Customs’ direct action against parallel imports makes us look like fools

Surely one of the most egregious self-inflicted insults anyone can imagine

PUBLISHED : Wednesday, 26 October, 2016, 12:07pm
UPDATED : Wednesday, 26 October, 2016, 11:01pm

Hong Kong has ranked third among the 17 Asia Pacific economies for its efforts to combat illicit trade, according to a study.

SCMP, October 13

The interesting bit about this Illicit Trade Environment Index study is that it was commissioned by the European Chamber of Commerce in Singapore but gave Singapore one of its very lowest scores on a “pillar” for Transparency and Trade, 25.8 out of 100, barely a notch above Cambodia.

Well done, Singapore. I confess that Singapore bashing is one of my favourite pastimes in this column but for this achievement I can only lavish praise. What a superb digital salute to that unctuous European righteousness that would make us all cogs of the wheel of state.

The study made the proper “tut-tut-tut” sounds on behalf of the European chamber of course. I laugh. Singapore, like Hong Kong, thrives by performing for its neighbours those economic services that they cannot or will not perform themselves. Much of this has naturally to remain hush hush.

The study gave Hong Kong a higher 69.5 rating on this “pillar” (what a tickle of an invented word), entirely missing, as far as I can make out, the HK$3.5 trillion a year money laundering service we call re-exports.

It also seems to have missed the other money laundry service we offer to mainland residents in financial non-reserve asset movements on the balance of payments.

On three occasions over the last ten years this has cleaned up capital flows equivalent to more than 100 per cent of our gross domestic product. Oh, well.

But my concern today is more with the high (80 out of 100) rating the study gave us for enforcement of intellectual property rights. This is much too high. We have been too unctuously good.

Let me clear the air here. I think copyright laws do more to hinder creativity than to foster it and play a significant role in perpetuating income disparity across the world. The pendulum has swing much too far in favour of copyright holders. I’m for Robin Hood.

He can’t win, of course, but I have a soft spot for him and his merry band and I rejoice at the rare victories against big corporate copyright holders.

Copyright laws do more to hinder creativity than to foster it and play a significant role in perpetuating income disparity across the world. The pendulum has swing much too far in favour of copyright holders. I’m for Robin Hood

What a delight it was, for instance, to see Warner Brothers separated in court from the copyright grasp it had attempted to exert on the song “Happy Birthday”.

But if you don’t agree with me, and you probably don’t, let us at least have it understood that what we practise in Hong Kong is (by my lights) much worse than ordinary copyright protection.

We prohibit parallel imports, by which I do not mean baby milk shipments across the border but imports of legitimate copyright-paid-up goods that have not been specifically cleared by the copyright holder for distribution in Hong Kong.

Thus, for instance, branded soft drinks may be available in Shenzen for half their price in Hong Kong but no-one may ship in these lower-priced Shenzen soft drinks without permission from the Hong Kong distributor of the foreign copyright holder.

I repeat, these are not pirated goods. They are the legitimate copyrighted articles. But even then we may not deal in them without specific authority.

At the behest of foreign interests our own Hong Kong government has imposed on us, the people of Hong Kong, an extra gouge that copyright laws do not require and that only benefits these foreign interests.

Even this, however, is not the worst of it. These same foreign interests (largely American) have convinced our government that our tax money must be used to enforce their supposed “rights” through direct action at our borders by our Customs and Excise Department against parallel imports.

This has to be one of the most egregious self-inflicted insults that anyone can imagine. We bear the cost of imposing on ourselves extra copyright related costs that no international agreement on intellectual property actually requires of us. We gouge ourselves without reason. We make ourselves look fools.

And that’s why I say we have too high a score in this study on illicit trade. I doubt that much of it is truly “illicit” anyway but for some of it I cheer heartily. Hurrah for Robin Hood.