Digital Free Trade Zones: A Nightmare for IP Protection

This February, the First Global Cross-Border E-Commerce Conference was held in Beijing, organized by the World Customs Organization (WCO) and the General Administration of China Customs. Beijing was an obvious choice of location given the fact that 40 percent of global e-commerce is carried on in China – not to mention the country’s leading position in electronic payment systems.

Alibaba founder and CEO Jack Ma sees the future of the global economic development in cross-border e-commerce: “Made in China” or “Made in the USA” shall be replaced by “Made in the Internet” – and B2C should become C2B, Consumer to Business.

Alibaba is already implementing powerful tools in order to realize this vision. The Digital Free Trade Zone between China and Malaysia is already functioning – the first one outside of Chinese borders. The e-World Trade Platform is aimed to become the global trade basis along the New Silk Road. Further administrative and technical developments such as speeding up the processes of packaging or customs control, or deliveries by drones, are expected to further promote the cross-border e-commerce.

Although the concept of barrier-free global trade is innovative and provides a lot of opportunities for SMEs worldwide, it also raises concerns about anti-counterfeiting and IP rights protection. The growth of e-commerce especially in those countries along the Belt-and-Road-Initiative that have a weak legal framework for the protection of IP rights is likely to further aggregate the problems of global counterfeiting.

Western businesses have to monitor the developments of cross-border e-commerce closely in order to benefit from growing global trade, while ensuring gapless protection and successful enforcement of their own IP rights.

Picture: The Malaysian Reserve

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