Singapore ranks high in OECD report on fake goods

Singapore ranks high in OECD report on fake goods

TWO in every 100 imitation goods seized worldwide in recent years have been traced to Singapore.

That is just 2 per cent - the bulk is accounted for by China - but it is enough to make Singapore the third biggest source of counterfeit and pirated goods, said a study by the Organisation for Economic Co-operation and Development (OECD).

The top two spots on this roll of dubious honour go to China - far and away the leader in this business, with two-thirds (63.2 per cent) of the world's fake goods traceable to it - and Turkey, which just pips Singapore by accounting for 3.3 per cent of the haul impounded.

But there is some fine print to Singapore's high ranking: The OECD's study, titled "Trade in Counterfeit and Pirated Goods", does not view the Republic as a tout in the market for products that infringe on trade mark, copyrights, patents and design rights. For sure, it is an important transit point for imitation goods, but it is not on what the OECD calls the list of top 15 "provenance economies in terms of their propensity to export counterfeit products".

In other words, phony products do not make up a big chunk of Singapore's exports, unlike places such as Hong Kong, China, Turkey and Greece; the study suggests that Singapore's economy is geared more to the production of genuine goods of high value, rather than knockoffs.

The OECD estimates that the global market for fake goods is worth US$461 billion in 2013 - or 2.5 per cent of total world trade.

The agency also suggests that countries with strong intellectual property (IP) frameworks tend to be more successful in keeping the trade in bogus goods from flourishing.

The Republic's IP protection has been ranked by the World Economic Forum and the US Global Intellectual Property Center to be among the world's best.

Economic agencies here approached by The Business Times for comment either said they were not the appropriate spokesman for this issue, or did not respond.

The OECD study, drawn from raw data culled from more than 500,000 fake goods confiscated globally between 2011 and 2013 by the global customs community, says that while virtually all countries are culprits, China is overwhelmingly the world's largest producer of such products, which range from footwear, leather bags, luxury watches to toys, medicine, spare parts and foods such as strawberries and coconut oil.

The study notes that middle-income and emerging economies both tend to have sufficient infrastructure, productive and technological capabilities to enable large-scale trade. "Yet, they may not have developed sound institutional frameworks, including IP-related legislation and enforcement practices."

The study declares that any product for which intellectual property adds economic value and creates a price differential is fair game for counterfeiters.

Among the faked goods confiscated, footwear made up the biggest seizure, followed by clothing and leather bags and wallets; luxury watches were just as exposed to copying.

The hardest hit brands include Rolex (watches), Nike (shoes), Ray Ban (eyewear) and Louis Vuitton (bags).

The industries most hit by the proliferation of fakes are mostly based in the well-off countries - the US, Italy, France, Switzerland, Japan and Germany.

But even emerging economies such as China are also victims. The study warns: "All innovative companies that rely on intellectual property to support their global development strategy are at risk, whether they are in developed or emerging economies."

Counterfeiting and piracy are a menace to innovation, which beats at the heart of any productive, forward-looking, knowledge-based economy, the study says.

Counterfeiting, beyond causing leaks in sales revenue for the legitimate businesses, can have life-threatening consequences, evidenced by the knock-offs in pharmaceuticals, machine spare parts and toys of poor quality.

The threat is growing. The study says the revival of global trade after the 2009 recession, more market openings, globalisation of value chains and booming e-commerce have boosted the trade in spurious goods in recent years.

And detecting the flow of faked goods has become trickier and more costly with the rise of the Internet and e-commerce, it added.


This article was first published on April 30, 2016.
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