdifferent services hadbeenidentified which wereconsidered
outdated bynow, soinCPC v.1onlythree large categories havebeencreated Wired, Wireless and
Satellite Telecommunication Services, tocover thesame overall content asintheProvisional CPC.
SEWAGE AND REFUSE DISPOSAL, SANITATION AND OTHER ENVIRONMENTAL
PROTECTION SERVICES
Thisisanexample ofadivision inwhich thereisnochange intheoverall content ofthisdivision
butithasbeenimproved bytheidentification ofnewclasses forNon-hazardous waste collection,
treatment anddisposal services andHazardous waste collection, treatment anddisposal services and
oneclassforother environmental protection services, under Refuse Disposal inSewage andRefuse
Disposal, Sanitation andOther Environmental Protection Services.
CONCLUSION
TheIntroductiontoCPCv1whichhasbeendistributedtotheCommitteebytheWTOSecretariat
outlines themajor changes thathavebeenmade totheProvisional CPC.
Forstatistical purposes, theCPCisacomprehensive classification ofallgoods andservices.
Afewnewclasses areidentified buttheyareusually made upofexisting services. Titles arechanged
andexamples areadded which, mostofthetime, make nosubstantive difference tothecontent ofthe
class. CPCv1doesmake explicit mention ofsome newservices thathaveemerged sincetheProvisional
CPCwasdeveloped. Inaddition, inCPCv1,thecontent ofafew,notall,divisions hasbeenmarginally
changed bymoving certain services from onedivision toanother.
TheProvisional CPChasnowbeenreplaced byCPCv1.Users caneither usethehierarchical
structure ofCPCv1ortheycanlimittheirusetothedetail ofCPCv1andregroup itfortheirown
purposes todefine theirownaggregations.
ACorrespondance thatshows theoverall relationship oftheProvisional CPCandCPCv1,
byrelating their classes, groups anddivisions isavailable from theStatistics Division ofthe
United Nations Secretariat.
__________