09 July 2019

One Belt One Road – one big threat?

All roads lead to Rome, all Silk Roads lead to China. With the latest, most ambitious Chinese initiative dawning upon us, it is essential for IP right holders to factor in the changes and challenges that come along with the One Belt One Road (OBOR) strategy. 

What is the OBOR?

The OBOR is a Chinese strategy which was initiated in 2013. Its aim is to forge closer economic ties by linking Europe and Asia through an improved transport infrastructure, consisting mainly of new rail routes, called ‘belts’, and new maritime routes, confusingly called ‘roads’.

The strategy has gained popularity rapidly, with over 80 countries adhering to the overall initiative since 2013.

The threat

One of the ‘belts’ connects China with Europe, with trains arriving in Paris and London and one of the main ‘roads’ will start in China and reach Italy through the Suez Canal, connecting with ports in Singapore, Kuala Lumpur, Sri Lanka, Maldives, Seychelles and Africa on the way.

We are, therefore, witnessing the development of a fast transport system that joins together new production countries in Southeast Asia, Central Asia and Africa, with western countries of destination. Add in the lower costs of production, the increasing number of free-trade zones and the less stringent customs controls along the OBOR routes and you’ve got yourself a very favourable environment for counterfeiting and organised crime activities.

The maritime routes will remain cheaper and thus preferred by counterfeiters in some instances, while the new railways provide for much faster transport, which could serve as a more appropriate method of ferrying a wide range of ‘limited life’ goods, such as pharmaceuticals and foodstuffs.

UK, EU and the OBOR

The European Commission has stated that the EU will be the final destination for at least one-third of Chinese exports, with an estimated value in excess of $600 billion per year. By 2020, it is suggested that this could reach $1 trillion.

With the UK set to leave the EU, right holders are concerned that due to a potential bilateral trade deal with China, the UK will become the destination for huge volumes of counterfeit goods, but that the UK will not deploy the corresponding levels of additional customs control. Moreover, there are concerns that post-Brexit, the cooperation between EU and UK customs could suffer, with the EU limiting access to its information and intelligence.

The solution?

In light of all this, both EU and UK right holders call for long term, policy preparation for the development of the OBOR strategy. They urge the West to take the initiative and improve the customs control capacity at ports, free zones and rail stops, and lobby for better control and expertise in the Southeast Asian, Central Asian and Eastern European countries.

As for the relations between the UK and the EU, right holders believe it vital that the two parties take joint responsibility and work together to ensure safety and security, even after Brexit concludes. This will certainly be a work in progress and we will be sure to keep you updated as things progress.

Adela Dinca