Anti-Counterfeit Efforts Finally Go Global

seizure-of-counterfeit-goods-594x396Washington, DC – It is no longer just the US that’s concerned with the growing issue of counterfeit products, say Michael Czinkota and Ilkka Ronkainen of Georgetown University.

“Globally, companies reportedly lose a total of $657 billion every year because of product counterfeiting and other infringement on intellectual property,” they say. “Today’s key problems are with high-visibility and strong brand name consumer goods.”

Intellectual property enforcement “ensures that new ideas can blossom into economic opportunity,” they said in a recently published paper addressing the topic of counterfeit goods.

“Intellectual Property Rights (IPRs) have become a core issue in the global economic debate. No longer confined to cheap knockoffs of luxury goods, IP theft is placing industry and the public at risk of highly adverse economic, safety, and health consequences,” they added.

Earlier, the only concern was whether a company’s product was being counterfeited; now, the raw materials and components purchased for production may be counterfeited.  In general, countries with lower per capita incomes, higher levels of corruption in government, and lower levels of involvement in international trade tend to have more intellectual property violations.

According to the writers, China, long seen as the focal production point of global counterfeiting operations, has taken significant steps to counter what has plagued the country’s e-commerce market particularly hard.

Alibaba “spends more than $16 million yearly fighting counterfeit goods,” they say. Another example is “Hong Kong’s commitment to the protection” of intellectual property.

“With the goal of enhancing consumer confidence in Hong Kong, and to strengthen the city’s reputation as a ‘Shopping Paradise’ for genuine products, the Intellectual Property Department has launched the ‘No Fakes Pledge’ scheme,” Czinkota and Ronkainen said.

The issuing bodies of the scheme are the Hong Kong & Kowloon Electrical Appliances Merchants’ Association Limited and the Hong Kong Coalition for Intellectual Property Rights of the Federation of Hong Kong Industries.

“The international marketer must act to enforce intellectual property rights.  No industry or country is immune from infringement, nor can they address the threat alone. There is also need for better education regarding the risks IPR violations pose and how to defend against them,” they said.

For example, the pharmaceutical industry lobbied to make sure that provisions for patent protection in the NAFTA agreement were meticulously spelled out.

Pharmaceutical Research and Manufacturers (PhRMA) addressed the issue of international IP protection by responding to the Special 301 Report issued by the US Trade Representative in May 2012.

The PhRMA statement cited the need for IP protections in spurring innovation, research and development, as well as the need for fair international market conditions to ensure that patients have access to medications.

One research firm estimated the global market for counterfeit pharmaceuticals to generate revenues between $75 billion and $200 billion a year.

The Pharmaceutical Security Institute (PSI), a trade association created to address illegal pharmaceutical incidents, collects data on the number of counterfeiting, illegal diversion, and theft incidents. These incidents increased seventy-eight percent from 2005 to 2009.

Pfizer reports that between 2004 and 2010 it seized more than 62 million doses of counterfeit medicines worldwide.  More than 200 million counterfeit Eli Lilly medicines have been seized in 800 raids around the world.

“A number of other governments are drafting similar policies, which have served as a catalyst for enhancing protection in both the public and private sectors in those nations,” said Czinkota and Ronkainen.

Efforts to protect intellectual property, and modernize the patent and trademark system are crucial, they added.

“The power of creativity and innovation applied to the solving of practical problems is not the exclusive province of any country or people. A victory over fakes and counterfeits will protect the quality and reliability of products and services, and lets customers be more informed and secure in their usage decisions.”

Illkka Ronkainen is a member of the faculty of marketing and international business at Georgetown University, while Michael Czinkota researches international business and policy issues at the school.

10/21/2014

Moscow Targets McDonald’s Charity Operation

mcdonaldsrussiaLos Angeles, CA – Ronald McDonald House Charities is the latest target of Moscow’s campaign of investigations into the Russian operations of global fast food giant McDonald’s.

Russian authorities are reportedly preparing to level tax evasion and money laundering charges against the charity, which operates a sports facility for physically and mentally disabled children in Moscow, and a residential facility near a children’s hospital in Kazan, 450 miles east of Moscow.

In an interview with the Washington Post, Russian Duma legislator Andrei Krutov said, “They use donations from ordinary Russians, so that is why we want to know how this money is spent. I am talking only about financial aspects of their activities, and technical questions about their work. We do not want you to think that we have political reasons for doing this.”

In August, Russia’s consumer protection agency ordered four of the company’s largest restaurants to suspend operations over a host of alleged hygiene violations and shortly afterwards added another five to the list.

Since then, 12 restaurant in Russia have been closed for alleged “sanitary reasons” while more than 200 unscheduled hygiene and safety “inspections” have been carried out.

Last week, nine more McDonald’s outlets – four in Moscow, two in Yekaterinburg, two in Volgograd and one in Sochi – were “temporarily” shut-down.

The latest move subjects more than half the McDonald’s franchises in Russia to government scrutiny.

McDonald’s Russia issued a statement on its website over the weekend saying that, “Right now, more than 200 probes have been initiated,” adding that a Russian court had extended the government’s temporary closure of the initial nine restaurants and added that it would appeal against the decision.

The company, which opened its first restaurant in Russia in 1990, has 450 restaurants across the country, more than 100 of which are in Moscow and the surrounding region. More than 60 are in St Petersburg and the surrounding region, the country’s second big metropolitan area.

Moscow’s investigation campaign is seen in the West as a slap-back at the economic and financial sanctions and executive orders put in place earlier this year by the US in response to Russia’s seizure of the Crimea and continued incursions into neighboring Ukraine.

10/20/2014

Global Air Cargo Volume to Double by 2033

aircargo1Chicago, IL – Boeing has released a report projecting air cargo traffic to grow at an annual rate of 4.7 percent over the next 20 years, with global air freight traffic expected to more than double by 2033.

Major air cargo carriers were severely hit by the global financial crisis in 2008 and, despite a rebound in 2010, worldwide air cargo traffic has remained flat in recent years, the World Air Cargo Forecast said.

The market began to see growth again in second quarter of 2013 reaching 4.4 percent for the first seven months of 2014 compared to the same period a year earlier.

If this trend continues, 2014 will be the highest growth year for the air freight industry since 2010, according to the Boeing report.

“We see strong signs of a recovery as air freight traffic levels continue to strengthen after several years of stagnation,” said Randy Tinseth, Boeing’s Commercial Airplanes’ vice president of marketing.

The global air cargo market “is now growing at nearly the long-term rates,” he said in a statement.

The new forecast shows Asia-North America and Europe-Asia will continue to be the dominant world air cargo markets with the most traffic volume. Intra-Asia, domestic China and Asia-North America markets are expected to have the fastest growth rates over the next 20 years.

With increased air cargo traffic, the world freighter fleet is also expected to grow with deliveries of 840 new factory-built airplanes and 1,330 passenger-to-freighter conversion airplanes.

More than 52 percent of those deliveries are expected to replace retiring airplanes and the remainder used for fleet expansion.

10/17/2014

Universal Plans New 1,000 Acre Theme Park in China

???????????????

Universal City, CA – China has approved the development of a $3.3 billion Universal theme park in Beijing that would be the first major foreign-owned theme park in the Chinese capital.

The planned theme park will be the third Universal park in Asia after Singapore and Osaka.

California-based Comcast NBCUniversal and a consortium of four Chinese state-owned companies issued a joint statement saying the park will be developed on about 300 acres in eastern Beijing.

They said the Beijing park will include attractions from other Universal parks as well as new ones reflecting China’s cultural heritage.

The complex will eventually cover about 1,000 acres and will feature a Universal CityWalk entertainment zone and a Universal-themed resort hotel. The developers said they were not ready to announce a timeframe for completing the park.

China’s growing consumer market has proved fertile ground for US companies looking to expand theme park franchises. Disney has opened one park in Hong Kong and is building another one in Shanghai.

In June, Six Flags announced plans to build six parks in China over the next decade. Dreamworks Animation SKG Inc. is building a $2.4 billion complex with Chinese partners in Shanghai, scheduled to open in 2017.

China is home to 11 of the top 20 amusement parks in Asia with about 166 million visits in 2013.

According to industry analysts, amusement parks in China are expected to total nearly $3 billion this year alone. There are 59 more parks in the pipeline, and by 2020, theme park attendance in China could overtake the US market’s 220 million visits last year.

The opening date and specific development plans for the new Universal park were not announced.

10/16/2014

 

US, Mexico Border Truck Program Expires

Mexican-border-odWashington, DC – The three-year program giving Mexican long-haul truckers access inside the US beyond the designated commercial border zone has officially expired, but the border will remain open to the 13 Mexico-domiciled carriers that were granted authority to participate in the project.

As required by statute, the Department of Transportation has completed a three-year trucking pilot program with Mexico,” the Federal Motor Carrier Safety Administration, the US Department of Transportation (DOT) agency responsible for conducting the pilot project, said Tuesday in a prepared statement.

The controversial cross-border program, strongly opposed by the US trucking industry, was created in 2011 to evaluate the safety of cross-border long-haul operations, with 13 carriers participating in the program.

“Prior to making any additional determinations regarding cross-border trucking issues or specific carriers, the department will await expected reports on the pilot program from the Motor Carrier Safety Advisory Committee and the DOT Inspector General,” the agency said.

“In the interim, based upon successful completion of the program, as well as a review of safety and inspection data collected during the program, the department has converted the 13 participants to provisional or standard operating authority, allowing those carriers to continue to operate in the United States.”

The 13 carriers will reportedly continue to undergo regular border inspections and be subject to all US motor carrier laws and regulations, the DOT said.

In addition, it said that there were no fatalities or major accidents involving Mexico-domiciled trucks during the current pilot or the previous pilot program that ended in 2009 when it was scrapped by Congress.

10/15/2014

Apple Plans Broad Global iPhone 6 Distribution

iphonesCupertino, CA – By the end of this month, technology giant Apple Inc. will make its highly popular iPhone 6 and iPhone 6 Plus available in 36 additional countries and territories across Europe, Asia, the Middle East, Latin America and Africa.

Starting with China, India and Monaco this week, the new iPhones will be available in China and 68 other countries and territories by the end of the month, including the initial launch countries.

The distribution campaign is reportedly also on track to make the devices available in more than 115 countries by the end of the year, making this the company’s fastest iPhone rollout ever.

Apple set a new record for first weekend sales of iPhone 6 and 6 Plus, having breached the 10 million mark within just three days of its initial September 9 sales launch in Australia, Canada, France, Germany, Hong Kong, Japan, Puerto Rico, Singapore, the UK, and the US.

The new iPhones will be available in Israel from Thursday, October 23 and in Czech Republic, French West Indies, Greenland, Malta, Poland, Reunion Island and South Africa the following day. They will be available in Bahrain and Kuwait from Thursday, October 30.

It will be available in further 23 countries – Albania, Bosnia, Croatia, Estonia, Greece, Guam, Hungary, Iceland, Kosovo, Latvia, Lithuania, Macau, Macedonia, Mexico, Moldova, Montenegro, Serbia, South Korea, Romania, Slovakia, Slovenia, Ukraine and Thailand – on October 31.

Cupertino, California-based Apple unveiled the two new larger screen smartphones, iPhone 6 and iPhone 6 Plus, last month in San Francisco.

The iPhone 6 and iPhone 6 Plus are both available in 16GB, 64GB, and 128GB versions and feature larger HD (high definition) screens than their predecessors, as well as markedly enhanced performance and power efficiency.

10/14/2014

Seattle, Tacoma to Combine Ocean Cargo Operations

seatacSeattle, WA – ​ The Seattle and Tacoma port commissions will unify the management of the two ports’ marine cargo terminals and related functions under a single Seaport Alliance “to strengthen the Puget Sound gateway and attract more marine cargo for the region.”

The new Seaport Alliance will manage marine cargo terminal investments and operations, planning and marketing, while the individual port commissions will retain their existing governance structures and ownership of assets, said a spokesman for the Port of Seattle.

This unprecedented level of cooperation between the state’s two largest container ports “is a strategic response to the competitive pressures that are reshaping the global shipping industry.”

The ports of Seattle and Tacoma, which, when combined, form the third-largest container gateway in North America, “face fierce competition from ports throughout North America, as shipping lines form alliances, share space on ever-larger vessels and call at consolidated terminals at fewer ports,” said Port of Tacoma Commission president Clare Petrich.

“Working together, we can better focus on financially sustainable business models that support customer success and ensure our ability to reinvest in terminal assets and infrastructure,” she said.

“Where we were once rivals, we now intend to be partners,” said Stephanie Bowman, co-president of the Port of Seattle Commission.

Instead of competing, “we are combining our strengths to create the strongest maritime gateway in North America. The Seaport Alliance is the result of our shared commitment to maintaining the economic health of our region through a thriving maritime industry.”

The Seaport Alliance is the outgrowth of talks held under the sanction and guidance of the Federal Maritime Commission (FMC).

Subject to further FMC review and approval, the two port commissions will enter into an ‘Interlocal Agreement’ (ILA), which is intended “to provide the ports with a framework for a period of due diligence to examine business objectives, strategic marine terminal investments, financial returns, performance metrics, organizational structure, communications and public engagement.”

Following the due diligence period, the two port commissions intend to submit a more detailed agreement for the Seaport Alliance to the FMC by the end of March 2015.

During the due diligence period, John Wolfe, Port of Tacoma CEO, and Kurt Beckett, Port of Seattle deputy CEO, will co-lead the planning work and coordinate with both port commissions, according to a joint statement released by both ports.

Commissioners from both ports expect to hold a public meeting next spring to hire Wolfe as the CEO of the Seaport Alliance following the FMC’s approval of the agreement.

10/13/2014

 

No USWC Port Labor Contract Worries Retailers

shipping_containersWashington, DC – Import cargo volume at the nation’s major retail container ports is expected to see a final surge and set a new monthly record in October as the holiday season approaches, according to the National Retail Foundation’s monthly Global Port Tracker report.

“Increasing congestion at the nation’s ports, as well as the ongoing West Coast labor negotiations, are ongoing concerns and retailers are making one last push to make sure they’re stocked up for the holidays,” said Jonathan Gold, the NRF’s vice president for Supply Chain and Customs Policy.

“Retailers are working hard to make sure customers can find what they’re looking for regardless of what happens at the ports.”

The contract between the Pacific Maritime Association (PMA) and the International Longshore and Warehouse Union (ILWU) affecting cargo movement at US West Coast (USWC) ports expired on July 1, prompting concerns among the nations’s retailers and others about potential disruptions that could affect back-to-school or holiday merchandise.

The Washington, DC-based NRF recently sent a letter to the heads of the PMA and the ILWU urging a speedy, successful conclusion to their on-going negotiations.

Dockworkers remain on the job as negotiations continue but the lack of a contract and operational issues “have led to record congestion” at ports from Seattle to San Diego, the industry group said.

“Finalizing a new labor contract is an absolutely critical component to working through the backlog of shipping containers now piling up at West Coast ports,” the letter read. “We are deeply troubled by the fact that no apparent progress has been made in the negotiations since August, when the PMA and ILWU announced a ‘tentative deal’ on health benefits.”

The NRF, the largest retail industry group in the world, chided both groups for their lack of transparency, saying that, “Whether intentional or not, the fact that neither the PMA nor ILWU has made any public progress report in more than a month is sending a very troublesome and disconcerting signal.”

Shippers, the NRF said, “look for certainty when making strategic long-term supply chain investments, or for placing transportation orders for discretionary cargo.”

The ongoing negotiations “and the degradation of operating efficiency, specifically at the ports of Los Angeles and Long Beach, is making the region unattractive for future investment and will lead to a permanent shift of cargo,” the letter concluded.

Import volume at US ports covered by the Global Port Tracker report is expected to total 1.53 million containers this month, topping the 1.52 million monthly record set in August. Cargo volume has been well above average each month since spring as retailers have imported merchandise early in case of any disruption on the docks.

The 1.52 million TEUs (Twenty-Foot Equivalent Unit cargo containers) handled in August, the latest month for which after-the-fact numbers are available, was up 1.5 percent from July and 2.1 percent from August 2013.

The import numbers come as NRF is forecasting 4.1 percent holiday season sales growth and 3.6 percent growth for all of 2014.

Global Port Tracker, which is produced for NRF by the consulting firm Hackett Associates, covers the ports of Los Angeles/Long Beach, Oakland, Seattle and Tacoma on the US West Coast; New York/New Jersey, Hampton Roads, Charleston, Savannah, Port Everglades and Miami on the US East Coast, and Houston on the US Gulf Coast.

10/10/2014

HSBC Boosts International Loan Program to $5B

smallbusinessNew York, NYHSBC Bank USA is adding $3 billion more to its international loan program, raising the program’s total funding to $5 billion, as “the demand by US small and medium size businesses looking to export or expand internationally continues to rise.”

The funding increase is the third in 15 months and will “satisfy the demand by companies who want financing to grow and compete,” said Steve Bottomley, group general manager, senior executive vice president and head of Commercial Banking for HSBC in North America.

In 2013, US exports hit an all-time record of $2.3 trillion and supported 11.3 million US jobs, directly and indirectly, according to data supplied by the US International Trade Administration.

The latest HSBC Global Connections Trade report shows that developing economies, such as China and India, present the best US trade prospects, with US export growth to average nine percent a year to each country through 2030.

Additionally, global trade is expected to grow annually by eight percent beginning in 2016 from 2.5 percent in 2013, as businesses capitalize on the rise of the emerging market consumer and developing markets stabilize their productivity levels for the future.

“US small- and medium-size businesses are key contributors to US exports and domestic job growth,” said Derrick Ragland, HSBC executive vice president and head of US Middle Market Corporate Banking.

HSBC launched its international loan program for US small and medium size businesses seeking to export or expand internationally in July 2013with $1 billion in funding.

It doubled the program to $2 billion at the start of 2014, and today’s addition of $3 billion more raises the program’s total funding to $5 billion.

The international loan program is available to businesses with at least $3 million to $500 million in annual revenue, and who are focused on cross border trading or global expansion.

Only applications for new business loans will be accepted and all of HSBC’s usual credit and lending criteria apply. The program runs through December 2015.

International trade and financing, said Bottomley, “is critical not only for U.S. companies who want to excel, but also for the wider US economy.”

Since launching the program last year, “We’ve been impressed by the pace with which businesses around the country and across industries have taken advantage of the program to capture international growth market opportunities.”

10/09/2014

New York to Form State Trade Promotion Bank

made_in_nyAlbany, NY – The State of New York is taking a major step to provide financing for global trade-minded companies throughout the state with the announcement that it will propose the creation of a new import-export bank.

Based on the federal model, the bank, the first of its kind in the country, would initially be vested at $35 million with funds loaned to qualified companies looking to expand their overseas exports.

The bank will have to be approved by lawmakers and would include a $25 million lending program targeted toward small businesses that have difficulty accessing credit, and $10 million for grants of as much as $25,000 to help with export capacity and translation.

Governor Mario Cuomo announced the formation of the bank at the recent Global New York Summit in New York City.

The new bank, the governor said, “is part of a larger push to help companies take advantage of growing international markets. This is about job development and these companies are being sought after by every state. If we don’t give them an incentive, another state will.”

Cuomo also said he will travel on trade missions to Canada, Mexico, Israel, China and Italy over the next year as part of his recently unveiled Global NY Initiative.

Up for reelection next month, the governor Cuomo added that the initiative is meant to help change New York’s image as a high-tax state unfriendly to business and investment and draw more foreign companies to the country’s third-most-populous state.

10/08/2014