Oliver Griffiths

Deglobalisation

Gordon Brown's speech on the global economy yesterday contained a very interesting section on the dangers of deglobilisation (it starts at 11.30 on the video clip, if you don't want to watch the whole thing).

The traditional worry is that during tough economic times trade and investment barriers are put up - this was what the G20 leaders sought to address through a standstill clause in the G20 Washington Summit communiqué in November. The WTO has been collecting data in the interim looking at recent instances of countries raising barriers: the 'periodic reports on global trade trends' referred to by Pascal Lamy during a speech at the Department of International Development last week. The hope is that scrutiny and some powerful arguments about the negative economic and public policy impacts of traditional protectionist measures will stop them in their tracks.

A different, and more subtle, threat is of government and corporate behaviours that, taken together, have the potential to balkanize the global economy. The most stark example is in capital markets, where financial markets (often nudged this way by politicians) have retrenched to the familiarity of their home markets. In the most globilised of sectors, countries' borders matter again. Similarly, as governments put in place fiscal stimulus packages and intervene to support individual sectors, the focus will inevitably be on the domestic market. Unfortunately you can easily imagine the net effect being the partial fragmentation of the global economy without governments touching tariffs on foreign investment rules. Food for thought in the snowfields of Davos and during the run-up to the London G20 Summit in April.

Posted at 14:31 27 January 2009 by Oliver Griffiths  |  Comments[0]

Counterfeits and crack pipes

I am just back from a study tour looking at the enforcement of intellectual property rights (IPR) in LA. This was a mix of the old (a bust on a stall in Santee Alley selling fake Chanel bags) and the new (talking to the studios about how they plan to compete with peer-to-peer file sharing).

I'm not sure if it was because the tour was organised by the French Embassy but fake Chanel bags ended up being a theme of the trip. We witnessed boxes of Chanel fakes (including some baseball caps whose bad taste would cause heart attacks at Chanel Design Central) being opened by Customs and Border Protection agents at the LA-Long Beach port complex. The scale of the challenge they face is immense - the port handles 5 million containers annually, which represent 45% of the US total and are worth $350 billion in two-way trade flows. To put that figure in context, it is roughly the same as total EU imports of goods into the US last year. Roughly $70 million of counterfeit merchandise was intercepted at the port last year. The most seized item? Shoes from China.

Two other themes were the diversification of counterfeited goods and the increasing participation of organised crime. The attractions of counterfeiting are that margins can be big and the punishment tends to be probation rather than jail time (I suppose reflecting a misguided societal view that IPR infringement is a victimless crime). It's an issue that we're taking very seriously in the UK. To take one example, our Fake Free London initiative aims for London to be free of counterfeits by the 2012 Olympics. But of all the items on display in LA, the one that caught my eye was not a straight counterfeit at all: a (working) branded hi-liter pen concealing a crack pipe.

The IPR challenge to the entertainment industry is well documented. The Motion Picture Association reckon that piracy led to a $18 billion of lost revenue for the industry in 2005. This is about much more than dodgy DVDs (though, incidently, the MPA reckon that it takes pirates about 13 hours from infringement to having mass-produced counterfeit DVDs on sale). Fast, cheap broadband access is one of the great benefits of our age - but also a real headache for the studios. They are looking to work with ISPs to address endemic peer-to-peer file sharing. The agreement between rights-holders and ISPs brokered by the UK government earlier this year is one promising approach - we are currently consulting on legislative options to address illicit P2P file sharing as well. The studios are also looking to compete with pirates in the content market, through products such as high quality video on demand. As a technology late-adopter, video on demand will be relevant for me in about 2015.

Posted at 14:07 30 October 2008 by Oliver Griffiths  |  Comments[1]