The trade in counterfeit and pirated products has grown steadily in the last few years. With a value estimated at $509 billion, it came to represent an estimated 3.3 percent of world trade in 2016, up from 2.5 percent in 2013, according to a new report by the OECD and the Intellectual Property Office of the European Union. Excluding domestically produced fake products and those being distributed over the internet, imports of counterfeits grew from 5 percent to 6.8 percent of imports into the EU during the same period.
Globally, footwear items made the biggest share of seizures of counterfeit goods in dollar terms in 2016, at 22 percent of the total, followed by clothing with a share of 16 percent and leathergoods with a share of 13 percent. We assume that athletic footwear and apparel took a large chunk of the total pie.
The report covers items that infringe trademarks, design rights or patents, and pirated products that are sold in breach of copyrights. Other important sectors that have been affected are electrical equipment, watches, medical equipment, perfumes and cosmetics, toys, jewelry and pharmaceuticals. Customs officials have observed an increase recently in imports of counterfeit branded guitars and construction materials.
The majority of the fake items seized at customs points in 2016 originated in mainland China and Hong Kong, along with the United Arab Emirates, Turkey, Singapore, Thailand and India. Counterfeiting is facilitated in free trade zones, the report noted. There, reduced taxes, customs controls and less stringent regulations drive economic activities.
Small parcels sent by post or express courier accounted for 69 percent of total customs seizures by volume over the 2014-2016 period – 57 percent via mail and 12 percent by courier - up from 63 percent over the 2011-2013 period.
Companies based in the U.S. were most affected in 2016, with local brands or patents making up 24 percent of the fake products seized on a global basis. The U.S. was followed by France with a share of 17 percent, Italy with 15 percent, Switzerland with 11 percent and Germany with 9 percent. Firms located in Singapore, Hong Kong and various emerging economies, including Brazil and China, have also been targets of counterfeit activities.
According to a separate report, German customs authorities confiscated fake products worth about €196 million in 2017, a figure that was 30 percent higher than in 2015, due especially to an increased use of e-commerce. However, the value of undetected or unreported fakes is likely to be much higher.