Common use of Limitations and Constraints of the Classification Clause in Contracts

Limitations and Constraints of the Classification. In the Transportation Equipment Manufacturing industry, most activities that were identified in one country exist in the others. However, often an activity is not economically significant to the same degree in all countries. For example, a relatively broad NAICS industry was created for Aerospace Product and Part Manufacturing because this industry is less prominent in Canada and Mexico than in the United States. In Mexico, it is not possible to subdivide truck and bus body from trailer manufacturing for reasons of size. Size constraints in Canada and Mexico prohibit separating ship building from boat building. An operating rule has therefore been adopted for this industry subsector that the NAICS industries must be economically significant and publishable in all three countries. Each country will publish additional categories that comprise subdivisions of NAICS industries, to present data for activities that are nationally significant. For those users requiring detailed commodity information, each country will publish information on the products of these industries. Efforts are also underway to harmonize the commodity classifications to allow for greater comparability of these statistics. Relationship to ISIC Most NAICS 4-digit industries in this subsector are contained in Division 34, Manufacture of Motor Vehicles, Trailers and Semi-Trailers, and Division 35, Building and Repairing of Ships and Boats of the current International Standard Industrial Classification of all Economic Activities (ISIC, Revision 3) of the United Nations. There are, however, some differences between the two systems. ISIC has two divisions for transportation equipment, Divisions 34 and 35. NAICS, on the other hand, treats this as a single subsector with seven industry groups. NAICS treats some activities, such as the manufacture of engine pumps, motor vehicle electrical equipment, automotive fabrics, and automotive seats as the manufacture of automotive parts in the Transportation Equipment Manufacturing subsector. XXXX classifies these activities elsewhere. ISIC treats guided missiles, tanks and armored vehicles as machinery. NAICS includes these activities in Transportation Equipment Manufacturing because the production processes are similar to that of other transportation equipment. NAICS groups automotive hardware (door handles and similar parts) with other hardware because the production processes are similar, but includes stamping in automotive parts because auto stampings are produced in specialized establishments. The following NAICS industries belong to ISIC Divisions 34 and 35 with the exception of the activities indicated: Truck and Bus Body and Trailer Manufacturing (dump truck lifting mechanisms); Motor Vehicle Gasoline Engine and Engine Part Manufacturing (motor vehicle engine pumps); Motor Vehicle and Electronic Equipment Manufacturing (electrical and electronic motor vehicle equipment); Motor Vehicle Fabric Accessory and Seat Manufacturing (automotive fabrics, linings and trimmings); Other Motor Vehicle Part Manufacturing (filters for internal combustion engines, except motor vehicles); Aerospace Product and Part Manufacturing (aircraft pumps and guided missiles and parts); and Other Transportation Equipment Manufacturing (tanks and armored vehicles). Despite these differences that for the most part, are relatively small portions of the NAICS industries, this NAICS subsector is substantially the same as the combination of the two ISIC Divisions.

Limitations and Constraints of the Classification. There are a few factors that constrained the structure and detail of the classification in the area under consideration. In the Transportation Equipment Food Manufacturing industrysubsector, most activities that were identified in one country exist in the others. However, often an activity is not economically significant the way activities are combined in establishments differs to some extent in the same degree in all different countries. For example, a relatively broad NAICS industry was created for Aerospace Product and Part Manufacturing because this industry is less prominent in Canada and Mexico than in the United States, corn oil is produced in the same establishments that manufacture corn starch and corn sweeteners. In Mexico, it corn oil is not possible to subdivide truck produced in specialized establishments. All of the establishments that produce these products along with those producing other vegetable fats and bus body from trailer manufacturing for reasons of size. Size constraints in Canada oils, are combined into one NAICS industry, Starch and Mexico prohibit separating ship building from boat building. An operating rule has therefore been adopted for this industry subsector that the NAICS industries must be economically significant Vegetable Fats and publishable in all three countriesOils Manufacturing. Each country will publish additional categories that comprise subdivisions sub- divisions of NAICS industries, industries to present data for activities that are nationally significant. For those users requiring detailed commodity information, each country will publish information on the products of these industries. Efforts are also underway to harmonize the commodity classifications to allow for greater comparability of these statistics. Relationship to of ISIC Most NAICS 4-digit NAICS industries in this subsector these subsectors are contained in within Division 3415, Manufacture of Motor VehiclesFood Products, Trailers and Semi-Trailers, and Division 35, Building and Repairing of Ships and Boats of the current International Standard Industrial Classification of all Economic Activities (ISIC, Revision 3) of the United Nations. There are, however, some differences between the two systemsThe following NAICS industry cannot be assigned to an ISIC division. Wineries that grow their own grapes and then manufacture wine are classified in ISIC has two divisions for transportation equipment, Divisions 34 as an agriculture activity and 35. NAICS, on the other hand, treats this in NAICS as a single subsector with seven industry groupsmanufacturing activity. NAICS treats some activities, such as Some Changes to the manufacture National Classifications A significant change for all three countries is the inclusion of engine pumps, motor vehicle electrical equipment, automotive fabrics, and automotive seats as the manufacture of automotive parts malt manufacturing in the Transportation Equipment NAICS industry Flour Milling and Malt Manufacturing. Malt was formerly included in the beer manufacturing industry in Mexico and the United States and in Miscellaneous Manufacturing subsector. XXXX classifies these activities elsewhere. ISIC treats guided missilesin Canada, tanks but was moved to the flour milling and armored vehicles as machinery. malt manufacturing NAICS includes these activities in Transportation Equipment Manufacturing industry because the production processes are process used to manufacture malt is similar to that of other transportation equipmentthe flour milling industry. NAICS groups automotive hardware (door handles Grouping the production of starches and similar parts) with other hardware because vegetable fats and oils in a single class also is a significant change for all three countries. In Canada and the United States, corn oil is produced in the same establishments that produce starch products, while in Mexico, corn oil is produced in establishments that manufacture vegetable fats and oils. Thus, the difference in the production processes are similar, but includes stamping in automotive parts because auto stampings are produced in specialized establishmentsacross the three countries necessitated this grouping. The following creation of two industries for chocolate and confectionary products made from cocoa beans and confectionery made from purchased chocolate is a change for Canada since these industries were previously combined. The NAICS industries belong industry Non-Chocolate Confectionery Manufacturing is new for all three countries, and includes chewing gum. Other Miscellaneous Food Manufacturing includes the preparation of food to ISIC Divisions 34 and 35 with be consumed fresh (e.g., salads, sandwiches, etc. that are sold for immediate or almost immediate consumption). It is characterized by the exception preparation of food in volume that the manufacturer sells to a specialized establishment that sells it either through a service or a retail establishment. It is not specifically defined in the existing classification systems of the activities indicated: Truck three countries. The inclusion of bakeries that prepare the dough, bake the bread, and Bus Body sell on the premises in manufacturing is a major change for Canada and Trailer the United States. These establishments formerly were included in the retail sector in both countries. The manufacture of ice, an activity that up to now had been considered by the three countries to be part of food, has been transferred to beverage manufacturing. The grouping of Beverage and Tobacco Manufacturing into a subsector represents a major restructuring for all three countries. In Canada, the current two-digit groups for Beverages (dump truck lifting mechanismsCSIC 10, 11) and Tobacco (CSIC 12) have been combined in one NAICS subsector, Beverage and Tobacco Product Manufacturing. For Mexico, the current subsector Food Products, Beverages, and Tobacco has been split into two subsectors. In the United States, tobacco is a separate two-digit major group (Major Group 21, Tobacco Products) while beverages is a three-digit industry group, (Industry Group 208, Beverages); Motor Vehicle Gasoline Engine and Engine Part Manufacturing (motor vehicle engine pumps); Motor Vehicle and Electronic Equipment Manufacturing (electrical and electronic motor vehicle equipment); Motor Vehicle Fabric Accessory and Seat Manufacturing (automotive fabrics, linings and trimmings); Other Motor Vehicle Part Manufacturing (filters for internal combustion engines, except motor vehicles); Aerospace Product and Part Manufacturing (aircraft pumps and guided missiles and parts); and Other Transportation Equipment Manufacturing (tanks and armored vehicles). Despite these differences that for the most part, are relatively small portions of the NAICS industries, this NAICS subsector is substantially the same as the combination of the two ISIC Divisions.

Limitations and Constraints of the Classification. In the Transportation Equipment Electrical Equipment, Appliance and Component Manufacturing industrysubsector, most activities that were identified in one country exist in the others. HoweverThe way activities are combined in establishments differs to some extent in the different countries. For example, Canada cannot separate the manufacturing of household cooking equipment from refrigerators and freezers because these activities are often combined in Canadian establishments. Often an activity is not economically significant to the same degree in all countries. For example, a relatively broad NAICS industry was created for Aerospace Product and Part Manufacturing because this industry is less prominent in Canada and Mexico than in the United States. In Mexico, it is not possible to subdivide truck and bus body from trailer manufacturing for reasons of size. Size size constraints in Canada and Mexico prohibit separating ship building the manufacture of batteries from boat buildingaccumulators. An operating rule has therefore been adopted for this industry subsector that the For those reasons, some NAICS industries must in this subsector are broader than would be economically significant and publishable desirable in all three countriesa system that distinguishes as does NAICS among production processes. Each country will publish additional categories that comprise subdivisions of NAICS industries, industries to present data for activities that are nationally significant. For those users requiring detailed commodity information, each country will publish information on the products of these industries. Efforts are also underway to harmonize the commodity classifications to allow for greater comparability of these statistics. Relationship to ISIC Most of the NAICS 4four-digit industries created in this subsector are contained in can be assigned to Division 3428, Manufacture of Motor VehiclesFabricated Metal Products, Trailers Except Machinery and Semi-TrailersEquipment or Division 31, Manufacture of Electrical Machinery and Division 35Apparatus, Building and Repairing of Ships and Boats nec of the current International Standard Industrial Classification of all Economic Activities (ISIC, Revision 3) of the United Nations. Therefore, data tabulated using NAICS can readily be re-tabulated according to ISIC with the following exception: NAICS industry, All Other Electrical Equipment and Component Manufacturing includes non-electrical products of graphite or carbon because those nonelectrical products are made in the same establishments as electrical graphite and carbon products. In ISIC, this activity is included in Division 26, Manufacture of Other Non-Metallic Mineral Products. Some Changes to the National Classifications For Canada, the Electrical Equipment, Appliance and Component Manufacturing subsector is part of the existing Canadian classification’s Electrical and Electronic Products Industries major group. A large part of that major group will form part of the new NAICS Computer and Electronic Product Manufacturing subsector. As well, establishments that draw wire and insulate it are classified in Primary Metal Manufacturing in NAICS. This subsector includes electric signs that are classified in Miscellaneous Manufacturing in the current Canadian classification. The structures of the NAICS and Canadian classifications are similar. There areare fewer industries in NAICS, howeverbut national industries will provide the same level of detail as before. For Mexico, the Electrical Equipment, Appliance and Component Manufacturing subsector includes many of the activities currently in the Mexican classification’s Manufacture and Assembly of Machinery, Equipment and Electrical Accessories and Manufacture and Assembly of Electric and Non-Electric Appliances and Accessories for Home Use. However, NAICS includes the manufacturing of turbines and some differences between the two systems. ISIC has two divisions engines in Machinery Manufacturing, rather than in electrical machinery and it classifies electrical apparatus for transportation equipment, Divisions 34 and 35equipment in Transportation Equipment Manufacturing. The structure of the NAICS subsector is not similar to that of the corresponding areas of the Mexican classification. There are fewer industries in NAICS, on but national industries will provide the other handsame level of detail as before. For the United States, treats this as a single subsector with seven industry groupsmajor change to the structure encompasses the transfer of twelve industries out of the existing 1987 SIC major group, Electronic and Other Electrical Equipment and Components Except Computer Equipment, to the proposed new NAICS subsector, Computer and Electronic Product Manufacturing. NAICS treats some activities, The industries moved are those that manufacture electronic components such as the manufacture of engine pumps, motor vehicle printed circuit boards and semiconductors and related devices. Two industries that produce electrical equipment/components for motor vehicles, automotive fabrics, and automotive seats as the manufacture of automotive parts in aircraft etc. have been moved to the Transportation Equipment Manufacturing subsector. XXXX classifies these activities elsewhereAdditional changes for the United States for this subsector include moving the manufacture of electric signs from the Miscellaneous Manufacturing subsector and the creation of a new industry from the Primary Metal Manufacturing subsector for the manufacture of insulated wire and cable from purchased wire. ISIC treats guided missilesThe relocation of insulated wire from Primary Metal Manufacturing to the Electrical Equipment, tanks Appliance and armored vehicles as machinery. NAICS includes these activities in Transportation Equipment Component Manufacturing because subsector is a significant improvement of the classification with respect to the production processes are similar to principle as it now allows for a distinction between establishments that of other transportation equipment. NAICS groups automotive hardware (door handles first draw wire and similar parts) with other hardware because the production processes are similar, but includes stamping in automotive parts because auto stampings are produced in specialized establishments. The following NAICS industries belong to ISIC Divisions 34 then insulate it and 35 with the exception of the activities indicated: Truck and Bus Body and Trailer Manufacturing (dump truck lifting mechanisms); Motor Vehicle Gasoline Engine and Engine Part Manufacturing (motor vehicle engine pumps); Motor Vehicle and Electronic Equipment Manufacturing (electrical and electronic motor vehicle equipment); Motor Vehicle Fabric Accessory and Seat Manufacturing (automotive fabrics, linings and trimmings); Other Motor Vehicle Part Manufacturing (filters for internal combustion engines, except motor vehicles); Aerospace Product and Part Manufacturing (aircraft pumps and guided missiles and parts); and Other Transportation Equipment Manufacturing (tanks and armored vehicles). Despite these differences those that for the most part, are relatively small portions of the NAICS industries, this NAICS subsector is substantially the same as the combination of the two ISIC Divisionsonly insulate.

Limitations and Constraints of the Classification. In Most of the Transportation Equipment Manufacturing industry, most printing activities that were identified take place in one country exist in the others. However, often an activity It is not economically significant to the same degree possible in all countriescountries to identify separately production process industries or specialized end use production categories. For example, a relatively broad NAICS industry was created for Aerospace Product and Part Manufacturing because this industry is less prominent in Canada and Mexico than in the United States, unique production establishments exist for the printing of books and business forms, and these processes can be recognized in the U.S. classification. In Mexico, it is not possible to subdivide truck and bus body from trailer manufacturing for reasons however, book or business forms printers also print other types of sizeproducts. Size constraints Similarly, printing in Canada and Mexico prohibit separating ship building from boat buildingthe United States occurs largely in establishments that use a single printing process, such as lithographic or screen printing; in Mexico, diverse types of printing equipment are used in the same establishment. An operating rule has therefore been adopted For these reasons, only broad categories for this industry subsector that the NAICS industries must be economically significant printing (of all types) and publishable in all three countriessupport activities for printing were created for NAICS. Each country will publish additional categories that comprise subdivisions of NAICS industries, to present data for activities that are nationally significant. For those users requiring detailed commodity information, each country will publish information on the products of these industries. Efforts are also underway to harmonize the commodity classifications to allow for greater comparability of these statistics. Relationship to ISIC Most NAICS Both 4-digit industries in this subsector are contained in within Division 3422, Manufacture of Motor Vehicles, Trailers and Semi-TrailersPublishing Printing, and Division 35Reproduction of Recorded Media, Building and Repairing of Ships and Boats of the current International Standard Industrial Classification of all Economic Activities (ISIC, Revision 3) of the United Nations. There areHowever, howevertwo activities that are included in the NAICS Printing and Related Support Activities subsector are classified elsewhere in ISIC. Printing on textile articles is included in ISIC 1729, some differences between Manufacture of Other Textiles, NEC. Lithographic and gravure commercial printing of labels and tags is included in ISIC 2109, Manufacture of Other Articles of Paper and Paperboard. Some Changes to the two systemsNational Classifications For all three countries, publishing, including integrated publishing and printing establishments, has been moved out of the Printing and Related Support Activities subsector into the new NAICS Information sector. ISIC has two divisions for transportation equipmentFor Canada, Divisions 34 a major change to the Printing and 35Related Support Activities subsector is to move printing on purchased fabric articles (mostly “T” shirts) from the Clothing Industries major group to this subsector. NAICSThe production process involved here is printing, on and not the manufacture of clothing. Another change is the redefinition of certain types of printing, sometimes referred to as "quick printing." This printing is done in relatively small, often “store front” establishments; these establishments use small printers, and usually bundle printing with other hand, treats this as a single subsector with seven industry groups. NAICS treats some activitiesservices, such as mailing, fax and similar types of activities. Because printing is only one of a number of services performed in the manufacture same establishment, "quick printers" have been located in the NAICS Management, Employment, Administrative and Support Services subsector. This redefinition must be carefully constructed to ensure that commercial printing is not misclassified in the Management, Employment, Administrative and Support Services subsector. For Mexico, changes to this subsector are minor. For the United States, changes parallel those made for Canada. Printing on purchased fabric articles and the redefinition of engine pumpsquick printing were made for the United States, motor vehicle electrical equipment, automotive fabricsas they were in Canada. Printing on signs and advertising specialties was also moved here from its current U.S. classification in Miscellaneous Manufacturing in order to attain comparability with Canada and Mexico, and automotive seats as the manufacture of automotive parts in the Transportation Equipment Manufacturing subsector. XXXX classifies these activities elsewhere. ISIC treats guided missiles, tanks and armored vehicles as machinery. NAICS includes these activities in Transportation Equipment Manufacturing because the production processes are process is primarily printing. A similar to that of other transportation equipment. NAICS groups automotive hardware (door handles and similar parts) with other hardware because the production processes are similarchange, but includes stamping in automotive parts because auto stampings are produced in specialized establishments. The following NAICS industries belong to ISIC Divisions 34 and 35 with the exception of the activities indicated: Truck and Bus Body and Trailer Manufacturing (dump truck lifting mechanisms); Motor Vehicle Gasoline Engine and Engine Part Manufacturing (motor vehicle engine pumps); Motor Vehicle and Electronic Equipment Manufacturing (electrical and electronic motor vehicle equipment); Motor Vehicle Fabric Accessory and Seat Manufacturing (automotive fabrics, linings and trimmings); Other Motor Vehicle Part Manufacturing (filters for internal combustion engines, except motor vehicles); Aerospace Product and Part Manufacturing (aircraft pumps and guided missiles and parts); and Other Transportation Equipment Manufacturing (tanks and armored vehicles). Despite these differences that made for the most partidentical reasons, are relatively small portions of the NAICS industries, this NAICS subsector is substantially the same as the combination of the two ISIC Divisionsinvolves printing on tags and labels.