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?China is estimated to produce 80% of the world’s counterfeits, World Trademark Review, 3 October 2023, and together with Hong Kong, accounted for 75% of the value of counterfeit and pirated goods seized by US Customs and Border Protection in 2021. ?https://www.worldtrademarkreview.com/guide/anti-counterfeiting-and-online-brand-enforcement/2024/article/china-multi-pronged-approach-proves-best-fit-tackle-rise-in-counterfeits
?Counterfeiting has grown from a 30 billion USD trade problem in the 1980s to a market worth $ 600 Billion Dollars in 2021, accounting for 2.1% of all trade worldwide.? 80%?of the world’s counterfeits originate from China.??
?According to the 2020 U.S. Intellectual Property and Counterfeit Goods Landscape Review, worldwide losses suffered due to counterfeiting amounted to at least:
?$ 1.7 trillion Dollars. Counterfeiting is also responsible for 2.5 Million lost jobs globally.
?Total Manufacturer Suggested Retail Price for Product Seizure by Economy in 2020
China????????????????????????????????????? $ 661 Billion
Hon Kong/China?????????????????? $ 429 Billion
Turkey?????????????????????????????????? $ 31 Billion
Vietnam????????????????????????????????? $ 26 Billion
Korea???????????????????????????????????? $ 25 Billion
India?????????????????????????????????????? $ 13 Billion
Thailand???????????????????????????????? $ 13 Billion
Taiwan /China?????????????????????? $ 12 Billion
Netherland???????????????????????????? $ 12 Billion
Other????????????????????????????????????? $ 88 Billion
?Data Source: Intellectual Property Rights Seizure Statistics, designed by Daxue Consulting, U.S. Customs and Border Protection
?Top counterfeit goods from China
?The Economic Costs:
With counterfeits making up 3.3% of total merchandise trade, the U.S. economic impacts are staggering.
?For 2019, counterfeiting would have subtracted nearly $ 131 Billion from the U.S. economy, including direct, indirect and induced economic impacts. That means $ 22.3 Billion of lost labor income, 325,542 fewer jobs, $ 5.6 Billion of lost federal tax revenues and nearly $4 billion less in state and local tax collections
??? Data from NAM Chief Economist Chad Moutray running global counterfeit totals through IMPLAN
??These are simply the costs Companies are incurring by making their products in China, facing the potential issue of their products being?subject to Anti-dumping?and piracy.
China Total Counterfeit in 2020 is $ 1.090 Trillion Dollars (661+429) of Products that were seized by customs besides the ones successfully smuggled.?
?Why Brazil Offers a Safer Environment for IPR Protection
?1. Legal Framework and Enforcement Brazil has developed a robust legal framework for IPR, aligning with international standards set by the World Trade Organization’s Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS). Brazil’s commitment to protecting IPR is reflected in its improved enforcement measures, which include the specialized federal and state IPR courts.
?In contrast to regions like China, Brazil has not gained notoriety as a global hub for counterfeiting. This can be attributed to:
???? Enforcement Mechanisms: Active collaboration between Brazil’s National Institute of Industrial Property (INPI) and customs authorities to intercept counterfeit goods.
???Government Initiatives: Campaigns like “Original é Legal” aim to promote public awareness of the harms of counterfeiting.
Source: Brazil’s National Institute of Industrial Property (INPI)
?2. Economic Incentives for Manufacturers Brazil's economy encourages legitimate manufacturing practices. With an emphasis on innovation, industries such as aerospace, agriculture, and pharmaceuticals thrive in Brazil due to lower rates of piracy. The country’s focus on value-added exports reduces the incentive for manufacturers to engage in counterfeiting.
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Source: Brazil’s National Institute of Industrial Property (INPI)
?3. Brazil’s Clean Record in Global Counterfeit Statistics As your analysis shows, Brazil is absent from global counterfeit hotspots like China, Hong Kong, and others on the U.S. Customs and Border Protection list. This absence suggests:
??? A lesser volume of counterfeit production.
??? Greater adherence to IPR standards by Brazilian manufacturers.
?This cleaner record aligns with Brazil’s focus on developing industries that emphasize quality and branding rather than volume-driven exports that may be more susceptible to counterfeiting.
Source: U.S. Customs and Border Protection, Notorious Markets Report
?4. Stronger Partnerships with Western Markets Brazil has positioned itself as a reliable partner for Western markets, ensuring compliance with IPR laws and reducing the risks associated with counterfeiting. This trust is critical in industries like pharmaceuticals and technology, where IPR protection is paramount.
Source: General knowledge supported by World Trademark Review.
??
The Problem with Manufacturing in China
?The data cited makes it clear that China dominates the counterfeit goods market:
???? High Counterfeit Rates: 80% of the world’s counterfeits originate from China.
??? Economic Impacts: The U.S. lost $131 billion in economic value in 2019 alone due to counterfeiting, affecting labor income, jobs, and tax revenue.
??? Focus on High-Value Counterfeits: Consumer electronics, luxury goods, and athletic wear top the list of counterfeited items.
?The systemic issues in China—ranging from weak enforcement of IP laws to cultural attitudes that tolerate counterfeiting—make it a risky choice for businesses concerned about IPR.
Key Benefits of Sourcing in Brazil
???? Lower Risk of Counterfeiting: With no significant record of counterfeit dominance, Brazilian manufacturers present a safer option for businesses looking to protect their intellectual property.
??? Quality Assurance: Brazilian industries focus on innovation and compliance, offering high-quality production with fewer risks of IPR violations.
??? Proximity to U.S. Markets: Brazil’s geographic and cultural proximity to the U.S. facilitates smoother trade relations, including the enforcement of IPR agreements.
Source: World Trademark Review Report on Counterfeits
Source: U.S. Customs and Border Protection, Notorious Markets Report
?Final Takeaway
?Sourcing products from Brazil not only mitigates the risks associated with counterfeiting but also ensures compliance with international standards. By choosing Brazil over traditional manufacturing hubs like China, companies can safeguard their intellectual property, protect their brand integrity, and contribute to a more secure global trade environment.
?
As you can see, Brazil is not even on the list
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I help businesses manage their mobile devices and reduce wireless spending by an average of 25% or more.
2 个月Great info. You are well positioned to help companies cut cost and drive success.
We help middle market businesses maximize value though M&A and capital raising services as well as fractional CFO consulting.
2 个月With a potential change in direction in Washington, this is a timely article.
Melih Oztalay Improves Digital Marketing Results | $30M+ generated for clients | Helping businesses increase by 200% their website conversions by optimizing their landing pages & CTAs
3 个月George Likourezos what are your thoughts on China and IPR?
Founder, Managing Partner - Master Integrator | Advisory Services | 70+ Trustworthy Providers | Strategic Growth Program | Lean Six Sigma, AI Technology, Strategy, Supply Chain, Risk Management, NPI, Predictive Index
3 个月Nabil Nahra excellent summary of the impact of counterfeiting. Protect your IP .move your manufacturing to Brazil!
Melih Oztalay Improves Digital Marketing Results | $30M+ generated for clients | Helping businesses increase by 200% their website conversions by optimizing their landing pages & CTAs
3 个月This is a fantastic and insightful post, Nabil Nahra. The data highlights the critical need for businesses to reevaluate their sourcing strategies, especially regarding safeguarding intellectual property rights (IPR). Brazil's robust IPR framework and clean counterfeit record make it a compelling choice for companies looking to protect their brand integrity while accessing quality manufacturing. The contrast with China's counterfeit landscape is eye-opening and underscores the importance of strategic partnerships. Thank you for sharing this valuable perspective—it's a timely reminder that sourcing decisions can directly impact a company's global success. #IntellectualProperty #CounterfeitGoods #GlobalTrade #SourcingSolutions #BrandProtection