EUIPO-OECD Joint Study Details Close Link Between Global Counterfeit Trade and Abusive Labor Practices

"Yesterday, the European Union Intellectual Property Office (EUIPO) and the Organisation for Economic Co-operation and Development (OECD) published the results of a joint study detailing the close connection between illicit trade in counterfeits and labor exploitation. The joint study shows clear, repeated associations between the intensity of counterfeit trade and abusive labor conditions, strongly suggesting that such conditions structurally enable the production and distribution of counterfeits."

"The EUIPO-OECD joint report on fakes and forced labor derives findings from global customs data and available labor statistics. Using econometric modeling that controls for income levels, trade openness and institutional quality, the study finds that a one-percentage-point increase in the prevalence of forced labor correlates with a 0.0076% increase in the value of counterfeit trade, which globally reaches an average value of $467 billion USD each year."

"There are several forms of labor exploitation that enable the production and distribution of counterfeit goods chronicled by the EUIPO-OECD joint report. Surveying several studies on illicit trade impacting intellectual property rights, the report details factories making fake branded clothing, cigarettes and footwear that heavily leveraged children and undocumented migrants to provide labor. In many cases, these individuals worked in unsafe conditions under constant surveillance preventing them from leaving the factory."

Global customs data and labor statistics reveal repeated associations between counterfeit trade intensity and abusive labor conditions, indicating exploitative labor structurally enables counterfeit production and distribution. Econometric models that control for income levels, trade openness and institutional quality show a one-percentage-point increase in forced labor prevalence correlates with a 0.0076% rise in counterfeit trade value; global counterfeit trade averages about $467 billion per year. Multiple forms of labor exploitation facilitate counterfeit supply chains, including the use of children and undocumented migrants, unsafe working conditions, and constant surveillance that prevents workers from leaving factories.

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