OECD Confirms Canada Among Lowest Sources Of Counterfeiting
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Friday November 20, 2009
The OECD has released new data on its global counterfeiting estimates, concluding that the share of counterfeit and pirated goods in world trade is estimated to have increased from 1.85% in 2000 to 1.95% in 2007. That represents an increase to $250 billion worldwide. That is obviously a big number, but notably far lower than the claims from ACTA supporters. Copyright lobby groups have long claimed - without empirical support - that counterfeiting and piracy represents 5 - 7% of global trade. The OECD data indicates those claims are wildly exaggerated.
This is particularly relevant in Canada where counterfeiting claims have been based on the same faulty data (the international story is similar). For example, the Chamber of Commerce's IP Council claimed in its report on IP that "it has been conservatively estimated that counterfeiting and piracy cost the Canadian economy $22 billion annually in lost tax revenue, investment and innovation." The source for this claim is a speech by Chamber President Perrin Beatty. Similarly, the Ontario Chamber of Commerce has argued:
The US Chamber of Commerce estimates that counterfeiting and piracy costs the US economy approximately $250 billion per year. Given that the GDP of the Canadian economy is approximately nine per cent of the US economy, the cost of counterfeiting and piracy in Canada is approximately USD $22.5 billion.
As I reported a couple of years ago, there are two related sources for the claims that puts Canadian counterfeiting over $20 billion. The first was a CTV news report that was based on a completely unsubstantiated claim that claimed 20% of the Canadian market is "pirate product." The second was a 2005 powerpoint presentation from the Canadian Manufacturing and Exporters that featured a single bullet point claiming $20 - 30 billion in losses annually. The source for that claim was simply taking 3 - 4 % of the value of Canadian trade.
The OECD data would suggest that counterfeiting in Canada is far lower than these estimates. Using the basic metric of percentage of trade, Canada represents about 2.8% of world trade or roughly $7 billion of $250 billion (in a $1.4 trillion economy). That number is less than one-third the claims of the Ontario Chamber of Commerce.
In fact, there is reason to believe that the Canadian number is actually even lower. The OECD also ranks all countries through a "General trade-related index of counterfeiting and piracy of economies." Canada fares well - ranking as among the lowest rates of counterfeiting and piracy within the economy among developed countries - with a rate that is lower than Australia, France, Italy, Korea, the Netherlands, Spain, the UK, and the United States (among others). Our low counterfeiting ranking suggests that assuming Canada is equal contributor to counterfeits in line with our trade ranking is likely wrong. Instead, Canada is a low piracy country despite persistent efforts to paint us as a piracy haven.
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Friday November 20, 2009