The Political Economy of the European Customs Classification

Customs classification is an important element in a country's trade policy. How a good is classified can affect the rate of duty that applies, the coverage of non-tariff barriers, and the formulation and application of rules of origin. Reclassifications can occur because of the introduction of a new product, but also because of protectionist motives. This paper is the first attempt at explaining these reclassifications. Focusing on the European Union, I examine whether the number of tariff lines in an industry result from the introduction of new products or from protectionist lobbying. The analysis focuses on 90 manufacturing industries over 12 years. Results suggest that protectionist lobbying does play a role in explaining changes in the EU's customs classification.