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GSI 1: The future of cross border trade

By collaborating with GS1, national governments will be able to adapt and get on board a global consumer protection mechanism.

Jess Varela

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The GS1, where 115 economies and more than a million strong member companies engaged in cross border trade are part of, provides an ecosystem that protects consumers, allow efficient inventory management and other cost-saving mechanisms for businesses and a common language for interoperability. Such global standards will define the future of trade. Today, let us tackle the issue of counterfeiting.

Imagine yourself shopping online or in any other store, and you come across a product you may need or want being offered to you at a very affordable price and in an easily accessible means of obtaining it. At first you may consider this a good opportunity, but perhaps there may be a part of you that feels that the offer seems too good to be true. Not only that — the source where the product comes from may also be of questionable background or the absence and/or lack of information of its origin makes the reliability and authenticity of the merchandise uncertain. Without having the correct and relevant information, there is no way to determine if something you see before you is actually the real deal, or possibly (and more likely) a counterfeit.

Counterfeit, by simple definition, refers to something that is made as an imitation to something authentic. For as old as the idea of business has been around, the act of counterfeiting has always been prevalent. Several risks and threats are faced by both the consumers and manufacturers. Counterfeits have always been present and have scattered throughout any economy, be it in the malls of our cities, the avenues of New York and Paris or the streets of Taiwan or Hong Kong. With the world becoming more global in this era of digitalization and e-commerce, counterfeiting has become dangerous and riskier for businesses and consumers alike as more gateways are made easy and convenient to spread its influence. With the advent of Internet of Things becoming a commonality in today’s age, it is now more efficient for companies and industries to market their merchandise and conduct their businesses online and for consumers to purchase or acquire their respective products or goods with a flick of a finger. But at the same time, it has become similarly easy for counterfeiters to expand their presence and sell counterfeit or substandard goods to online consumers with the benefit of concealing themselves and the product’s basic information such as descriptions, origin and attributes.

For businesses however, counterfeiting harms them in the form of lost sales. Brand owners who are looking to increase brand recognition are likewise faced with challenges that disincentivize innovation. Moreover, the proliferation of counterfeits negatively impacts a brand’s image and integrity in the eyes of consumers. Similarly, counterfeits run the huge risk of harming consumers as they are unable to distinguish counterfeits from the real thing.

The risks are even higher in the case of health care or the pharmaceutical sectors, where faulty medical equipment or unsupervised medicinal goods may have harmful effects on consumers who may have thought these health care products would cure them of their sicknesses but instead realize that the products are ineffective at best, or worse, experience further side effects that could even be fatal. A study on transactional crime in the Philippines made by the United Nations back in 2019 has said the country is known for having the highest incident count of falsified medicines out of all Southeast Asian countries. And out of the 460 reported incidents of counterfeiting and illegal distribution of pharmaceutical products during 2013-2017, about 193 of them happened in the Philippines.

In response to this, GS1 has taken itself to partake in multiple measures and procedures in order to fight against counterfeiting in all parts of the world. One example is the GS1 partnering with the World Customs Organization (WCO) (the only international intergovernmental organization that deals with customs procedures and regulations governing cross border trade) — with the end in view of rapidly detecting counterfeit goods. As a result of this partnership, the WCO now uses GS1’s global standards to help customs organizations and companies alike to fight against counterfeiting and other issues it causes worldwide. GS1 empowers businesses and consumers with a global standard and system to identify bona fide companies, authorized product origin, product descriptions and attributes and the ability to trace the same in the entire supply chain.

These GS1 global standards are also applicable in helping national governments in their respective affairs. Some countries have already implemented these standards in order to collect and process information that is timely and accurate. One example is the General Administration of Customs in China memorandum that mandates the use of the Global Trade Item Number (GTIN) for all products entering its jurisdiction.

GTIN is a part of the GS1 ecosystem that triggers traceability, among others. The Kingdom of Saudi Arabia is likewise adopting the GS1 system for products entering its territories. The United States is already using GS1 standards in order to facilitate the implementation of imported product information, or has started contemplating the facilitation of GS1 standards.
By collaborating with GS1, national governments will be able to adapt and get on board a global consumer protection mechanism while creating a data information system and platform that interconnects and are interoperable with all stakeholders.

GS1 PHILIPPINES is intensifying its awareness programs and conducting seminars throughout the archipelago to show how the future of Trade will be. It’s now time to get on board.

 

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