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Counterfeiting, Piracy and US Trade Tariffs

12 July 2018

The arrival of US President Trump in the UK has brought ACG to reflect on how his recent trade policies might affect the global growth of counterfeiting and piracy. 

Recent OECD and EUIPO studies and reports have clearly highlighted numerous factors that drive IP crime. These include high profits, low risks of penalties, the reach of inexpensive technology, e-commerce, the involvement of transnational organised crime networks, stretched enforcement resources and, seemingly, insatiable consumer demand. 

However, high tariffs and taxes can also play a part. So could President Trump’s attempts to encourage US consumers to buy more homemade goods work against international efforts to combat counterfeiting and piracy? 

We know that globalisation and lower trade barriers can create greater opportunities for counterfeiters to ship and distribute their illicit products across the world, but higher trade tariffs could also have a negative impact. 

Price controls, in whatever form, often have an affect on the volume of available fakes. For example, if consumers are asked to pay more for foreign products, counterfeiters will quickly fill the gap. These criminals are commercially sensitive and rapidly see an opportunity to make cheaper and inferior versions of sophisticated products, more accessible. 

Unfortunately, while higher trade tariffs can sometimes discourage consumers from buying foreign luxury goods, the policy takes on another tint when the fake goods on offer have the possibility of causing an increased threat to public health and safety. And let’s not forget the fact that there are no tax revenues from counterfeiting. As Europol explain, much needed public funds are drained off as profits to organised crime, for use in other forms of criminality “profits from counterfeiting fund other forms of serious organised crime like human trafficking, money laundering or labour exploitation” [1] 

Moreover, in 2016 the US based International Chamber of Commerce published a report estimating that, as a result of counterfeiting and piracy, between 2 to 2.6 million jobs were lost globally in 2013, and projected losses of 4.2 to 5.4 million by 2022. [2] 

So Mr Trump the question is whether there is a need to re-think US policy on trade tariffs and whether this will actually result in more US jobs?   

About ACG

ACG represents more than 3,000 brands affected by this influx of fakes into the UK and delivers an international network of information, advice and contacts on all aspects of IP protection. Working with Government and law enforcement agencies since 1980, ACG is focused on providing an effective and sustained response to counterfeiting.

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