Parallel imports and price controls princeton university. A new study on car prices has reignited the debate around parallel imports and whether or not australia offers cheaper new car prices than japan and the uk. One of the major advantages of export is the ownership advantage which is specific to the firms international experience, asset and ability of the exporter to either develop the differentiated product or low cost. The parallel import is then sold in the country for example in south africa at a lower price and without the usual guarantee andor after sales service that usually. The economy of pakistan is the 23rd largest in the world in terms of purchasing power parity ppp, and 42nd largest in terms of nominal gross domestic product. The parallel import restrictions mean that we pay more for every book we buy, not just australian titles. But there are pitfalls in the federal governments new parallel. Lets allow parallel book imports, and subsidise australian. The australian government yesterday announced it intends to repeal parallel importation restrictions on books, which has again caused concern in the publishing industry. The federal government is set to rescind existing parallel importation. Autotalk delves into the key opposing views on the subject.
Its time to kill parallel import restrictions crikey. Authors and publishers condemn push to repeal parallel import. The australian book industry does not depend on tariffs or subsidies. Parallel importing gives importers the opportunity to offer authentic branded item to consumers at a more affordable price by cutting out the additional costs incurred where a. The productivity commission the productivity commission is the australian governments independent research and advisory body on a range of economic, social and environmental issues affecting the welfare of australians. Labor to oppose cheaper book imports, backing australian. However, the laws governing parallel imports are still in infancy and require clarification in many jurisdictions, including malaysia. Australia s restrictions on the parallel importation of books result in higher local book prices, according to a report released today by the productivity commission.
This inquiry is the fifth governmentsponsored inquiry since the late 1980s, and follows the liberalisation of pirs on sound recordings and computer software. While this is a cost to consumers, the benefits to publishers and authors are not welltargeted. A practical example is the costs of salesorreturn systems. Flooding australia with imported books would be an assault. As we will show, the deregulation of parallel imports in a highly innovative economy always induces the government of its lessinnovative trade partner to loosen its price controls. Plan to end restrictions on parallel book imports does not stack up. Currently the parallel importation of books into australia is regulated, which means that retailers can only buy bulk copies of a book from the publisher who holds australian rights. Trade mark owners will now find it much more difficult to prevent parallel imports coming into australia. In australia, local importers are currently protected by laws preventing people from sourcing new cars outside official channels, but from 2018 buyers will be allowed to bypass dealers and local importers by sourcing cars from overseas. Two concise introductory chapters clearly present the economic and legal foundations of the subject matter. Currently, if australian publishers release a book here within 30 days of it being published in an overseas market, booksellers cannot import and sell stocks of the same book from overseas. Parallel imports, or grey imports, help beat price discrimination in australia. Dec 17, 2015 the parallel import restrictions mean that we pay more for every book we buy, not just australian titles. Goods that do not incur heavy transportation costs are most at risk.
Dec 17, 2015 parallel import restrictions provide the original publisher of a book with the exclusive right to bring that book into australia for commercial purposes. Australias debate on book imports, copyright and fair use. Apr 20, 2017 the united kingdoms unprecedented vote to leave the eu will undoubtedly cause a broad range of legal issues in the future. Parallel import change threat to aussie books sprinter. Parallel imports only address a demand where it preexists. Individuals refer to this as gray market goods, and most trades entail highpriced branded goods such as jewelry, cameras, tablets, and watches.
These imports tend to be outside authorized importer channels, and are often carried by ordinary tourists. Publishers try to hold back the tide on parallel imports. Parallel importing is an unauthorized import of noncounterfeit goods into a country. The australian market is an example of a relatively small consumer market which does not benefit from the economies of. Labor defends import protection for australias book publishers this article is more than 3 years old opposition announces it will oppose moves to lift parallel import restrictions on books to. Michael heyward is the publisher at the text publishing company in melbourne. When an importer finds a cheaper price of a good or equivalent good on the world market and imports the good instead of paying higher local prices. Also, the 1991 amendments to the general prohibition on parallel importation did not directly affect the preexisting rights of consumers to purchase books for personal use from overseas. Implications for competition and prices in developing countries keith e. One of its objectives is to promote the free flow of information and ideas in the interest of all australians and a thriving culture, economy and democracy. Productivity commission 2009, restrictions on the parallel importation of books, research report, canberra. Hence it is important for books to be there at the consumers fingertips when he browses a book shop. A parallel import is a noncounterfeit product imported from another country without the permission of the intellectual property owner.
A parallel import also referred to as grey goods is a genuine product which is imported from another country without the consent of the intellectual property right owner. Oct 26, 2016 goods that are imported and sold outside the official distribution channels are known as parallel imports, or sometimes grey or direct imports. There are some advantages and disadvantages of international trade for both the export and import. The parallel imported cars were available for individual buyers in february 2015, after the shanghai free trade zone started its pilot plan. Suppose that 20% of the volume of book sales in australia is by australian authors. The battle to maintain parallel importation restrictions. Australians who cannot buy books online also end up paying higher prices, the. The accc recognises the potential benefit to consumers of access to parallel imports which may be cheaper or otherwise not available in australia. Plan to end restrictions on parallel book imports does not. Parallel imports pi are the goods produced under the legal, genuinely with patents and rights circulating in one market that is home market of the product.
Currently the parallel importation of books into australia is regulated, which. However, consumers may sometimes be disadvantaged when purchasing parallel imports as opposed to purchasing the same products from an australian authorised supplier. Malaysia parallel import law clarified mirandah asia. The australian economy and financial markets may 2020. Research report copyright restrictions on the parallel. This allows publishers to treat australia as a separate market from the rest of the world, and increases their market power compared to book. Dec 16, 2015 a group of published economists has called on federal parliament to lift the ban on parallel imports of books. Table 1 offers some basic measures of trade costs in various highly detailed 10digit harmonized system classifications for u. Shortly after that, we should see a published edition of the final report.
W hen we last looked in on the controversy in australia around that countrys productivity commission draft report on intellectual property rights, a public commentary period was playing out. It is a common misconception that parallel imports are always cheaper for consumers than the goods sold directly by the brand owner. When faced with artificially high prices for books as well as the total unavailability of particular books in the domestic market, customers will simply resort to downloading. Parallel importing is based on concept of exhaustion of intellectual property rights.
The australian economy 2 provides all the background you need in order to understand the business pages of the newspaper and the major economic debates. That publisher has to make that book available in australia very quickly in order to retain their exclusivity, however, and both booksellers and consumers are free to purchase single copies of any book direct from the overseas supplier at any time. This allows publishers to treat australia as a separate market from the rest of the world, and increases their market power compared to book buyers in this country. Parallel imports are often referred to as grey product and are implicated in issues of international trade, and intellectual property parallel importing is based on concept of exhaustion of intellectual property rights. That period ended on june 3, and a final report is to be given to the australian government in august. Parallel import is a prevalent business model in the new age economy. In tien ying hong enterprises v beenion 2010, the high court of malaysia provided the much needed clarification. Purchases of capital goods fell by 3 percent to aud 5. In the 21st century it is in australias economic, cultural and social. Stack of old books by darren hester via flickr last week, the deadline passed for submissions to the productivity commissions study on the restrictions on the parallel importation of books to australia.
The proposed changes to parallel importation law that we blogged about in january 2018 and may 2018 have become law. The move pits the economists against some of australia s most famous novelists. For example, sneakers purchased from nike in the usa and subsequently imported to australia for sale without the authorisation of nike in the usa would be a parallel import. Before turning to the analysis, it is of interest to consider the importance of trade costs, which play a large role in the theory.
Advantages and disadvantages of importing and exporting. Copyright restrictions on the parallel importation of books. Parallel imports are often referred to as grey product and are implicated in issues of international trade, and intellectual property. Parallel imports and their effect on prices economics essay. Flooding australia with imported books would be an assault on. New parallel importation laws in australia ip law watch. Book exports, piracy and parallel imports in india ficci.
The proposal to abolish parallel import restrictions in the book publishing. Imports of goods and services to australia plunged 4 percent over a month earlier to an over twoyear low of aud 31. Pc and particularly its analysis of book prices in australia compared to the us and the. The impact of parallel imports on investments in cost. The australian economy and financial markets contents world economy 1 australian growth 4 australian inflation 5 household sector 6 business sector 8 credit and money 10 factors of production and labour market 11 regions and industry government 14 commodity prices 15 balance of payments and external position 16. Ganslandt and muskus 2004 construct a simple model to show that parallel imports decreases the domestic price of authorized products, and then use the price data of 50 drugs in sweden from 1994. The economy of australia is a highly developed market economy. The productivity commission is currently completing an inquiry into whether australia s parallel import restrictions pirs on books should be liberalised. The labor party has given australia s authors, booksellers and publishers an early christmas present, revealing it will oppose any attempt to remove restrictions on parallel imports of books. Parallel imports give dealers a run for their money. Parallel imports may benefit you by offering products at lower prices and providing access to items which otherwise may not be available in australia. Flooding australia with imported books would be an assault on our. Australia is the largest market in the world for australian books, and the.
Parallel importation of books productivity commission of the. Nov 24, 2015 the australian government yesterday announced it intends to repeal parallel importation restrictions on books, which has again caused concern in the publishing industry. Parallel imports sometimes referred to as gray market goods refer to branded goods that are imported into a market and sold there without the consent of the owner of the trademark in that market. This post focuses on the consequences of brexit on parallel imports a. Sep 10, 20 book exports, piracy and parallel imports in india ficci september 10, 20 with the retail revolution, the proliferation of international publication houses and the diversification in publication categories, the publishing industry has become an indispensible component of indias vibrant economy.
However, the laws governing parallel imports are still in infancy and require clarification in many jurisdictions, including malaysia in tien ying hong enterprises v beenion 2010, the high court of malaysia provided the much needed clarification. Labor defends import protection for australia s book publishers this article is more than 3 years old opposition announces it will oppose moves to lift parallel import restrictions on books to. Trade policy and parallel imports article in european journal of political economy 191. But, its impact does need to be monitored over time. Current restrictions mean that if a book has been published in australia and overseas. The move pits the economists against some of australia. Restrictions on the parallel importation of books productivity. Sep 02, 2016 will parallel imports impact dealers or car prices.
The goods are imported without the express permission of the intellectual property owner. Parallel import restrictions provide the original publisher of a book with the exclusive right to bring that book into australia for commercial purposes. The impact of parallel imports of books, films music and. Partisanship and economic interests are playing their part, too. The draft productivity commission report into intellectual property recommends that the australian government abolish parallel import restrictions on books, saying there is no new evidence that. Parallel importation of books to australia part 1 book. However, recently the minister for urban infrastructure, paul fletcher, announced the. In november, mr rudd abstained from voting on a cabinet decision on parallel book imports because of daughter jessicas publishing deal. The parallel import is then sold in the country for example in south africa at a lower price and without the usual. Will parallel imports impact dealers or car prices. The vast majority of books in book shops are sold to impulse buyers.
Parallel importation and australian book publishing. Can you really trust parallel imported goods in new zealand. For example, booksellers are able to parallel import a single copy of a book to satisfy a written customer order or to supply books to a library. Australian car buyers allowed to parallel import new cars from 2018. It was extremely disappointing to hear the news that the federal government would no longer be moving forward with proposed legislation to allow private imports of new vehicles. Parallel importation australian society of authors asa. In the late 1990s a number of countries such as australia, new zealand and singapore relaxed restrictions on parallel imports pis the importation of genuine goods into a country without the authorisation of the intellectual property right ipr holder in that country. Fully up to date, it explains the reasons for our continuing high levels of unemployment, government expenditure cuts and the impact of our high foreign debt. Our peculiar problem is that we are a small englishlanguage market, exposed by the above factors in an economy that can never produce the economies of scale enjoyed by our larger competitors. Ending parallel importation restrictions will do serious harm to our books industry. Now, parallel imports in asia brings together the insight and experience of fourteen academics and practitioners in this specialized but highly significant field, each highly respected in his or her particular country. However, you need to be able to identify when you are buying parallel imports and be aware of your rights when purchasing these products. The best way forward would be for mutual understanding and a healthy exchange of views between producers, consumers and other stakeholders to. After that, these goods has imported into second market without the permission of the owner or the original copy right holder.
Costs and benefits of preventing parallel imports into new. Therefore, there is a public safety risk with some parallel imports. After that, these goods has imported into second market without the. Labor defends import protection for australias book. Nov 26, 2015 publishers try to hold back the tide on parallel imports publishers, predictably, want to keep australia s restrictions on importing books as they are. A group of published economists has called on federal parliament to lift the ban on parallel imports of books. At this time of economic difficulty i hope the government rejects the report. The australian car market is going to have to adjust gear at full throttle in order to compete for your business under proposed changes by the turnbull government that will allow individuals to parallel import new cars from other countries from 2018, bypassing the current. The real strategic challenge is not the parallel importation of books, nor is it the amazon kindle which includes export restrictions and can only be sold in the us. As authors and economists, we call on parliament to finally lift the ban on parallel imports so that more australian books are read. Publishers try to hold back the tide on parallel imports publishers, predictably, want to keep australia s restrictions on importing books as they are. In 2017, australia was the thlargest national economy by nominal. Some economics of parallel imports and trade policy.