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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.
Comments (13)add comment

crade said:

It has been conservatively estimated that the copyright lobby groups are dishonest.
November 20, 2009

jv said:

Response #1:

The data is flawed

Response #2:

If Canadians aren't the lieing, cheating, theaving, stealing, terrorist, pirate scum bags we said they were, then they won't have any objections to ACTA.
November 20, 2009

crade said:

#1 Of course it's flawed, it wasn't paid for by the copyright lobbyists.
#2 Right, you are so morally superior to us Canadians because we don't want your fascist laws.
November 20, 2009

Dennis said:

@jv ________
|/ __ __|
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im not sure if your trying to play devils advocate or your serious? "/s" usually implies sarcasm.

response #1 How exactly would you consider the data flawed? please cite specific examples.

response #2 Contrary to popular belief, the United States is in fact a separate country from the rest of the world. Canadians democratically decide their own laws.

Excellent article Michael.
November 22, 2009

joel said:

Nah, i'm sure it was a joke

I think jv was trying to point out the fact that most lobby groups have tunnel vision and will simply try to either disrepute this information or, twist it to their advantage.

You know, Mussolini said Fascism should more properly be called corporatism because it is the merger of state and corporate power.

Rememer folks, an elected official is alwasy temporary, a lobby group can be permanant.
November 23, 2009

Namee said:

Was the Digital Economy Bill Consultation a Whitewash?
If you look at this, the infamous Toronto Music Industry Town Hall held on August 27th is the right piece in a chain of events and the Government of Canada will whitewash this copyright consultation too.

November 23, 2009

Anon-K said:

Assuming JV is trying to say what the lobby's response will be, I'd have to say he is right. The data will be described as flawed. Mostly because the numbers weren't generated in the same way that the lobby gets its numbers (much of the "statistics" I've seen are reasonable, given the assumptions. The problem is that the assumptions appear to have been withdrawn from a bodily orifice :-)
November 23, 2009

Truth Monger said:

Obama's new anti-piracy law
America already started their equivalent fascist law earlier this year...
November 24, 2009

Andrae Muys said:

I agree with your conclusions...
...but you have misinterpreted the report.

The report is 1.95% of Tangible Products - "these figures do not include domestically produced and consumed products, or non-tangible pirated digital products".

The digital publishing industries figures are indeed a joke, but unfortunately this isn't the report to debunk them.
November 24, 2009

KM said:


This seems damning... I would appreciate hearing Michael Geist's response.
November 27, 2009

JC said:

Value entertainment
The assumption always is there is lost revenue involved with file sharing. In reality people who do file sharing are looking for value entertainment. Usually people with fixed budgets regarding how much to spend. So it is highly likely if it is made illegal you just put poor people in jail and you will not increase revenue one dollar. People who stop will just go to other forms of entertainment where they get more value for their dollar. In fact this will likely just spur more desire for internet based free entertainment in other forms and help hasten the end of current paradigm in essence these companies will just hasten their own extinction. Currently as it is the internet acts as an advertising campaign for them. The more i see a movie in the theatre being downloaded the more i want to go see it. Right now i spend more on movies in the theatre in the last 10 years of downloading then i have in my entire life. I enjoy the quality of the movie expertness over downloading. I have stopped saying i will wait for it to come out on video altogether.
November 29, 2009

North of 49 said:

Regarding that Barry Sookman post KM mentioned
Here's part of the comment I left there:

As for [Sookman's] original post, it's a slick piece of propaganda but it's not convincing. Its arguments are based on buttressing a pre-determined conclusion, not on an examination of evidence. The cherry-picking of convenient factoids and sources is so obvious it's painful.

Worse, nowhere does it acknowledge any opposing points of view, though it's obvious from the topics you address that you're fully aware of them. Finally, it fails completely to provide any substantial justification for its assertions.

Reminds me of a Fraser Institute op-ed piece, actually.
December 05, 2009

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