Illicit Trade and the Korean Economy: An Analysis of Counterfeit and Pirated Goods
Executive Summary
Counterfeit and pirated goods represent a significant threat to the global economy, particularly in innovation-driven sectors like Korea's, where intellectual property (IP) rights are heavily relied upon. This report, conducted by the OECD under the Working Party on Countering Illicit Trade, offers a comprehensive look at the scale and impact of counterfeit trade on Korean IP rights holders and the Korean government.
Key Findings:
- Innovation and IP Infringement: The Korean economy is highly innovative, with IP-intensive industries deeply integrated into global value chains. However, this openness exposes the country to risks of counterfeiting and piracy.
- Quantitative Assessment: The report uses a rigorous methodology, including unique customs seizure data and interviews with experts, to quantify the economic impact of counterfeiting on Korean businesses and the economy.
- Main Characteristics of Trade in Counterfeit Goods:
- Sources: Counterfeit products infringing on Korean IP come predominantly from China, Hong Kong, and Taiwan.
- Products Affected: Korean products most commonly targeted include pharmaceuticals, automotive parts, electronics, and cosmetics.
- Distribution Channels: Counterfeit products often find their way into both primary and secondary markets, reaching consumers worldwide.
- Magnitude: The volume of counterfeit goods infringing on Korean IP rights is substantial, impacting various sectors.
- Economic Impacts:
- Consumer Awareness: Counterfeit goods are frequently bought unknowingly by consumers.
- Sales and Jobs: Counterfeiting negatively affects sales and job creation in the manufacturing sector.
- Government Revenue: It leads to lost tax revenues for the Korean government.
- Strategies to Limit Impacts: Addressing the issue requires a multi-faceted approach, including enhanced enforcement, consumer education, and cooperation between governments and industries.
Recommendations:
- Strengthening IP protection mechanisms
- Enhancing customs controls and intelligence gathering
- Promoting consumer awareness and education
- Encouraging international cooperation against counterfeiting
Conclusion:
The report underscores the critical role of addressing counterfeit trade in supporting sustainable economic growth and innovation. Policymakers, industries, and consumers must work together to mitigate the impacts of counterfeiting and protect the integrity of global markets.
