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Vietnam Set to Overtake China as World’s Counterfeit Goods Capital

Due to rising labor costs in China, many counterfeit goods manufacturers are moving their operations to Vietnam. As the country becomes increasingly intertwined with the global economy via free trade agreements, authorities are hoping to stave off the trend, but so far have had little success.

VietNamNet, citing a report from the Market Management Agency, an arm of the Ministry of Industry and Trade, found that there were 10,500 cases of counterfeit goods production and distribution in 2010, figures that rose to 14,000 cases and fines of VND62.01 billion in 2013.

“We have found companies which provide counterfeit goods so similar to the authentic goods that only the real manufacturers can discover the frauds after applying specific professional measures,” said Do Thanh Lam, Deputy Head of the agency.

Nguyen Thanh Hong, a senior official of the National Office of Intellectual Property (NOIP) said that since Vietnam sits next to China, it’s a natural place for counterfeit goods to be produced.

But the largest driver of change has are Vietnam’s lower labor costs:

“Phan Minh Nhut, a high ranking executive of Nike, noted that counterfeit goods manufacturers tend to relocate their production bases to Vietnam because of the increasingly high labor cost in China.”

Vietnamese officials are scrambling to buck the trend, especially as the country is a member of the WTO and hopes to be part of the Trans Pacific Partnership, both of which call for strict enforcement of international intellectual property laws. But so far this hasn’t been an easy task:

“Lam noted that the majority of Vietnamese businesses have been uncooperative with state agencies in combating counterfeit goods. Only big enterprises or multi-national groups have signed agreements with the agencies on the joint forces to prevent counterfeit goods.”

But it is obvious that intellectual property rights are low on the list of priorities for Vietnamese businesses. According to Hong, only 490 have registered to join the Madrid System, the international system allowing businesses to search and register trademarks in up to 92 countries. 

While many counterfeit products have serious shortcomings when it comes to quality, I have nothing but good things to say about my $12 'North Face' backpack.

[VietNamNet // Photo via Judgementalist]

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