Ladies and Gentleman,
I would like to thank the OECD for the opportunity to take part in the launch of this valuable new study.
I would also like to acknowledge the work of the Task Force on Countering Illicit Trade and its Chair – David Luna.
The United States was pleased to offer data from Customs and Border Protection to support this project and we welcome this report. The report contains compelling new data that will help arm all of us with better information to tackle the enormous challenge of combatting international trade in counterfeit and pirated goods. It is clear that the scope of this problem has only increased in the last decade. And the report is a call to action for all of us.
The numbers are shocking. The report’s new figure, $461 billion in stolen goods in 2013, accounted for up to 2.5% of world trade. But, even more troubling, is the impact of illicit trade on our societies and our economies.
Intellectual property is an essential driver of today’s global economy. In the United States, creative and innovative industries generate about $5 trillion in revenue and support 40 million jobs. These industries also create so many of the products we all use and enjoy – from films and music to technology and machine parts to medicines. These industries depend on the protection of their intellectual property and copyrights to do business.
These counterfeit products have a devastating impact on jobs, growth, and innovation. As the report shows, almost no sector or product is immune. Thousands of legitimate businesses and artists are targeted. This includes many small and medium sized businesses that may not have the resources to combat these issues. Companies in OECD countries including the U.S. and the EU suffer the most.
But, it does not stop there.
Counterfeit and pirated goods also present health and safety concerns to our citizens, due to the low quality of these goods. We’ve all seen examples in the media of fake medicine, tainted food products, and defective safety devices.
Trade in counterfeit and pirated goods also has security implications. While these products originate from virtually all economies, they often pass through countries with weak governance and high corruption. It is particularly worrying to see regions in conflict – Afghanistan or Syria – become transit points for traffickers. As we kick off Integrity Week here at the OECD, it is important to note these links between illicit trade and corruption.
So, what can we do?
First, we must enforce our laws. We must enforce them not just in the countries that are destinations for these products, but in the countries of production and transit. This means, in part, sustained and rigorous export controls in the countries of origin, to stop these products at their source.
Second, we must all work together to address this problem. We must have cooperation with the public sector, the private sector, and consumer organizations. A coordinated effort is needed to mount an effective response to an issue of this magnitude.
Recent enforcements actions targeting counterfeits such as Operation Pangea and Operation Opson 5 demonstrate the power of a coordinated response. Opson 5, for example, seized a historic amount of fake, contaminated, and mis-labelled food and drinks across 57 countries. The United States applauds these operations.
Third, we must educate our consumers to be aware and to buy responsibly. In many cases, consumers do not know they are purchasing counterfeit goods. In others, they are aware. We know the purchase of these goods have detrimental effects on the economy and the public. We now understand more clearly how it often helps in financing organized crime or even support terrorist networks.
And finally, we need more research and data to help ensure our efforts are focused, which is why we find this report so valuable.
In conclusion, I would like to reiterate our thanks to the OECD and our colleagues in the EU – including my friend the Ambassador – for their leadership in producing such an important study.
Let’s use this report to broaden our understanding of the effects of counterfeit goods on innovation, and renew our efforts to tackle this global problem.