Piracy and counterfeiting will persist till the end of time, it seems. That was my conclusion after reading the latest annual Review of Notorious Markets from the Office of the United States Trade Representative (USTR), which identified numerous regions, countries, cities, and online sites that remain centers of commercial goods piracy and counterfeiting, despite persistent enforcement actions.
The report had previously been included in the USTR's Annual Special 301 Report, but the US government has opted to publish it separately to focus attention on the issue and give it greater prominence, in a bid to reduce the incidence of counterfeiting. Most of the online sites, towns, and regions described as "notorious markets" by the USTR are either physically in or operated from Asia, Russia, or South America. China features numerous such locations.
The USTR's list includes major online sites such as Baidu Inc. (Nasdaq: BIDU), "recently ranked as the number one most visited site in China and among the top ten in the world." Physical sites named include Bahia Market in Guayaquil, Ecuador; China Small Commodities Market in Yiwu, China; and other locations in Argentina, China, Colombia, India, Indonesia, Mexico, Paraguay, Pakistan, Philippines, and Thailand.
The list recognizes markets in which pirated or counterfeit goods are reportedly available, but is by no means an exhaustive record of all notorious markets around the world. "Rather, the list highlights with concern some of the most prominent examples of notorious markets in each of the categories referenced below," says the USTR. "The United States urges the responsible authorities to intensify efforts to combat piracy and counterfeiting in these and similar markets, and to use the information contained in the Notorious Markets List to pursue legal action where appropriate."
The activities carried out at the locations or online sites identified by the US government offer a range of products and services, including pirated music and counterfeit materials such as cigarettes, clothing, manufactured goods, pharmaceutical products, and sporting goods. China's Taobao is one such site. The USTR report concedes that Taobao is "making significant efforts to address the availability of infringing goods through its website." But, "it still has a long way to go in order to resolve those problems."
Some physical counterfeiting markets in Asia and South America have a particular emphasis on electronics goods: Ciudad del Este in Paraguay is one of those locations. According to the report, "this activity spills over into the entire Tri-Border Region of Paraguay, Argentina and Brazil, creating a hotbed of piracy and counterfeiting."
Of course, many locations listed in the USTR's report have been previously identified by local and international authorities, including the Chinese government, which has stepped up enforcement actions in recent years. Yet counterfeiting continues to flourish for the simple reason that it can be profitable. With any luck, next year, the list will be shorter -- the infringers highlighted in 2011 won't all want a permanent black mark against their names.