As global trade continues to expand, the movement of chemicals across borders raises critical questions: Are these substances driving societal advancement, or do they pose hidden environmental threats? The World Customs Organization (WCO) recently addressed this complex issue in its workshop titled "Chemicals – Rethinking Their Benefits, Risks, and Transformation," exploring how the Harmonized System (HS) of tariff classification can better identify and manage traded chemicals to support environmental sustainability.
Workshop Objectives and Key Challenges
Held on October 25, 2022, as part of WCO's "Visualizing a Green HS to Support Environmentally Sustainable Trade" series, the workshop examined trade measures and agreements related to chemicals and the environment. While chemicals play vital roles in modern society and international commerce, many have significant negative environmental impacts and are subject to trade controls. Conversely, some chemicals benefit the environment or are essential for producing eco-friendly technologies, while others help remediate existing damage through applications like carbon capture and hazardous waste cleanup.
The current HS system effectively identifies chemicals regulated by international conventions with negative environmental effects. However, these controls cover only a fraction of substances that governments monitor or consider regulating. A pressing challenge is adapting the HS framework to better address this gap while also improving identification of environmentally beneficial chemicals.
HS System as a Policy Tool
Konstantinos Kaiopoulos, WCO's Director of Tariff and Trade Affairs, emphasized in his opening remarks that the organization collaborates with international partners to address climate change, pollution, waste, and other environmental issues. He noted that the HS system serves as the primary source for international trade statistics and a crucial instrument for implementing trade policies, including environmental measures. The current HS edition, effective since January 1, 2022, includes specific headings and subheadings for goods subject to control under particular multilateral agreements.
Gael Grooby, WCO's Deputy Director of Tariff and Trade Affairs, explained the workshop series' broader goal: examining how the HS system can highlight environmentally significant goods for direct identification at borders. From an environmental perspective, creating separate HS entries typically serves three purposes: monitoring or restricting harmful substances, promoting eco-friendly alternatives, and facilitating trade in goods that mitigate or repair environmental damage.
International Perspectives on HS Adaptation
Roy Santana from the WTO's Market Access Division stressed the need for new HS product categories to increase visibility of environmental goods. He described the HS as international trade's "common language," used by customs authorities for product identification and trade management – one of the most impactful trade facilitation measures of the past three decades. Trade-related information for policy monitoring and evaluation largely depends on data organized around HS codes.
Santana cautioned that not all border identification needs can be met through the HS system, which should be viewed as part of a broader toolkit. He highlighted alternative approaches like national tariff subdivisions, import licenses based on end-use regulations (combined with post-import audits), and product definitions in non-HS customs measures.
Jacqueline Alvarez of UNEP's Chemicals and Health Branch illustrated chemical trade complexities using global mercury supply chains. By showing how trade patterns shift with regulatory changes, she demonstrated control challenges and the necessity for international cooperation. Comparing global production, legally traded mercury recorded under HS codes, and estimated usage (partly supplied by illicit trade in artisanal gold mining) helps approximate black market volumes. However, improved monitoring and reporting of mercury flows from sources to final uses and disposal would better inform organizations enforcing the Minamata Convention's trade provisions, where the HS system could play a significant role.
Addressing Emerging Chemical Challenges
Melisa Lim from the Basel, Rotterdam, and Stockholm Conventions Secretariat noted these agreements' shared objective: protecting human health and the environment from hazardous chemicals and waste. She highlighted the "regrettable substitutes" problem – where alternatives to regulated chemicals (with similar desirable properties) initially appear preferable but later prove equally problematic, requiring subsequent regulation. Discussions raised whether identifying related chemical groups could enable faster national tariff adjustments for newly regulated substances, avoiding dependence on the HS's five-year review cycle.
Lim also observed that increased material reuse has inadvertently spread persistent "forever chemicals" into unexpected products.
Hervé Schepers, head of the EU's Customs Classification System and Laboratory Coordinator, urged rapid HS adaptations for environmental goals, suggesting shortened review cycles in some cases and openness to innovative identification methods, including certification schemes. While providing practical examples of HS modifications supporting environmental policies, he emphasized carefully considering policy rationales, intended effects, and whether identified goods truly merit special designations – particularly for claimed environmental benefits.
Concluding the session, Gael Grooby encouraged customs HS specialists and global stakeholders to continue these critical discussions advancing the green HS dialogue. The WCO invited participants to its next workshop on November 8, 2022, examining "The Textile Sector: The Interface Between Textiles and the Environment."