The European Observatory on Infringements of Intellectual Property Rights and the Organisation for Economic Co-operation and Development (OECD) are carrying out a series of studies on the global trade in counterfeit and pirated products, analysing the impact on the economy, and the share of international trade affected by the phenomenon. In particular, the main goal of this study is to assess quantitatively the value, scope and trends of trade in counterfeit and pirated tangible products.

These studies focus primarily on infringement of copyrights, trademarks, design rights, and patents, but do not cover intangible infringements, such as on-line piracy, or infringements of other intellectual property rights.

The reports follow, complete and develop a previous study from OECD on the Economic Impact of Counterfeiting and Piracy, published in 2008.

We hope these findings will support governments and policy-makers in assessing and tackling the economic damage that counterfeiting and piracy create across the world.

António Campinos, Former Executive Director of the EUIPO

 

Effects and magnitude of the phenomenon

While free trade zones bring real benefits for businesses and host countries, they can facilitate trade in counterfeits due to lax regulatory control. The report shows that the larger the role of free trade zones in a country’s economy, the greater the value of counterfeit in that economy’s exports. The report analyses a unique dataset, which combines data on the characteristics of free trade zones in more than 130 countries with EUIPO-OECD dataset on counterfeit export intensity.

 

Main findings

  • An additional free trade zone within an economy is associated with a 5.9% increase in the value of counterfeit exports;
  • A 1% increase in the value of export from free trade zones increases the value of counterfeit exports by 0.28%;
  • A 1% increase in the number of firms operating in free trade zones increases the value of counterfeit exports by 0.29%;
  • A 1% increase in the number of employees working in free trade zones increases the value of counterfeit exports by 0.21%;
  • A 1% increase in the value of investments in free trade zones raises the value of counterfeit exports by 0.17%;
  • Free trade zones employ 66 million people and generate over USD 500 billion in direct trade related value added;
  • The most recent estimates put the number of FTZs worldwide at over 3 500 zones in more than 130 economies;

     

 
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