In a project that has been in the works for more than a year, it now appears that INDA, Association of the Nonwoven Fabrics Industry, has scored an initial success regarding a proposal to revise the global customs classification for hygiene absorbent products. And even though this project will likely take several more years to complete, we can report a significant step forward.
Indeed, after meeting with INDA's government affairs staff earlier this summer, the Bush Administration agreed to forward to the World Customs Organization (WCO) a proposal to change the current system of classifying baby diapers, feminine hygiene products, adult incontinence garments and the like so they will be identified on the basis of their function and not their composition.
With U.S. trade in absorbent hygiene products reaching nearly $1.5 billion in 2006, this is likely to be a matter of great interest to the nonwoven fabrics industry.
INDA began working to revise the internationally recognized customs classification of hygiene absorbent products after being approached by one of our member companies in 2006. INDA was approached because, presently, the international coding system used to identify traded products—the WCO's Harmonized Commodity Description and Coding System (HS)—classifies baby diapers, feminine sanitary napkins, adult incontinence products and similar items under several different HS "chapters" on the basis of the material of which they are composed. A baby diaper, for instance, may be classified as paper or cellulose under Chapter 48, or as textile wadding under Chapter 56, or as "articles of apparel" under HS chapters 61 or 62 depending on its composition.
This method was adequate for many years because absorbent hygiene products were made with fairly simple constructions that incorporated knit, woven or cellulosic-wood-pulp-based products. But there have been technological leaps and bounds in these products over the past decade or so such that the old descriptions often no longer apply.
Advances in materials science have lent themselves to new, high-end products that incorporate nonwovens, polyethylene film, and superabsorbent polymers (SAP) that are designed to increase absorption while dramatically reducing weight. Moreover, technology is continuing to evolve rapidly, with cutting-edge polymer science and extrusion technology continually redefining how thin nonwovens and films can become without sacrificing performance.
These advancements mean a far superior product for the consumer in terms of design, comfort and efficacy. But they also mean that converted goods are going to vary greatly from product to product in terms of nonwovens, polymers and cellulose and other inputs they contain.
This raises the likelihood that these products will be targeted by Customs authorities all over the world who question whether the appropriate identification has been used. Such questioning can delay shipments and otherwise hamper trade.
Creating A "Functional" Heading
One way around this problem is to approach the World Customs Organization (WCO)—one of whose main competencies it is to interpret and apply the Harmonized System Nomenclature—and request a new consolidated, "functional" classification for these products in Chapter 96 of the HS, the catch-all chapter reserved for "miscellaneous manufactured articles."
Before moving forward with this plan, however, INDA engaged various key stakeholders to gauge their level of interest. After learning they would not oppose such a move, INDA vetted the idea to a much larger group of interested parties during IDEA 2007 in April in Miami.
After again receiving positive feedback, INDA began the process of working with U.S. officials who would need to act as the conduit for communicating the proposal to the World Customs Organization. As noted at the beginning of this article, INDA met with officials from the U.S. International Trade Commission (ITC) and U.S. Customs and Border Protection (CBP) in late June, who, after hearing INDA's case for making the change, agreed to draft a proposal for submission to the WCO this fall.
The WCO updates and amends the HS every five years. The changes from the most recent review cycle were implemented this January, and a new cycle in already underway. The U.S. has said it will forward its proposal to the WCO's so-called Review Sub-Committee (RSC) this September, and the Review Subcommittee will consider proposals until 2008. But because the overall amendment process requires engaging each of the 171-member countries, it is a lengthy process and INDA members should not expect to see any changes until 2012 at the earliest. Until then, INDA will be sure to keep its members informed about the status of this proposal as it advances, ever so slowly.