Dive Brief:

• Alibaba Group Holding Ltd is scrambling to stay off the U.S. Trade Representative's (USTR) blacklist for allowing alleged counterfeits to be sold on its marketplaces.

• Last month USTR called for public input to help put together its latest "Notorious Markets" list, and at least three groups have told the office that counterfeits are rampant on Alibaba’s sites and that the company doesn’t respond well when notified of them.

• Alibaba.com and Taobao Marketplace had been on the USTR's "Notorious Markets" list in the past, with Alibaba.com coming off in 2011 and Taobao off in 2012.

Dive Insight:

American trade groups and some retailers are telling Reuters that there continues to be serious problems with counterfeit goods on Alibaba’s marketplaces.

"It was a mistake to take them off of the 'notorious markets' list," one sportswear source whose goods are sold through Alibaba’s sites told Reuters, declining to be named.

The American Apparel & Footwear Association, which represents more than 1,000 clothing and shoe brands, this summer sent another open letter to Alibaba Group founder and chairman Jack Ma over what it says is a lack of progress combating the sale of fakes through the company’s e-commerce sites. 

Eric Pelletier, who joined Alibaba in June as its government affairs chief, sent two letters to the USTR this month rebutting the criticism and is meeting with the agency over the allegations, Reuters reports.

If Alibaba’s sites return to the list, it would be a setback for the Chinese retailer, which has seen its stock price slide and is dealing with struggles in the Chinese economy. Ma has said the company is making every effort to combat the issue because, as he told the Chinese news agency Xinhua, "I don't believe success can built on dishonesty.”