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Guest Editorial

Counterfeiting is costing Americans jobs

DON C. BRUNELL

Most of us think of counterfeiters as enterprising crooks who print phony $100 bills and pass them at the local grocery store or gas station. But those traditional thieves are just the tip of the iceberg compared to the pirates who "knock off" products and sell them.

Today, according to the U.S. Bureau of Customs and Border Protection, 750,000 American jobs are lost because many of our leading trade partners, including Argentina, China and India, fail to adequately protect copyrights, patents and trademarks.

The upshot is that a wide range of U.S. creators of intellectual property - from software firms and pharmaceutical companies to movie studios and the music industry - lose billions of dollars a year to piracy. The FBI estimates that counterfeiting costs us $200 billion to $250 billion each year; it is exploding in today's Internet connected world. The World Customs Organization estimates that global trade in illegal goods has increased 100-fold since 1982 to more than $600 billion a year - equal to 5-8% of all goods sold around the world.

Microsoft spends millions protecting its copyrighted software around the world. Still, the International Intellectual Property Alliance estimates that companies like Microsoft have lost more than $9 billion to counterfeiters.

Pharmaceutical companies are prime targets as well. The World Health Organization estimates 10 percent of all pharmaceuticals are counterfeited and 14 percent of drugs sold through the mail are "knock offs."

The impact of counterfeited products is deadly. In fact, the British Broadcasting Company estimates that 200 babies in China alone died last year because of fake formula.

While the political rhetoric in this year's Presidential election is focused on "outsourcing" jobs overseas, little is said about the hundreds of thousands of American jobs lost because countries like China, India, Korea and others don't enforce international copyrights, patents and trademarks. And while labor unions worry about jobs and factories moving offshore, they ought to focus on counterfeiting. The auto industry, which is heavily unionized, could hire 200,000 additional workers if the sale of counterfeited parts like brake linings were eliminated, according to the Dept. of Commerce.

A recent Business Software Alliance study indicated that a 10-point reduction in world-wide piracy could add $400 billion to the global economy, generating 1.5 million jobs and $64 billion in tax dollars.

That's pretty telling since financially strapped states like California could receive $7.5 billion a year in taxes if counterfeiting were stopped. New York City alone could collect an additional $350 million, according to the International Anti-Counterfeiting Coalition. The coalition identified 27 countries that are not protecting intellectual property and have 30 others under the microscope.

This explosive problem threatens the creativity and innovations that have built America. It should be part of the debate in this year's elections, and consumers, manufacturers, businesses and government buyers need to verify that they're purchasing authentic goods, not fakes.

Buying the real thing may cost a little more, but it could save your neighbor's job - it could even save your life.

Don C. Brunell is President of the Association of Washington Business.

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