This report has presented a quantitative analysis of the scale of trade in counterfeit goods infringing Korean IPRs and its negative impacts on the Korean economy, brand owners’ profits, jobs, and Korean government revenues. This analysis relied on both an in-house methodology tailored to gauge the scale and impacts of trade in counterfeits infringing Korean IPRs and a global customs seizures dataset. It also relied on structured interviews with Korean IPR holders’ representatives and IP experts.
The report highlights the vulnerability of the Korean economy to the risk of counterfeiting, due to its high capacity for innovation and production of IP-intensive, high value-added technological goods. Korea is thus among the countries most affected by the infringement of its IPRs.
The results of the report show that global trade in products that infringe Korean IPRs accounted for almost USD 9.7 billion in 2021. This represents almost 1% of total Korean production of that year. As for the direct economic effects, the best available estimates, based on customs data, indicate that trade in counterfeit goods that infringe Korean IPRs resulted in USD 6.1 billion sales losses and over 13 500 jobs losses. In addition, foregone taxes for the Korean government amounted to more than USD 1.5 billion.
The magnitude of the issue, and the scale of its impacts, should be of concern to both policy makers and the private sector. It has significant implications for the future, including on Korea’s highest value-added activities and innovation potential, both of which are sources of long-term economic growth.