Retail body warns against the dangers of illicit trade

| June 27, 2018

The Australian Retailers Association (ARA) believes that an Australia that fights against illicit trade and supports our region to do the same, is a safer Australia.

The ARA-commissioned report, The Global Illicit Trade Environment Index, showed that as a nation, Australia ranks fifth among the 84 nations surveyed, underlining the success of Australia’s national policies and initiatives in combating illicit trade.

However, those involved in illicit trade are not bound by borders, so the effectiveness of Australian government policy needs to extend beyond our country borders. And the recent United Nations International Day Against Drug Abuse and Illicit Trafficking, a focus on a regional collective effort is even more important.

The new Index found some 60% of our top import partners from the Asian region, rank in the bottom 50% of countries assessed.

Russell Zimmerman, Executive Director of the ARA, said that stepping up to the plate to help our Asia-Pacific trading partners presents a compelling opportunity for Australia to focus on global risk-areas to reduce illicit trade.

“Eighty percent of Australian two-way trading partners are from the Asia-Pacific region, and Asia’s historic association with being a world supplier of illicit goods also cannot be overlooked,” Mr Zimmerman said.

“Australia and New Zealand are well-placed to leverage our close relationship to inform a collaborative approach towards Asia-Pacific trade, alongside other high performers such as Japan and South Korea, in assisting our regional neighbours to improve.”

The ARA have been actively working with various Government organisations, as well as forming the Australians to Stop Counterfeiting and Piracy (AUSCAP) industry group to stop the illegal trade in consumer goods.

Combined with their recent initiative to combat the illicit tobacco trade, which in 2017 was estimated to cost the Government some $1.91 billion in lost excise revenue alone, the ARA believe this new report demonstrates that Australia can, and should be keeping its foot on the throat of illicit trade, spreading its experience and lessons learned with international trade partners.

The report highlights 10 of Australia’s top 15 import sources as being members of the Asia-Pacific region, all who vastly differ on the spectrum of the Report Index – ranging from New Zealand ranking 4th, to Indonesia ranking 68th.

Following these results, report author Chris Clague, Managing Editor Asia & Global editorial lead of Trade and Globalisation, outlines the fact that the poor governance of Free Trade Zones in Asian economies is a major contributor to illicit trade.

“Free Trade Zones represent an area in which international cooperation is key, and balancing the reason for the zone with the importance of protecting against illicit is a difficult equation,” Mr Clague said.

“They present a space in which illicit trade can be intercepted before entering markets and are an important component of supply chains.”

The ARA concede that while illicit trade causes unacceptable damage to legitimate businesses, it is also at the centre of many of the most challenging crises facing our world.

“The ARA are fiercely committed to protecting Australian businesses by stamping out global illicit trade. This will not only protect Australian commercial interests, but also keep our country safer,” Mr Zimmerman said.