2002 (H2), HS 2007 (H3) and HS 2012 (H4), in collaboration with staff from the United Nations Department of Economic and Social Affairs, Trade Statistics Branch of the Statistics Division.

Conversions and correlations between classification systems are a primary challenge for this exercise. The main reason motivating the change in the underlying products’ nomenclature is that currently all countries report their trade data in HS nomenclature to the United Nations Statistics Division (UNSD), which are then converted into SITC Rev.3 for the users’ convenience, but due to complex relationships between different commodity classifications, the conversion from single HS six‐digit codes may sometimes correspond with higher levels of the SITC Rev.3 classification (e.g. a 3‐digit code, instead of a 5‐digit code), consequently leading to a “break‐in‐series”, especially in the years when the new HS editions are introduced. As a consequence of this, it becomes necessary to establish the definition of GVC goods in each edition of the HS nomenclature, which is straightforward to do through conversion tables in the cases when an SITC Rev.3 code corresponds to one or to various codes in HS editions (1‐to‐1 and 1‐to‐n relationships), but entails more difficulty whenever more than one SITC Rev.3 codes are mapped to a single or to various codes in HS editions (n‐to‐1 and n‐to‐n relationships). The latter cases are not covered by conversion tables and must be addressed through the use of correlation tables instead,<sup>5</sup> which differ from conversion tables in that they maintain the relationships at the most detailed level of SITC and HS nomenclatures –therefore eliminating the need to take into account relationships at higher level of aggregation‐, but their use entails some added complexity. Summing up, in order to most accurately map all relevant SITC Rev.2 codes into the different HS nomenclature editions, a three‐step process was followed. First, conversion tables were used whenever possible (1‐to‐1 and 1‐to‐n correspondences). Second, since conversions to higher level of SITC codes are included in the matching of 1‐to‐1 and 1‐to‐n relationships, it is necessary to check that the resulting codes are indeed part of the full correlations, eliminating any codes that do not satisfy this condition. This step finalizes with the identification of two sets of definitions: a “simple” definition arising from conversion tables and covering 1‐to‐1 and 1‐to‐n correspondences, and an “extended” definition calculated from correlation tables, covering all possible types of correspondences (1‐to‐1, 1‐to‐n, n‐to‐1, and n‐to‐n). Finally, under the simplifying assumption that the scope of any HS code does not differ from one edition to another, the codes in each HS edition are combined into a single combined HS nomenclature list, which is in turn used in UN Comtrade to extract the data originally reported in HS nomenclature, either as reported by countries or as mirror flows (e.g. country exports based on values of partners’ imports from said country, and country imports based on values of partners’ exports to said country). The new WITS GVC module, readily available online for use by the general public, includes downloadable versions of product lists comprising all products in the covered GVC categories, in each of the five different HS nomenclature editions (H0 to H4), and has an interface that allows alternative levels of aggregation of GVC categories, as well as the possibility to choose whether to work with reported or mirror data.

For the present analysis, we work with mirror trade data from UN Comtrade in H0 nomenclature (HS 1988/92). The choice of the oldest HS edition responds to the objective to cover the largest possible time period, which comprises 27 years spanning 1988‐2014, whereas the choice of the mirror over the reported version of the data is based on the better coverage offered by the former in the case of lower income countries, whose data reporting is often less reliable and subject to gaps in data. Data on other country‐ level indicators such as GDP (nominal and in constant 2005 USD) come from WB World Development Indicators (WDI). The analysis is carried out using all available data in the mirror dataset, covering the

> 5 Conversion and correlation tables are available for download at United Nations Statistic Division website (http://unstats.un.org/unsd/trade/conversions/HS%20Correlation%20and%20Conversion%20tables.htm).

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