AAFA flags importance of Notorious Markets review and calls for accountability

The American Apparel & Footwear Association applauds the Office of the United States Trade Representative (USTR), and interagency partners, in issuing today's annual Notorious Markets report.

"We are pleased to see that USTR retained two markets on the list – DHGate and Shopee. At the same time, three key markets that AAFA nominated - Meta, Alibaba Cloud, and Lazada - were not listed. AAFA members remain deeply concerned about the range of counterfeit dangers, including health and safety and financial risks to consumers. Counterfeits, and the digital devalue chain of counterfeits, continue to grow in number and complexity. AAFA members invest millions to build, train, and inspect supply chains to ensure that the clothes, shoes, and accessories bought and worn by American families are not only fashionable and affordable but are also ethically and sustainably sourced and made, and safe for consumers. These same members make significant investments to combat the promotion and sale of counterfeit goods, which tarnish brand reputation and harm consumers and workers, while the platforms that profit off these counterfeits are shielded from liability,” says AAFA President and CEO Steve Lamar.

"USTR's Notorious Markets report plays in an important role by listing several platforms that profit from the growing digital devalue chain of counterfeits; an illicit web of misinformation and consumer deception deployed by nefarious individuals and criminal groups to promote and sell counterfeits on third-party social commerce and marketplace platforms. We call on Congress to ask hard questions of representatives of major e-commerce and social media platforms when they testify before Congress this week, including why these companies can’t stop the promotion and sale of counterfeits on their platforms. We also call on Congress to swiftly pass the much-needed SHOP SAFE Act."

In the report, USTR highlights the health and safety risks posed by counterfeit goods, citing AAFA's March 2022 laboratory study that revealed significant dangerous chemicals in counterfeit products. USTR noted, “Even small amounts of these substances can lead to adverse health outcomes.” Of the 47 counterfeit items - clothing, footwear, and other accessories - tested, 17 products (or 36.2 percent) failed to comply with U.S. product safety standards, containing dangerous levels of arsenic, cadmium, phthalates, lead, and more.

On October 6, 2023, AAFA submitted 2023 comments to the Office of the USTR, quantifying and explaining the abundance harm consumers face from the digital devalue chain of counterfeits. AAFA nominated five platforms for USTR’s list based on member feedback, and detailed the resources brands must allocate to police marketplaces across the digital devalue chain of counterfeits.

Related, AAFA testified in front of Congress on October 3, 2023; hosted a press conference with USA-IT on November 20, 2023; and is a champion of the proposed SHOP SAFE Act in coordination with cross-industry partners.