Author: Rubén Tamboleo García
Date: 27-07-2026
A container ship idling off a major port, waiting its turn among hundreds of others, is not usually where one looks for the roots of illicit trade. Yet it is precisely there – in the sheer density and speed of global exchange – that the conditions for illicit trade are manufactured. Globalization did not simply open borders to legitimate commerce; it built the infrastructure, the deregulated corridors, and the demand asymmetries that illicit actors now exploit with remarkable efficiency. Understanding illicit trade as a “phenomenon,” as WG1 frames it, means starting here: not with criminals, but with a global economic order that makes their activity structurally possible.
The first piece of the puzzle is inequality. Globalization has never distributed its gains evenly, and the gaps it leaves behind are not incidental – they are productive. Where formal markets fail to absorb labor, where regulatory capacity is thin, and where the price differential between regions is steep enough to reward risk, illicit trade finds fertile ground. Counterfeit goods flow from low-cost manufacturing hubs to high-margin consumer markets for the same reason legitimate goods do: comparative advantage. The difference is that illicit actors are free to ignore the costs – labor standards, environmental compliance, taxation – that legitimate firms must absorb. In this sense, illicit trade is less an aberration of globalization than one of its more efficient expressions: an economy that has learned to arbitrage not just prices, but law itself. Wherever globalization has produced losers – deindustrialized regions, informal workers, communities bypassed by capital flows – it has also produced recruits, consumers, and tolerant bystanders for illicit markets.
But inequality alone does not sustain illicit trade over the long run; it needs to be normalized. This is where cultural frameworks of legitimation enter, and where the phenomenon becomes durable rather than episodic. Illicit trade rarely announces itself as criminal to the communities that host it. Instead, it is absorbed into local narratives of survival, resistance, or even entrepreneurship. Smuggling along historic trade routes is remembered as tradition rather than transgression. Counterfeit consumption is framed as a rational response to markets that price the poor out of branded goods. Informal economies that skirt customs and tax regimes are described, by their own participants, as simply “getting by” in a system perceived as rigged against them. These are not naïve rationalizations; they are coherent moral economies that compete with, and often defeat, the formal legal order. Once illicit trade is culturally legible as legitimate – or at least as forgivable – enforcement becomes a matter of imposing an external morality on a population that has already settled its own.
The final piece closes the circuit: the state’s own ambivalence. It is tempting to view illicit trade purely as something states fight and fail to contain. The more uncomfortable truth is that states frequently, if quietly, permit it. Weak enforcement is sometimes simple incapacity, but often it is calculated tolerance – illicit trade absorbs unemployment that formal policy cannot, generates informal remittances that stabilize fragile regions, and, in some jurisdictions, feeds patronage networks that political elites have every incentive to protect. Selective enforcement, underfunded customs agencies, and jurisdictional gaps between states are not always oversights; they are, in effect, policy. This is the least discussed dimension of illicit trade precisely because it is the most politically costly to name: acknowledging state permissiveness means acknowledging that formal and illicit economies are not opposites, but interdependent parts of the same governance arrangement.
Taken together, these three layers – the inequalities globalization generates, the cultural frameworks that legitimize exploiting them, and the state structures that tolerate the result – do not operate in sequence so much as in a loop, each reinforcing the conditions for the next. Illicit trade, from this vantage point, is not a failure of globalization to reach everywhere. It is one of the more successful things globalization has built.
About the Author: Rubén Tamboleo García, www.tamboleo.com
