Veiled Arab women mingle with Western tourists in shorts to browse shelves full of Gucci and Christian Dior handbags ? sleek goods which look a little too upmarket for such a modest shop. ?Louis Vuitton copies are in the back,? the Iranian proprietor tells a customer conspiratorially. ?Their local agent is active and we have had raids.? The shop also sells copies of designer watches. Swoops on such businesses have reduced the traffic in counterfeit goods and have helped place Dubai, in the United Arab Emirates (UAE), at the forefront of the fight against trade piracy in the Middle East.

But experts say the booming commercial hub is still a regional gateway for the spread of fakes across the region. ?Dubai is the victim of its own success,? said Scott Butler, chief executive officer of the Arabian Anti-Piracy Alliance, a private watchdog. ?Lots of goods go through Dubai?s ports and airport and there are complaints in the region and as far away as South Africa that counterfeit goods they seize came through here,? he added.

Flexible rules help smugglers

A regional tourism hub, Dubai draws 5 million visitors a year to its bustling shopping centres, a figure it hopes to triple by 2010. Many buy cheap counterfeit goods to take home. Officials say the United Arab Emirates? large modern ports and airports make it a favourite destination for smugglers. One veteran trader said Dubai?s streamlined import procedures, in a region known for its bureaucracy, attracted the pirates. ?The UAE is advanced in the way goods are brought in and out of the country and that is why these criminals try and use it,? Mohammed al-Marri, Dubai Customs director of operations, told the daily Emirates Today. ?But our customs security is as strict as anywhere in the world and we are stopping them.?

Sectors plagued by piracy in the Gulf include software, music, films, pay television and cigarettes. ?UAE is a major transit-way for counterfeit goods, including cigarettes. Cigarettes are relatively cheap here so most pass through to expensive markets such as Europe,? Dale Davis, brand protection manager at British American Tobacco , told Reuters.

He said over 90 percent of such cigarettes came from China. A Western trade expert said Dubai?s successes in fighting smugglers were concealed by a surge in exports. ?The portion of counterfeit goods in Dubai?s re-exports is probably falling, but the problem remains as volumes are rising fast,? he said, adding that Dubai?s ports ranked 10th in the world and were growing at the third fastest global rate. Dubai?s imports grew 37 percent in 2004 to nearly $ 49 billion while re-exports surged 51 percent to $15.5 billion.

Dubai recently launched a customs unit to fight intellectual property rights violations, a regional first. The UAE is seeking a free trade agreement with the United States. ?Dubai could improve its fight through more international cooperation so that containers are monitored as they leave Asia and information is shared to seize counterfeits,? Butler said.

At 34 percent, the UAE?s software piracy rate is the lowest in the Middle East and North Africa, where losses due to piracy amounted to $1.2 billion in 2004, according to industry watchdog Business Software Alliance.

The low piracy rate has helped Dubai gain credibility and encouraged international information technology companies to invest in the emirate, which is trying to diversify its economy. By comparison, neighbouring Saudi Arabia ? the largest Gulf Arab country ? is lagging at 54 percent.

Not everyone is against the trade of knock-off copies. ?As a frequent visitor to Dubai, it makes sense to take back cheap cigarettes, watches, DVDs and so on to sell to friends for a small profit or give as gifts,? said James, a visitor from Britain. ?They?re happy with their Tag Heuer watch or cheap carton of cigarettes, and I make a little money. I know it?s wrong and the people running the trading of these fakes are hardened criminals, but ordinary people can?t afford the originals of these luxury items.?