Security & Fraud

OECD Report: Rise In Counterfeit Goods Harms Global Economy

OECD: Counterfeit Goods Harm Global Economy

A new study by the Organisation for Economic Co-operation and Development (OECD) shows that trading in pirated and counterfeit goods has risen significantly, according to a report in the Financial Times.

The increase has the effect of stifling a global economy driven by innovation and new ideas. The value of fake and counterfeit products went from $461 billion in 2013 to $509 billion in 2016. That’s an increase of 3.3 percent, up from 2.5 percent in 2013.

“Illicit trade in fake goods is a major challenge in an innovation-driven global economy. It has a negative impact on the sales and profits of affected firms, as well as broader adverse effects on the economy as well as public health, safety and security,” said Christian Archambeau, executive director at the European Union Intellectual Property Office.

The problem is especially apparent in the European Union, where almost 7 percent of imports are trademark- and copyright-infringed. In Germany, Italy, France and Switzerland, officials confiscated more than half of all counterfeit products in the EU.

The most commonly counterfeited items are shoes, makeup and children’s toys, but they also include phones and accessories, clothes and watches. Because they’re not regulated, the items can be dangerous and pose health and safety risks for consumers, which is especially true for food and medical items. In fact, medical items and pharmaceuticals are usually the most-seized products.

In addition to the health risks, copyright and intellectual property infringements harm “one of the key value generators and enablers of success in competitive markets,” the report said. Intellectual property “plays a crucial role in promoting innovation and driving sustained economic growth.”

The country that manufactures the most fake goods is China, although India, Malaysia, Pakistan and Turkey are also in the mix. Turkey in particular seems to be making fake leather, food and makeup, and exporting those counterfeit goods to the EU.

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