NEW DELAY REQUESTED FOR HARMONIZED SYSTEM

NEW DELAY REQUESTED FOR HARMONIZED SYSTEM

Members of the trade community screamed long and loud when Congress failed to implement the Harmonized Commodity Description and Coding System along with most of the rest of the industrialized world on Jan. 1 this year.

Now they're asking for another delay.Congress may ratify the Harmonized Commodity Description and Coding System this summer, but there is growing sentiment in the trade community to delay implementation until Jan. 1, 1989.

George Weise, staff member of the House Ways and Means Committee, said Rep. Dan Rostenkowski, D-Ill., chairman of the committee, is committed to sending the omnibus trade bill to the White House this summer for President Reagan's signature.

The harmonized system is a provision in the larger trade bill. The harmonized code system is one of the most important tools in the process of automating global trade. It establishes a worldwide, uniform system of customs codes.

Until the initial implementation of the system on Jan. 1, virtually every customs service in the world had different systems for classifying items. Now most of the world uses the harmonized system, whose product classifications hold from one nation to the next.

This enables computerized systems to monitor and process items without the human intervention that is essential when items must be translated from one category to another.

Beside being important for automation, coding is also an important trade tool. Coding systems grant each type of product a specific number. An item's classification and coding are often inextricably intertwined.

Thus an item's customs code is crucial in terms of its status as an import or an export. In this way codes help determine the impact of quotas, tariffs and duties.

If Congress ratifies the harmonized system by May, the code could become effective on July 1. A midyear implementation date would produce few benefits, Mr. Weise and other trade community members suggested.

Mr. Weise was addressing the annual meeting of the National Customs Brokers & Forwarders Association of America.

Many of the trading partners of the United States have approved the harmonized system and began using it Jan. 1.

Although there is little opposition in Congress to the harmonized system, it failed to pass last year because it is part of the Omnibus Trade Bill. Congress and the administration could not come to agreement on the larger trade bill.

Since some of the more controversial provisions of the trade bill have been deleted, Mr. Weise said, Congress could pass the legislation by midyear. When Congress approves the trade bill, it must also set an implementation date for the harmonized system.

Mr. Weise struck a responsive cord when he told the customs brokers he sees no reason to implement the harmonized system in midyear.

I see no benefits in a July 1 implementation. Let's do it right and implement it on Jan. 1 (1989), he said.

Eugene Nikliborc, a Chicago-area broker who chairs the harmonized system training program for the national brokers group, took an informal opinion poll at the annual meeting.

Between 75 percent and 80 percent of the brokers he talked with favored implementing the harmonized system next Jan. 1, even if Congress approves the code this summer, he claimed.

Many brokers feel they need five or six months to prepare their staff and their clients for use of the harmonized system, which will replace the Tariff Schedules of the United States, the coding system currently in use.

Eugene Milosh, president of the American Association of Exporters and Importers, said his membership also favors a Jan. 1 implementation date.

The harmonized system is expected to result in some classification changes in textiles, wearing apparel and shoe imports. A number of AAEI's members import those products and would prefer some extra time to prefer for the new code, Mr. Milosh said.

Art Litman, a Los Angeles broker who chairs the customs committee of the AAEI, said he feels the Customs Service will need five or six months to train its staff to process cargo under the new code, so a Jan. 1, 1989, date would be preferable.

Also, the Bureau of Census acknowledges that its job would be easier if the harmonized system becomes effective on Jan. 1, when the new statistical reporting year begins.

One of the few groups to favor immediate implementation of the new code is exporters, many of whom sell their products in countries which shifted to the harmonized system on Jan. 1.

Those exporters who use both Schedule B to satisfy U.S. requirements and the harmonized system to simplify matters for their foreign buyers would eliminate the duplication of efforts if the United States used the harmonized system.