US blacklist of counterfeit peddlers is the latest flashpoint in a potential trade row with China

PUBLISHED : Saturday, 13 January, 2018, 5:36pm
UPDATED : Saturday, 13 January, 2018, 10:32pm

The decision by the United States Trade Representative to keep the world’s largest online shopping platform on its blacklist of counterfeit peddlers is a politicised process to create a scapegoat in a trade row between the two biggest economies on earth, said Alibaba Group Holdings.

Alibaba, owner of the South China Morning Post and operator of the Taobao family of e-commerce market places, was put on the 2017 Out-of-Cycle Review of Notorious Markets list on January 11, because they were named by small and medium US enterprises for enforcement action more than any other platform, said the report.

That action ignored the efforts made on enforcements, where 98 per cent of proactive takedowns of counterfeit products were made before any sales could be transacted on Taobo, where 97 per cent of takedown requests were handled within 24 hours, said Alibaba’s president Michael Evans.

“In light of all this, it’s clear that no matter how much action we take and progress we make, the USTR is not actually interested in seeing tangible results,” Evans said. “Therefore, our inclusion on its list is not an accurate representation of Alibaba’s results in protecting brands and IP, and we have no other choice but to conclude that this is a deeply flawed, biased and politicised process.”

Read: Alibaba’s bot the latest weapon in China’s fight against bootleggers

The USTR’s list may be the latest flashpoint in the trade relations between the word’s two biggest economies, where a yawning surplus had widened in China’s favour, increasing by 8.6 per cent in 2017 to a record US$275.8 billion. Combined with threats by the Donald Trump administration to slap import tariffs on Chinese products, the prospect of a tit-for-tat dispute is rising.

The list, which catalogues 25 online markets and 18 physical markets around the world, highlights global piracy and counterfeiting in defence of American products and workers, US Trade Representative Robert Lighthizer said.

“Marketplaces worldwide that contribute to illicit trade cause severe harm to the American economy, innovation, and workers,” Lighthizer said. “The Trump Administration is committed to holding intellectual property right violators accountable and intensifying efforts to combat counterfeiting and piracy.” 

Alibaba’s Taobao group of online market places handled more transactions than any other platform in the market, with US$25.3 billion in gross merchandise volume recorded over 24 hours during last year’s Singles’ Day, more than America’s Black Friday and Cyber Monday shopping gala combined.

While the number of rights holders registered for the programme grew by 11 per cent year on year, the number of takedown requests fell by 25 per cent as a direct result of the company’s ability to remove infringing listings before they make it to marketplaces, Evans said.

“As a result of the rise of trade protectionism, Alibaba has been turned into a scapegoat by the USTR to win points in a highly politicised environment and their actions should be recognised for what they are,” an Alibaba spokesman said. “The USTR’s actions made it clear that the Notorious Markets List, which only targets non-US marketplaces, is not about intellectual property protection, but just another instrument to achieve the US government’s geopolitical objectives.”