Fight Illicit Trade with Public-Private Partnerships, U.S. Says

Trade in illicit tobacco products, such as these cigarettes confiscated at a border crossing in central Europe, costs governments around the world as much as $50 billion a year in lost tax revenue.

Washington — The United States is urging international action to fight illicit trade that is spreading at an alarming rate and undermining global growth and stability.

Illicit trade covers everything from counterfeit designer bags to bogus medicines, weapons and humans themselves.

“No single government or company can design and implement an effective solution to this complex problem alone, nor does any single entity have a complete understanding of how vast the problem really is,” David Luna, the director of the State Department’s anti-crime programs, said at the Organisation for Economic Co-operation and Development (OECD) in Paris April 2.

Public-private partnerships offer the tools to shut down the global illegal economy, which accounts for 8 percent to 15 percent of the world’s gross domestic product, he said.

Luna said the cumulative effect of illicit trade is more devastating than terrorist attacks, natural disasters and factory fires.

“We experience their impact every day: when governments cannot afford to provide vital public services because customs revenues are being siphoned away by smugglers, criminals and corrupt officials; when people die because the drug they were told would cure malaria actually contains chalk,” he said.

A book, Illicit, published by the editor of Foreign Policy magazine, Moisés Naím, in 2005, alerted the world to the danger posed by illicit trade. It documented how illicit trade has been growing many times faster than legal trade since the 1990s and is redefining economic relationships, borders and the role of workers, managers, armies and governments.

Luna said the United States looks forward to working with businesses and governments in the 34 countries that belong to the OECD to develop innovative ways to combat illicit trade.

“When illicit actors and networks continue to profit from drugs, criminal activities and corruption, legitimate commerce loses out as the illegal economy expands and the legitimate one shrinks. This is an outcome we cannot afford in these austere financial times,” Luna said.