New York, N.Y, June 4, 2007 – Representatives of America’s top global companies applauded today’s release of a landmark report from the 30-nation Organization for Economic Cooperation and Development (OECD) on the economic costs of counterfeiting and piracy. Release of the report’s summary was timed to coincide with this week’s G8 summit in Germany, where the issue is on the agenda for leaders of the world’s leading economies. The full report will be released this summer.
The United States Council for International Business welcomed the OECD report, “The Economic Impact of Counterfeiting and Piracy.” The report includes new figures on the scope of international trade in fake goods, and concludes that the magnitude and effects of the problem are “of such significance that they compel strong and sustained action” from governments, business and consumers. The report recommends increased enforcement of existing laws and tighter cooperation between governments and industry to make current policies more effective.
“Policy makers need to pay close attention to what the OECD is saying,” according to USCIB President Peter M. Robinson. “Counterfeiting and piracy take a heavy toll on governments, businesses of all sizes and of course consumers. It’s wholesale theft, by well organized criminal networks, that endangers consumer health and safety, harms the reputation of companies, cuts into tax revenues and discourages much-needed foreign investment.”
The OECD report says the flow of illicit cross-border trade in so-called “hard goods,” i.e., tangible counterfeit and pirated products, could be up to $200 billion, a figure greater than the national GDP of some 150 countries. But it concedes that this represents just the tip of the iceberg, since the OECD did not tally the cost of domestically produced and consumed counterfeit and pirated products, or the economic costs of online piracy. The report concludes that, if these factors were included, “the magnitude could be several hundred billion dollars more.”
The report provides clear indications that product counterfeiting and piracy are growing – and affect virtually every country, industry and product category. The OECD notes that, while governments are increasingly acknowledging the problem and putting laws and regulations in place, more effective enforcement is critical.
For the past several years, business representatives and others have been pushing the G8 to more forcefully address the growing tide of counterfeiting and piracy. Last week, a group of top executives from around the world wrote to G8 leaders under the umbrella of Business Action to Stop Counterfeiting and Piracy (BASCAP), an initiative of the International Chamber of Commerce, urging them to take bigger, bolder steps to beat back counterfeiting and piracy.
The private sector contributed data and analysis to the authors of the report, working through the Business and Industry Advisory Committee (BIAC) to the OECD, and it wants to see the OECD do more to assess the scope of the problem and explore solutions.
“The OECD report points out that these illegal activities have significant effects on governments, industry, consumers and society at large from lost innovation, creativity, investment, jobs and overall economic growth and development, especially in developing markets,” said Richard Johnson of the law firm Arnold & Porter, who chairs the BIAC counterfeiting task force. “We support the OECD’s conclusion that more work is needed in this area, and we stand ready to help find ways to do this. We hope the upcoming G8 summit will endorse the findings of the OECD report and its recommendations for future government actions.”
USCIB promotes an open system of global commerce in which business can flourish and contribute to economic growth, human welfare and protection of the environment. Its membership includes more than 300 leading U.S. companies, professional services firms and associations whose combined annual revenues exceed $3.5 trillion. As the exclusive American affiliate of three key global business groups – the International Chamber of Commerce, the International Organization of Employers, and the Business and Industry Advisory Committee to the OECD – USCIB provides business views to policy makers and regulatory authorities worldwide, and works to facilitate international trade. More information is available at www.uscib.org.
Jonathan Huneke, VP communications, USCIB
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