Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/299437 
Year of Publication: 
2023
Series/Report no.: 
IDB Working Paper Series No. IDB-WP-01494
Publisher: 
Inter-American Development Bank (IDB), Washington, DC
Abstract: 
Accurately classifying products is essential in international trade. Virtually all countries categorize products into tariff lines using the Harmonized System (HS) nomenclature for both statistical and duty collection purposes. In this paper, we apply and assess several different algorithms to automatically classify products based on text descriptions. To do so, we use agricultural product descriptions from several public agencies, including customs authorities and the United States Department of Agriculture (USDA). We find that while traditional machine learning (ML) models tend to perform well within the dataset in which they were trained, their precision drops dramatically when implemented outside of it. In contrast, large language models (LLMs) such as GPT 3.5 show a consistently good performance across all datasets, with accuracy rates ranging between 60% and 90% depending on HS aggregation levels. Our analysis highlights the valuable role that artificial intelligence (AI) can play in facilitating product classification at scale and, more generally, in enhancing the categorization of unstructured data.
Subjects: 
Product Classification
Machine Learning
Large Language Models
Trade
JEL: 
F10
C55
C81
C88
Persistent Identifier of the first edition: 
Creative Commons License: 
cc-by Logo
Document Type: 
Working Paper

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