Economic research and trade policy analysis
Conclusions
The study highlights that incorporating NLP techniques into HS transposition processes offers substantial potential to enhance the efficiency and accuracy of tariff analysis, making it an invaluable tool for trade statisticians.
Tariff Verification
Both the simple and complex tariff scenarios discussed above indicate that a level of human verification is still ultimately required to ensure the quality of results after the automated tariff transposition, depending on the quality of the original tariffs datasets.
Introduction
Tariff line level Harmonized System (HS) transposition beyond the harmonized 6-digit level has long been a labor-intensive process in trade statistics.
Motivation
The regular work of the Regional Trade Agreements (RTA) section in the Trade Policies Review Division (TPRD) of the World Trade Organization is one among several statistical work streams that regularly require tariff line HS transposition.
Literature Review
Natural Language Processing (NLP) is one among many sub-branches of artificial intelligence (AI) that specifically deals with text as data.
Results
After running both transposition methods, the final output is a transposed tariffs table ("TC" table, in WTO IDB parlance) providing the full set of correlated HS codes in two HS nomenclatures, with each preferential tariff line allocated a corresponding MFN duty code.
Further Work
In future, further refinement and testing on diverse datasets is recommended to optimize these methods for broader application. For instance, other models such as OpenAI's Text Embedding model could be compared with SBERT to compare performance rates.
D.1. Introducing the data localisation shocks one by one
Figure A D.1 displays the projected change in real exports and real GDP for the four scenarios with the three types of costs (trade costs, WTP, and data management costs) entered one at a time. In Scenario A No data localisation, there is a small contribution of trade cost reductions, because the interaction of data flow and data localisation policies on trade costs is considered. Lifting data localisation policies would for some regions with less restrictive data flow policies imply a reduction in the costs of transferring data and thus an expansion of trade. At the global level the impact is marginal, because this only happens in isolated cases. The contribution of WTP/trust is larger to the expansion of real GDP and real exports, since the isolated regions would move to a safeguards regime with higher levels of trust when restrictive data localisation policies are lifted.
Identifying the potential economic impact of different broad approaches to data regulation
Modelling the economic impacts of data regulation can help support the policy debate by presenting stakeholders with information on the potential and relative opportunity costs associated with different types of data-related measures. This information can help policy makers think about different regulations that can successfully meet public policy objectives, including privacy and data protection, in a way that imposes the least possible burden on, or trade-offs in terms of, economic activity.
Abstract
This paper explores the application of Natural Language Processing (NLP) techniques to automate Harmonized System (HS) tariff line transposition, employing a three-stage process: unique 1:1 tariff code matching (Round 1), exact description matching (Round 2), and “smart” description matching (Round 3) using Artificial Intelligence (AI) and lexical similarity methods paired with harmonized 6-digit concordance and cosine similarity.
General note and abbreviations
The statistics related to applied tariffs and imports are calculated using data which are based on the HS nomenclature adopted by the country for the reference year. For statistics on bound tariffs, the calculations are based on the approved schedule of concessions of the WTO member.
Introduction
The World Tariff Profiles is a joint publication of the WTO, ITC and UNCTAD devoted to market access for goods.
Acknowledgements
The publication “Pathways to Sustainable Trade and Peace” was prepared under the general responsibility and guidance of Maika Oshikawa, Director of the Accessions Division.