tag:theconversation.com,2011:/us/topics/parallel-imports-22913/articlesParallel imports – The Conversation2023-01-19T01:21:35Ztag:theconversation.com,2011:article/1976142023-01-19T01:21:35Z2023-01-19T01:21:35ZLet buyers jump the queue for electric cars by importing them directly<figure><img src="https://images.theconversation.com/files/504609/original/file-20230116-18-i5v4ml.jpg?ixlib=rb-1.1.0&rect=408%2C8%2C4580%2C3051&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">
</span> <span class="attribution"><span class="source">Shutterstock</span></span></figcaption></figure><p>If Australia is to decarbonise our energy system by 2050, we need to start the transition to electric vehicles very soon. Cars sold in the 2030s will mostly still be on the road in 2050, so we have to make sure most of them are electric. But electric cars (including plug-in hybrids) currently account for only <a href="https://www.carexpert.com.au/car-news/australias-top-selling-evs-in-2022">3.5% of new car sales</a> in Australia. </p>
<p>The world leader is Norway, where <a href="https://insideevs.com/news/629068/norway-electric-car-sales-december2022/">87.6% of new cars</a> (including 4.8% plug-in hybrids) are electric. Australia’s figure is also far lower than in Europe (<a href="https://insideevs.com/news/629798/europe-plugin-car-sales-november2022/">27.7%</a>, including 10.4% plug-in hybrids), China (<a href="https://www.msn.com/en-sg/news/other/china-plug-in-car-sales-increased-by-50percent-in-november-2022/ar-AA15Tqiz">35%</a>, 25% fully electric) or even the United States (7.1%, <a href="https://thehill.com/policy/technology/3802179-us-electric-vehicle-sales-surge-in-2022-gain-on-tesla/">5.8%</a> fully electric).</p>
<p>However, even in Norway the proportion of cars on the road that are electric – although impressive compared to the rest of the world – is still <a href="https://insideevs.com/news/628846/norway-fifth-car-fleet-electric/">only 20%</a>. This difference reflects the time it takes to replace an existing fleet of internal combustion engine cars.</p>
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Read more:
<a href="https://theconversation.com/australia-is-failing-on-electric-vehicles-california-shows-its-possible-to-pick-up-the-pace-189871">Australia is failing on electric vehicles. California shows it's possible to pick up the pace</a>
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<h2>Why are sales so low in Australia?</h2>
<p>Why has Australia done so badly? The overt hostility of the previous government to electric vehicles can’t have helped. Prime Minister Scott Morrison even claimed Labor wanted to “abolish the weekend” with its electric vehicle policy. </p>
<p>But the Morrison government has been gone for the better part of a year now and electric vehicle sales, while growing, remain very low.</p>
<p>The two core issues faced by Australians wanting to buy electric vehicles are affordability and lack of availability. Despite some recent <a href="https://www.drive.com.au/news/tesla-prices-australia-model-3-model-y/">modest price reductions</a>, Teslas are priced out of reach of most private car buyers. They also face long delivery delays. Would-be buyers of many other brands face similar problems. </p>
<p>Australian governments have done little, if anything, to encourage the transition to electric vehicles. Almost uniquely among developed countries, Australia has neither a carbon price nor vehicle fuel-efficiency standards. </p>
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Read more:
<a href="https://theconversation.com/why-electric-vehicles-wont-be-enough-to-rein-in-transport-emissions-any-time-soon-195722">Why electric vehicles won't be enough to rein in transport emissions any time soon</a>
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<p>The Victorian state government even <a href="https://www.vicroads.vic.gov.au/registration/registration-fees/zlev-road-user-charge#What-is-a-ZLEV">taxes electric and hybrid vehicles</a> for their road use. South Australia had a similar tax, but has <a href="https://www.legislation.sa.gov.au/lz?path=/b/current/motor%20vehicles%20(electric%20vehicle%20levy)%20amendment%20repeal%20bill%202022">abolished it</a>.</p>
<p>There have been a few positive measures, mostly at the state level. Although the federal government has legislated an exemption from fringe benefits tax, it offers <a href="https://thedriven.io/2022/08/01/why-labors-new-tax-cut-on-electric-vehicles-wont-help-you-buy-one-anytime-soon/">no direct benefit to individual car buyers</a>. The government’s <a href="https://consult.dcceew.gov.au/national-electric-vehicle-strategy">development of a national EV strategy</a> may lead to other initiatives. </p>
<p>But incentives don’t make much difference if it is impossible to buy a vehicle. Until recently, delivery delays could be explained as part of general COVID-related disruptions and restrictions introduced to control the pandemic. </p>
<p>But those restrictions are mostly gone now, and remaining supply disruptions haven’t stopped millions of <a href="https://insideevs.com/news/629798/europe-plugin-car-sales-november2022/">European</a> and <a href="https://www.msn.com/en-sg/news/other/china-plug-in-car-sales-increased-by-50percent-in-november-2022/ar-AA15Tqiz">Chinese</a> buyers from getting behind the wheel.</p>
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Read more:
<a href="https://theconversation.com/new-electric-cars-for-under-45-000-theyre-finally-coming-to-australia-but-the-battle-isnt-over-191854">New electric cars for under $45,000? They're finally coming to Australia – but the battle isn't over</a>
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<h2>Industry’s structure is a barrier</h2>
<p>A critical problem is that the Australian retail motor industry has a structure designed for the 20th century, when a small number of locally made cars, powered by internal combustion engines, dominated the roads. Retailers, typically franchisees for one of the major manufacturers, provided not only a distribution channel, but highly profitable after-sales service.</p>
<p>With the end of Australian manufacturing, this no longer makes a lot of sense. The requirement to buy through an authorised dealer, like other systems of this kind, allows overseas producers to raise car prices for Australian consumers, with few offsetting benefits. They can also supply the market with fuel-inefficient models.</p>
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Read more:
<a href="https://theconversation.com/whos-holding-back-electric-cars-in-australia-weve-long-known-the-answer-and-its-time-to-clear-the-road-188443">Who's holding back electric cars in Australia? We've long known the answer – and it's time to clear the road</a>
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<p>The problem is even worse for electric vehicles. Compared to vehicles with internal combustion engines, electric vehicles have many fewer moving parts and <a href="https://www.whichcar.com.au/advice/ev-servicing-costs-explained">much less need for costly servicing</a>. </p>
<p>The most important component, the battery, has an estimated life of up to 20 years. There’s no transmission, spark plugs, timing belt or air filter to worry about. Profits on all of these items enable car dealers to reduce the sticker price on fossil-fuelled vehicles, making them much easier to sell. </p>
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<h2>Parallel importing is part of the solution</h2>
<p>One step towards solving this problem would be to allow consumers to import new and used cars from overseas suppliers. This is known as “parallel importing”. </p>
<p>Consumers have already seen the benefits of parallel importing for items including books, music and a wide variety of consumer goods. In some cases, such as that of books, parallel importing can be done only by individual consumers; in others it is open to firms that wish to compete with existing distribution channels.</p>
<p>Australia is far behind the rest of the world in the transition from fossil-fuelled vehicles. To avoid falling further behind, we need to change the kinds of vehicles we import. </p>
<p>A fuel-efficiency standard would discourage the dirtiest of our current vehicles. While increasing the upfront sale price, it would save drivers money in the long run. </p>
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Read more:
<a href="https://theconversation.com/a-rapid-shift-to-electric-vehicles-can-save-24-000-lives-and-leave-us-148bn-better-off-over-the-next-2-decades-190243">A rapid shift to electric vehicles can save 24,000 lives and leave us $148bn better off over the next 2 decades</a>
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<p>Parallel importing would increase competition in the market for new and used electric vehicles overnight. Manufacturers would have to reconsider their supply and pricing strategies for Australia. </p>
<p>Allowing independent importation would also promote the development of a skilled workforce to service the cars. It could even allow the development of local manufacturing of electric vehicle components.</p><img src="https://counter.theconversation.com/content/197614/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>John Quiggin is a former Member of the Climate Change Authority</span></em></p><p class="fine-print"><em><span>Flavio Menezes does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>Known as parallel importing, importing goods directly from overseas suppliers lowers costs and increases supply, which is what Australia’s electric vehicle market needs to catch up with the world.John Quiggin, Professor, School of Economics, The University of QueenslandFlavio Menezes, Professor of Economics, Director of the Australian Institute for Business and Economics, The University of QueenslandLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/707082016-12-21T04:45:08Z2016-12-21T04:45:08ZProductivity Commission re-ignites copyright wars by recommending ‘fair use’<figure><img src="https://images.theconversation.com/files/151194/original/image-20161221-14185-1hnnk4g.jpeg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">They're still often more expensive overseas than in Australia.</span> <span class="attribution"><span class="source">HelMet-kirjasto/Flickr</span>, <a class="license" href="http://creativecommons.org/licenses/by/4.0/">CC BY</a></span></figcaption></figure><p>The Australian Government has <a href="http://www.smh.com.au/federal-politics/political-news/intellectual-property-copyright-rules-make-us-break-the-law-80-times-a-day-says-productivity-commission-20161220-gtf6i0.html">just released</a> the Productivity Commission’s <a href="http://www.pc.gov.au/inquiries/completed/intellectual-property#report">report into Australia’s Intellectual Property Arrangements</a>.</p>
<p>It’s a move that appears to have been designed to avoid some of the controversy of the copyright wars by releasing the report just before most Australians settle into their summer break.</p>
<p>The report does something that is very difficult in copyright debates: it sets out a rigorous, evidence-based case for reform. <a href="https://www.qut.edu.au/news/news?news-id=112876">Academics have praised</a> the “independent and systematic study that has assessed the effectiveness, efficiency, adaptability and accountability of Australia’s IP [intellectual property] laws”. </p>
<p>Good evidence about how well intellectual property laws are working is sometimes hard to come by. <a href="https://theconversation.com/au/topics/intellectual-property-1149">Intellectual property</a> laws, including <a href="https://theconversation.com/au/topics/copyright-1766">copyright</a> and <a href="https://theconversation.com/au/topics/patents-5861">patent</a> law, have to be very carefully calibrated. If they are too weak, it is difficult for investors to recoup their expenses in bringing new inventions, books, music and films to the market. </p>
<p>But when intellectual property laws are too strong, they restrict innovation and access to knowledge. They prevent people from making new inventions and creating new works, because access to existing materials becomes too expensive or difficult. </p>
<p>For consumers, they can make access to knowledge and culture much more expensive, and they can <a href="https://www.universitiesaustralia.edu.au/Media-and-Events/submissions-and-reports/Productivity-Commission-s-Draft-Report-on-Intellectual-Property-Arrangements/Productivity-Commission-s-Draft-Report#.WFnmGVN97Gg">get in the way of education</a> and <a href="https://www.alrc.gov.au/publications/16-access-people-disability/introduction">the legitimate needs of disadvantaged members of society</a>.</p>
<p>Scholars have pointed out for many years that the optimal balance between protection and access to knowledge is <a href="https://papers.ssrn.com/sol3/papers.cfm?abstract_id=2024588">extremely difficult to pinpoint</a>. As a result, intellectual property policy is a <a href="https://global.oup.com/academic/product/moral-panics-and-the-copyright-wars-9780195385649?cc=au&lang=en&">deeply controversial</a> and emotional political arena. In the past, decisions about IP policy have been made on the basis of <a href="http://repository.law.umich.edu/books/1/">heavy corporate lobbying</a>, <a href="https://eprints.qut.edu.au/85010/">gut-instinct, hunch and guesswork</a>. </p>
<p>The Productivity Commission’s report is important because it reviews the available evidence and provides recommendations that we have good reason to think will improve Australia’s intellectual property laws. </p>
<p>After reviewing the evidence, the Productivity Commission’s view is that copyright law is not balanced, and that our laws:</p>
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<p>[…] are skewed too far in favour of copyright owners to the detriment of consumers and intermediate users.</p>
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<h2>Making Australian copyright law ‘fair’</h2>
<p>Probably the most significant – and controversial – recommendation is that Australia should introduce a “<a href="http://fairuse.stanford.edu/overview/fair-use/what-is-fair-use/">fair use</a>” exception for copyright infringement. </p>
<p>Fair use allows people to use copyright material in ways that are fair, without asking for permission first. It has been extremely important in the United States for many different industries. </p>
<p>Filmmakers <a href="http://cmsimpact.org/code/documentary-filmmakers-statement-of-best-practices-in-fair-use/">use it to make documentaries</a>, libraries use it to <a href="http://lj.libraryjournal.com/2015/10/copyright/u-s-appeals-court-rules-google-book-scanning-is-fair-use/#_">digitise and preserve their collections</a>, scholars use it for important data- and text-mining research, and search engines use it to index the web.</p>
<p>The Productivity Commission’s report is just the latest in a <a href="http://www.austlii.edu.au/au/other/clrc/4.html">string</a> of <a href="http://www.alrc.gov.au/publications/copyright-report-122">reports</a> to recommend that Australia introduce a fair use exception. It found that Australia’s current exceptions to copyright:</p>
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<p>[…] are too narrow and prescriptive, do not reflect the way people today consume and use content, and do not readily accommodate new legitimate uses of copyright material.</p>
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<span class="caption">Balancing intellectual property laws is a thrilling challenge.</span>
<span class="attribution"><span class="source">J Mark Bertrand/Flickr</span>, <a class="license" href="http://creativecommons.org/licenses/by-nc-nd/4.0/">CC BY-NC-ND</a></span>
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<h2>Other recommendations</h2>
<p>The report is detailed and comprehensive, and covers a lot of ground. The Productivity Commission recommended a raft of other changes to modernise Australia’s copyright laws, including:</p>
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<li><p>preventing copyright owners from overriding consumer rights through restrictive contractual agreements</p></li>
<li><p>allowing Australian consumers to break digital locks on content that prevent lawful activities (like <a href="https://www.wired.com/2015/04/dmca-ownership-john-deere/">fixing a tractor</a>)</p></li>
<li><p><a href="https://www.youtube.com/watch?v=XnvXIuqpiwk">fixing a decade-long oversight</a> in our “safe harbour” regime that makes it extremely difficult for home-grown equivalents of YouTube or social media platforms to host content in Australia</p></li>
<li><p>clarify the law to ensure Australian consumers can <a href="http://www.techly.com.au/2014/01/30/using-vpn-access-blocked-content-illegal/">use VPNs to access content lawfully available in other countries</a></p></li>
<li><p>ensure that the results of publicly funded research are made freely available to the public under <a href="https://theconversation.com/free-for-all-arc-funded-research-now-open-to-the-public-11497">Open Access policies</a></p></li>
<li><p>remove an exception from competition law that allows software and content companies to create exclusive deals and other restrictive licensing agreements that would otherwise be anti-competitive.</p></li>
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<h2>Restarting the copyright wars</h2>
<p>The timing of this report seems to be designed to minimise some of the controversy that it will generate. The commission’s report warns that it will be extremely difficult to “pursue change in the face of strong vested interests”.</p>
<p>The <a href="http://copyright.com.au/2016/12/productivity-commissions-recommendations-attack-australian-creators/">Copyright Agency</a>, the Australasian Performing Right Association and the Australasian Mechanical Copyright Owners Society (<a href="http://apraamcos.com.au/news/2016/december/the-productivity-commission-has-lost-its-way-on-ip-policy/">APRA AMCOS</a>), <a href="http://prwire.com.au/pr/64931/book-industry-calls-on-government-to-write-off-productivity-commission-report">prominent players in the book industry</a> and several authors have all issued statements that are highly critical of the commission’s report. </p>
<p>Their essential concern is that the expansion of user rights will result in reductions in revenues and investment in Australian creative industries and Australian creators.</p>
<p>The great difficulty here is that copyright law is extremely complex, and the debate is so emotive that the details often get lost in the heated arguments. What little empirical evidence we do have to guide policy is glossed over in a strong reaction against change.</p>
<p>The reaction of the established copyright industries is understandable. It has been very difficult for publishers and distributors to adapt to the internet, and they are only now beginning to develop business models that work in the digital age. The process has been painful to say the least.</p>
<p>In this context, many publishers, distributors, and creators feel besieged by efforts to reform copyright law for the digital age. But it is too late now to go back to a pre-digital world. </p>
<p>The restrictions on <a href="https://theconversation.com/au/topics/parallel-imports-22913">parallel importation</a>, which have kept prices high for books in Australia, are a good example of laws that just don’t work for digital markets. If we expect consumers to obey copyright rules, it is clear that we need to work to make sure that the law and business models <a href="https://theconversation.com/the-only-way-to-fix-copyright-is-to-make-it-fair-23402">treat them fairly</a>.</p>
<p>The great shame about the copyright wars is that sensible, evidence-based proposals for reform get mixed up with highly emotive reactions to “piracy”. The proposals by the Productivity Commission are careful and well justified. The evidence we have is that they are not likely to harm the actual revenues of Australian creators. </p>
<p>There is no doubt that we need new business models – and <a href="https://theconversation.com/why-cash-and-copyright-are-bad-news-for-creativity-34696">public funding</a> – to <a href="https://theconversation.com/harpers-competition-review-is-good-news-for-netflix-consumers-32092">support creators in the digital age</a>. This is the hard work of real practical change that needs to happen to enable our creative industries to thrive. </p>
<p>The good news is that overseas examples show that it is possible for creators to make money in the digital economy. The Productivity Commission’s recommendations are <a href="https://theconversation.com/why-australians-should-back-turnbull-in-the-stoush-over-copyright-30198">a bet that digital is the future</a>, and that making Australia’s laws more efficient and effective is critical to the health of our future industries. </p>
<p>We’re looking forward to the government’s plans to implement these recommendations, but it looks like 2017 will be a heated year for copyright debates.</p><img src="https://counter.theconversation.com/content/70708/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Nicolas Suzor is the recipient of an Australian Research Council DECRA Fellowship (project number DE160101542) and receives other project funding from the ARC. He also leads projects funded by industry groups, including the Australian Communications Consumer Action Network (ACCAN) and the Australian Digital Alliance. Nic is also the Legal Lead of the Creative Commons Australia project and the deputy chair of Digital Rights Watch, an Australian non-profit organisation whose mission is to ensure that Australian citizens are equipped, empowered and enabled to uphold their digital rights.
</span></em></p><p class="fine-print"><em><span>Shereen Parvez does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>The copyright wars are set to continue, with the government releasing a Productivity Commission report arguing for a relaxation of intellectual property laws.Nicolas Suzor, Associate professor, Queensland University of TechnologyShereen Parvez, Graduate Research Fellow, Intellectual Property & Innovation Law Research Program, Queensland University of TechnologyLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/689112016-11-20T19:04:16Z2016-11-20T19:04:16ZWhen it comes to books and copyright, the government should leave things as they are<figure><img src="https://images.theconversation.com/files/146477/original/image-20161117-19348-do1gs8.png?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">
</span> <span class="attribution"><a class="source" href="https://www.flickr.com/photos/pustovit/24139911466/">Vladimir Pustovit/Flickr</a>, <a class="license" href="http://creativecommons.org/licenses/by-sa/4.0/">CC BY-SA</a></span></figcaption></figure><p>The Australian book industry is in a state of <a href="http://www.abc.net.au/news/2015-11-30/publishers-disappointed-by-support-to-lift-import-restrictions/6987476">considerable agitation</a> as it waits to see if the federal government will scrap the parallel import restrictions of the Copyright Act. </p>
<p>Lifting the restrictions has been recommended by the Harper Committee and the Productivity Commission, and a decision could come next week, next month, or never. </p>
<p>These regulations restrict the importation of commercial quantities of books without the permission of the copyright holder. There is a strong sense of déjà vu in the current situation. Every few years since the 1980s a recommendation for repeal of these import restrictions has been put to the government of the day and every time the government, whether Coalition or Labor, has rejected it.</p>
<p>The arguments for doing away with them are based on simple economics. The restrictions provide some protection for authors and publishers in the face of international competition. The overall effect is to raise, at least temporarily, the price of books to Australian consumers, though the directly attributable cost increase is uncertain. </p>
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<p><em>Keep reading: <a href="https://theconversation.com/parallel-importation-and-australian-book-publishing-here-we-go-again-51249">Parallel importation and Australian book publishing: here we go again</a></em></p>
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<p>Nevertheless, any form of protection is anathema to economists as it distorts markets, creates inefficiencies in the allocation of our national resources, and restricts the access of consumers to cheaper supplies of products from abroad.</p>
<h2>The cultural exception</h2>
<p>So should books be treated differently from anything else? Books are a cultural product, and can be defined as such for the purposes of international trade. Ever since the structure of the world trading system was set up in the 1940s with the establishment of the <a href="https://www.britannica.com/topic/General-Agreement-on-Tariffs-and-Trade">General Agreement on Tariffs and Trade</a>, the forerunner of the present-day World Trade Organisation, a special case for cultural goods and services has been recognised: the so-called “cultural exception”.</p>
<p>The principle behind this concept is the proposition that cultural products are not just commercial merchandise, but embody cultural values that are separate from and additional to their economic value. These cultural values, it is argued, can be shown to be important to society, especially when they represent something about the national culture from which they are derived.</p>
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<p><em>Keep reading: <a href="https://theconversation.com/friday-essay-thriving-societies-produce-great-books-can-australia-keep-up-54473">Friday essay: thriving societies produce great books – can Australia keep up?</a></em></p>
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<p>So the argument concerning <a href="https://www.theguardian.com/books/2016/may/20/authors-condemn-book-copyright-and-import-proposal-as-massive-own-goal">Australian books, written by Australian authors about Australian subjects and published by Australian publishers</a> is that they convey such values. Hence, in the context of international trade they should be granted a cultural exception and should not be subject to the same free-trade ideology as other commodities in the global marketplace.</p>
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<a href="https://images.theconversation.com/files/146472/original/image-20161117-19371-ga68f.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="" src="https://images.theconversation.com/files/146472/original/image-20161117-19371-ga68f.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=237&fit=clip" srcset="https://images.theconversation.com/files/146472/original/image-20161117-19371-ga68f.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=716&fit=crop&dpr=1 600w, https://images.theconversation.com/files/146472/original/image-20161117-19371-ga68f.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=716&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/146472/original/image-20161117-19371-ga68f.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=716&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/146472/original/image-20161117-19371-ga68f.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=899&fit=crop&dpr=1 754w, https://images.theconversation.com/files/146472/original/image-20161117-19371-ga68f.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=899&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/146472/original/image-20161117-19371-ga68f.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=899&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
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<span class="attribution"><span class="source">Tarek Mostafa/Reuters</span></span>
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<p>Some hardline economists – including in the Productivity Commission – acknowledge the significance of Australian books to our culture. They’re willing to accept a role for the public sector in ensuring that the cultural contribution of the book industry is maintained, provided that the community agrees that such a role is worth paying for.</p>
<p>The argument here is that if Australian books generate a sufficient level of public-good benefit through their contribution to our collective cultural life – a contribution that cannot be purchased overseas, by the way – this may constitute a case of market failure. Government intervention to correct for it may be justified if the benefits from intervention outweigh the costs.</p>
<p>So far so good, you might think. But it is one thing to agree that some level of support for an industry is justified – and quite another to determine how such support might be provided. </p>
<p>Economists are likely to argue that instead of the blunt instrument of parallel import restrictions, whose beneficiaries may well include many of the “wrong” people, <a href="https://theconversation.com/lets-allow-parallel-book-imports-and-subsidise-australian-publishing-52497">direct fiscal support would be more appropriate</a> because it can be targeted at those who generate the public benefit, such as Australian authors.</p>
<h2>Protection through fiscal channels?</h2>
<p>If we accept this line of argument, and if the existence of public-good benefits from the Australian book industry is assumed, it can be argued that the best policy action in the present circumstances would be to remove the import restrictions, and replace them with an equivalent level of protection provided through fiscal channels, for example by increasing the levels of financial support provided to writers and publishers of Australian books.</p>
<p>Such a recommendation may have merit in principle, but in the realpolitik of the Australian government today it simply doesn’t stand up. Federal funding for the arts and culture sector has been under considerable pressure in recent years. Even more pointedly, the government last year signalled its attitude to supporting the book industry by abolishing the newly-established Book Council before it had even held its first meeting. </p>
<hr>
<p><em>Keep reading: <a href="https://theconversation.com/short-shelf-life-the-book-council-of-australia-is-stuffed-back-on-the-rack-52382">Short shelf life: the Book Council of Australia is stuffed back on the rack</a></em></p>
<hr>
<p>The possibility that the Government would approve a new budget allocation of any significance to compensate authors or publishers following removal of the import restrictions must be regarded as very remote indeed.</p>
<p>Some commentators have argued that import restrictions are a relatively minor issue, particularly when set against other more far-reaching copyright proposals such as the <a href="http://bookscreateaustralia.com.au/wp-content/themes/books-create2/images/BooksCreate_Literature.pdf">possible introduction of US-style fair dealing</a> – a prospect that would have much more <a href="https://theconversation.com/its-time-to-future-proof-australias-copyright-laws-for-the-21st-century-58785">serious implications</a> for the book industry. Nevertheless the recommendation is there, and needs a response.</p>
<p>What to do? To avoid a confrontation with an entire industry and to demonstrate a concern for the health of Australian cultural life, the government could either abolish parallel import restrictions and provide compensatory support for the production, distribution and consumption of Australian books, or it could leave things as they are.</p>
<p>As we have noted, successive Australian governments have in previous years accepted the latter as the appropriate practical and principled strategy. In its own interests, the present government would be well advised to do the same.</p><img src="https://counter.theconversation.com/content/68911/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>David Throsby was Chair of the Book Industry Collaborative Council (2012-13) and is currently holder of an Australian Research Council Discovery Grant (DP 140101479) for a project entitled "The Australian Book Industry: Authors, Publishers and Readers in a Time of Change". </span></em></p>If the government decides to remove regional trade protections on the book industry, it should compensate Australian authors. But given how unlikely new funding would be, the best option – for everyone – is to leave well enough alone.David Throsby, Distinguished Professor of Economics, Macquarie UniversityLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/524972015-12-17T06:41:00Z2015-12-17T06:41:00ZLet’s allow parallel book imports, and subsidise Australian publishing<figure><img src="https://images.theconversation.com/files/106439/original/image-20151217-10308-1lus21.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">Parallel import restrictions are bad for Australian consumers, and not the best way to support Australian books. </span> <span class="attribution"><span class="source">wiredforlego/flickr.com</span></span></figcaption></figure><p>It’s hard to imagine that too many economists in Australia will receive Christmas cards from book publishers this year. A long <a href="https://www.accc.gov.au/speech/parallel-importing">campaign of lobbying</a>, culminating with the <a href="http://competitionpolicyreview.gov.au/">recent Harper review</a> into competition policy, has resulted in the Commonwealth government deciding to <a href="https://theconversation.com/parallel-importation-and-australian-book-publishing-here-we-go-again-51249">remove restrictions on the parallel importation of books</a>. </p>
<p>To most economists this is a long-overdue reform that will increase efficiency. A group of ten prominent Australian economists <a href="http://www.smh.com.au/federal-politics/political-news/book-imports-economists-call-for-lifting-of-restrictions-20151216-gloy9k.html">today signed an open letter</a> calling on the federal parliament to follow through on lifting the restrictions. </p>
<p>To Australian book publishers, and <a href="http://www.smh.com.au/federal-politics/political-news/author-richard-flanagan-blasts-malcolm-turnbull-for-ideological-vandalism-on-books-industry-20151125-gl7nh6.html">some noteworthy authors</a>, it is an act of public vandalism, threatening the future viability of their industry.</p>
<p>As an economist who loves reading books, I’ve always taken a keen interest in the debate over parallel import restrictions. And I’ve always thought that there was a fairly straightforward solution – which I am going to describe and argue for in this article.</p>
<h2>Why Australian book publishing needs support</h2>
<p>It is easy to make the argument that books by Australian authors make a big contribution to our lives. By having an Australian outlook or content, they don’t just provide entertainment or learning, they do it in a way that has a particular interest and relevance to us.</p>
<p>But just because something is good doesn’t mean it needs government support. An economist starts from the position that if a product is good, plenty of people will buy it, which gives an appropriate return to its supplier. Only if the market is failing to deliver a return to the supplier that reflects the full benefit to society from the product, do economists believe that the government might need to intervene.</p>
<p>In the case of Australian books, I believe that such an argument does exist. Here I give two reasons why the market may not get it right – and why government support may therefore be needed.</p>
<p>First, the knowledge about Australian public affairs that is contained in books, and the expertise that authors develop by writing those books, allows for a more informed and productive public discourse on government policy making. This is not a benefit that anyone pays for when they buy a book – but it is a benefit to Australian society all the same. </p>
<p>In my own area of economics, recent books by <a href="http://www.rossgarnaut.com.au/AustralianEconomy.html">Ross Garnaut</a> and <a href="http://www.lowyinstitute.org/people/dr-john-edwards">John Edwards</a> on the coming decade in the Australian economy, and historical perspectives by <a href="http://press.princeton.edu/titles/9897.html">Ian McLean</a> and <a href="http://www.goodreads.com/book/show/26030282-australia-s-second-chance">George Megalogenis</a>, have all been important source materials for debate on what policy makers should be doing.</p>
<p>Second, much of our thinking about Australian identity and values is formed through the perspectives and stories that are expressed in books – whether it be novels or history or biography. </p>
<p>There is no single book that does this. Rather, it is the putting together of the whole of what is being written about and by Australians that enables us to do this thinking. This is a collective benefit from having an Australian book industry – and as such will always be undervalued in the market.</p>
<h2>Why parallel import restrictions should be removed</h2>
<p>Parallel import restrictions provide the original publisher of a book with the exclusive right to bring that book into Australia for commercial purposes. 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. </p>
<p>The result is that (due to the smaller scale of market and our high average income level) publishers charge higher prices for books in Australia than in most other countries. This addition to book prices in Australia is a cost borne by book buyers. Publishers argue it is a <a href="https://theconversation.com/cover-story-why-are-books-so-expensive-in-australia-27928">necessary cost</a> to ensure there is a strong local publishing industry.</p>
<p>But there is a problem with this argument. The parallel import restrictions mean that we pay more for every book we buy, not just Australian titles. Suppose that 20% of the volume of book sales in Australia is by Australian authors. </p>
<p>This implies that (roughly speaking) for every A$200 extra we pay in prices for books that goes to Australian authors and their publishers, we are also providing A$800 extra to international authors. </p>
<p>In other words, parallel import restrictions are poorly targeted, and hence an expensive way for Australian consumers to support the local publishing industry.</p>
<h2>A better policy</h2>
<p>If our objective is to give extra funding to Australian authors and their publishers, why not do this via subsidies or direct payments to them? With such a policy it would be possible to provide the same level of support to the Australian book industry as it receives from parallel import restrictions, but without supporting international authors and their publishers.</p>
<p>Of course, subsidies and payments to the book industry already happen through bodies such as the <a href="http://www.australiacouncil.gov.au/">Australian Council</a>. What I am suggesting is that there should be an increase in the extent of this funding of the book industry to compensate for the removal of parallel import restrictions. </p>
<p>It should be possible to work out the current value that the Australian book industry derives from the import restrictions, and when the restrictions are removed, to increase the amount of funding to the industry by that amount. </p>
<p>That would leave the Australian book industry just as well off as before the removal of parallel import restrictions, and Australian book buyers would be better off as a result of lower prices.</p>
<h2>Heading in the wrong direction</h2>
<p>The Commonwealth government has announced that it will implement the <a href="https://theconversation.com/harper-response-is-good-economics-and-smart-politics-51191">Harper committee recommendation</a> to remove parallel import restrictions for books. Unfortunately, at the same time, it is removing funding to the Australian book industry. </p>
<p>Instead of increasing funding to compensate for the removal of parallel import restrictions, this week another round of cuts (including the <a href="https://theconversation.com/short-shelf-life-the-book-council-of-australia-is-stuffed-back-on-the-rack-52382">abolition of the Book Council of Australia</a>) was announced. </p>
<p>There can be no doubt of the outcome from this policy mix. Removing import restrictions together with decreasing government funding will unambiguously reduce the size of the Australian book industry; and with that we will lose the many associated benefits to Australian society.</p><img src="https://counter.theconversation.com/content/52497/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Jeff Borland does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>The uniquely Australian literary voice is worth protecting, but parallel importation restrictions are not the way to do it. Rather, we should lift those restrictions – and subsidise Australian booksellers directly.Jeff Borland, Professor of Economics, The University of MelbourneLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/515852015-12-02T04:02:12Z2015-12-02T04:02:12ZRead it and weep: the book trade needs more than parallel import restrictions<figure><img src="https://images.theconversation.com/files/103993/original/image-20151202-14458-1x27pjh.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">The issue of parallel imports will not go away – but there are other options to explore. </span> <span class="attribution"><span class="source">Mustafa Sayed</span></span></figcaption></figure><p>The Australian book trade has a long history of tension between books produced at home and books imported from overseas. But our contemporary age may be the first in which parallel importation is undertaken not by booksellers in competition with each other, but by individual consumers in competition with local booksellers.</p>
<p>Known in the trade as PIRs, parallel importation restrictions are a feature of Australia’s Copyright Act and can be summed up as two rules:</p>
<p>1) For a title where no Australian published version exists, any overseas editions may be imported. </p>
<p>2) Once an Australian edition is available for purchase, booksellers are barred from importing overseas copies, unless the title becomes unavailable in Australia for more than three months. </p>
<p>The simple ability to import overseas books into Australia by downloading purchased titles via Amazon’s “fast, free” global cellular network or ordering online via Book Depository has had many effects. </p>
<p>It has not just removed the need to visit physical bookstores; it has also undermined the economic benefits and protection that formerly accrued to Australian publishers, printers and booksellers through the general legal prohibition on the parallel importation of books into Australia by members of the local book trade.</p>
<h2>Closing the market</h2>
<p>Parallel importation occurs when a product protected by intellectual property rights is imported into Australia after an authorised locally-published version has already been made available for sale in Australia. </p>
<p>As a form of border protection for companies operating in the Australian market, the Australian edition of a book can mean a version of a title which has been solely manufactured in Australia by the owner of the copyright in the work. It can also be an edition by someone who is permitted to manufacture it in Australia under an exclusive licensed arrangement. </p>
<p>It can mean overseas published editions of the work which are allowed into Australia with regards to a contractual arrangement about who is authorised to import, sell and distribute copies locally. Importantly, it can also be about who is not allowed to sell copies. </p>
<p>Restrictions on parallel importation provides protection for the publication of books in Australia by local firms and protection for overseas publishers who wish to maintain a “closed market” in Australia for their editions of titles only. </p>
<p>This prevents local Australian booksellers from sourcing cheaper editions of these same titles from alternative overseas sources. It stops booksellers from obtaining stronger local sales by passing the savings to the reader or from obtaining stronger profits by not passing on the savings. </p>
<figure class="align-left ">
<img alt="" src="https://images.theconversation.com/files/103984/original/image-20151202-14444-ujjhl.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=237&fit=clip" srcset="https://images.theconversation.com/files/103984/original/image-20151202-14444-ujjhl.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=900&fit=crop&dpr=1 600w, https://images.theconversation.com/files/103984/original/image-20151202-14444-ujjhl.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=900&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/103984/original/image-20151202-14444-ujjhl.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=900&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/103984/original/image-20151202-14444-ujjhl.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=1131&fit=crop&dpr=1 754w, https://images.theconversation.com/files/103984/original/image-20151202-14444-ujjhl.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=1131&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/103984/original/image-20151202-14444-ujjhl.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=1131&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
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<span class="attribution"><span class="source">Shane Lin</span></span>
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</figure>
<p>For booksellers, “closing the market” is seen to restrain competition at the wholesale level by limiting the choice of suppliers for physical books to authorised channels only. </p>
<p>For the consumer, the lack of access to cheaper imports in the local market places little pressure on local retailers to reconsider book prices.</p>
<p>Each major technological advance in copying and distributing text has historically been viewed as a potential threat to the economic equilibrium existing between publishers, printers, distributors and booksellers. </p>
<p>But in the current climate the new technology has also allowed readers to develop new purchasing behaviours with respect to digital and overseas sources of books.</p>
<p>In 2009, the government considered removing copyright restrictions on the parallel importation of books under the view that their continuance increased local book prices. While Australia’s literary communities were responding to the <a href="http://www.pc.gov.au/inquiries/completed/books">Productivity Commission’s 2009 inquiry</a> into this, readers could already parallel import cheaper books into Australia by way of their internet browser or Kindle. </p>
<p>Australian parallel importation laws certainly protected the local book trade from potentially anti-competitive practices by other bricks-and-mortar businesses. Critically, it did not protect them from the practices of several hundred thousand individual readers. </p>
<p>The <a href="http://www.industry.gov.au/industry/IndustrySectors/booksandprinting/BookIndustryStrategyGroup/Documents/PwCCovertoCover.pdf">combined volume</a> of eBook purchases in Australia in the year following the Productivity Commission’s Inquiry was around 3.4 million sales valued at A$35 million.</p>
<p>At the close of the inquiry in 2009, the government stepped back from altering the nation’s regulatory framework. The protections seemed less and less important to individual consumer’s book buying behaviour. It <a href="http://www.booksandpublishing.com.au/articles/2009/11/10/13924/parallel-importation-decision-no-change-to-current-legislation/">released a statement</a> that acknowledged the key issues while also distancing itself from the Australian book trade as a future source of support. </p>
<h2>A recurring debate</h2>
<p>The issue of parallel imports will not go away. It has been a regular point of debate since the first Australian book trade inquiries at the start of the 20th century. Then, as now, the issue was that the price advantage accorded to imported texts worked against the sale of Australian manufactured books, which seemed unreasonably expensive in comparison. </p>
<p>The added pressure today is that the book trade is now competing with its customers.</p>
<p>In 2013, Amazon’s vice president of Kindle Content, David Nagger, <a href="http://www.justice.gov/atr/cases/apple/exhibits/px-0837.pdf">acknowledged</a> that the company’s early success in the US digital book market could be credited to a business model that set it apart from all previous e-reader experiments. Unlike other devices which could only display content that had to be manually loaded onto them using a computer, with the Kindle you were always “holding a bookstore in your hand”. </p>
<p>The Kindle bookstore was always available through the company’s own “whispernet” data network, regardless of whether you had access to another internet connection.</p>
<p>Where competitors had failed to gain mainstream consumer interest with various devices, such as the Apple Newton (1993) through to the Sony PRS-505 (2007), Amazon recognised that:</p>
<blockquote>
<p>the e-book market would rise or fall with consumers’ ability to get the books they wanted, at an attractive price, and with all the convenience they had come to expect from their increasingly powerful mobile devices. </p>
</blockquote>
<p>For David Nagger, Amazon wanted to sell books during those stretches of personal time at home or on the train that were unreachable by the physical book trade. Being able to at any time tap into Amazon’s digital bookstore, which launched with more than 88,000 titles including 100 of the 112 New York Times bestsellers for November 2007, was considered by many commentators of the time to be the Kindle’s single most revolutionary component. You could “think of a book, and have it in less than 60 seconds”. </p>
<h2>Strengthen exports</h2>
<p>Conveniences like this have transformed the book trade. It will be important therefore not to rehearse past arguments in the current debate. From embargoes to tariffs, in order to create a book culture that is both native and international it would be useful to set aside these kinds of protectionist ideas. </p>
<p>We might instead consider strengthening an export market for Australian books. As British publisher Walter Harrup put it in 1945, in the Sydney Morning Herald:</p>
<blockquote>
<p>what Australia needs more than the sale of Australian books in Australia is the sale of Australian books in other parts of the world. What is the good of a country having something to say to the world and yet being unable to communicate those ideas to the world?</p>
</blockquote>
<p>It was a comment that implied the many ways in which the business of home and imported books were interconnected. Members of the Australian book trade in the early 20th century certainly seemed prepared to discuss how to restructure book imports and exports to greater local commercial advantage. </p>
<p>The question remains whether that is still the case today.</p>
<p><br>
<em>Would you like to write on the PIR debate? Contact the <a href="mailto:paul.dalgarno@theconversation.edu.au">Arts + Culture editor</a></em>.</p><img src="https://counter.theconversation.com/content/51585/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Jason Ensor receives funding from the Australian Research Council. He is affiliated with the Australasian Association for Digital Humanities, the Alliance of Digital Humanities Organisations, DHCommons (CenterNet), and the Society for the History of Authorship, Reading and Publishing. He works for Western Sydney University. </span></em></p>Our contemporary age may be the first in which parallel importation is undertaken not by booksellers in competition with each other, but by individual consumers in competition with local booksellers.Jason Ensor, Research and Technical Development Manager, Digital Humanities, Western Sydney UniversityLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/512492015-11-25T03:40:30Z2015-11-25T03:40:30ZParallel importation and Australian book publishing: here we go again<figure><img src="https://images.theconversation.com/files/103128/original/image-20151125-18257-1wnk8aa.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">Publishers need to stop indulging in apocalyptic fantasies of doom and destruction.</span> <span class="attribution"><span class="source">Kevin O'Mara</span></span></figcaption></figure><p>You may have seen news, or read commentary on Twitter and Facebook, about the likely repeal of “parallel importation restrictions” and what that means for publishers, writers and readers in Australia. My own view is that we are in for a fight and that the repeal is far from guaranteed – more’s the pity. </p>
<p>For those who don’t know, parallel importation restrictions (PIRs) are part of our <a href="http://www.austlii.edu.au/au/legis/cth/consol_act/ca1968133/">Copyright Act</a> and prohibit importing by booksellers for resale where an Australian publisher who has acquired exclusive rights and publishes the title within 30 days of original overseas publication. The bookseller can import an overseas edition from then on, but only if the book is unavailable from the local publisher for longer than 90 days.</p>
<p>The <a href="http://competitionpolicyreview.gov.au/final-report/">Final Report</a> of the <a href="http://competitionpolicyreview.gov.au/">Competition Policy Review</a> led by Professor Ian Harper was released in April this year. Its draft report last year had recommended the abolition of all the remaining PIRs, including those in the Copyright Act applying to books. </p>
<p>The government <a href="http://www.smh.com.au/federal-politics/political-news/turnbull-government-responds-to-harper-review-into-competition-laws-accepts-majority-of-recommendations-20151124-gl6fh9.html">yesterday announced</a> it had accepted that recommendation, subject to a review by the Productivity Commission (PC) into Australia’s intellectual property regime generally, and particularly any recommendations it may have regarding transitional arrangements.</p>
<p>In a lengthy discussion about parallel importation generally, and what previous reviews have recommended over the years, and after assessing all the submissions on the issue from publishers and others, Harper’s conclusion was this:</p>
<blockquote>
<p>On the basis that the PC [Productivity Commission] has already reviewed parallel import restrictions on books […] and concluded that removing such restrictions would be in the public interest, the Australian Government should, within six months of accepting the recommendation, announce that [..] parallel import restrictions on books will be repealed.</p>
</blockquote>
<h2>An old story</h2>
<p>Harper’s reference to the hated PC and particularly its analysis of book prices in Australia compared to the US and the UK once again inflamed the local debate, but it’s a debate that’s by now tiresome in the extreme. The PC looked at industry practices in 2008/9, a long time ago in this internet age.</p>
<p>Harper seems unaware that things have changed rather dramatically in pricing and importation practices since then. In response to a surge in online ordering by consumers from Amazon and The Book Depository given the strong Australian dollar, publishers finally reacted and the high markups on imported titles have been virtually eliminated. (I wrote in detail about this on The Conversation <a href="https://theconversation.com/cover-story-why-are-books-so-expensive-in-australia-27928">last year</a>.) </p>
<p>The real question today is: should we be at all bothered about this issue any more? The Australian Booksellers Association <a href="http://www.afr.com/business/retail/parallel-imports-miss-point-say-book-retailers-20140924-jg1ku">thinks not</a>. It’s completely moved on. It considers other competition issues, such as GST on low value imports and high Australian postal rates, far more significant.</p>
<p>Even the <a href="http://competitionpolicyreview.gov.au/files/2014/12/APA.pdf">Australian Publishers Association submission</a> (APA) considers the PIRs today “low impact”. Their removal would provide “no benefits to consumers”. </p>
<figure class="align-center zoomable">
<a href="https://images.theconversation.com/files/103123/original/image-20151125-18261-11fi18f.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="" src="https://images.theconversation.com/files/103123/original/image-20151125-18261-11fi18f.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/103123/original/image-20151125-18261-11fi18f.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=350&fit=crop&dpr=1 600w, https://images.theconversation.com/files/103123/original/image-20151125-18261-11fi18f.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=350&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/103123/original/image-20151125-18261-11fi18f.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=350&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/103123/original/image-20151125-18261-11fi18f.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=439&fit=crop&dpr=1 754w, https://images.theconversation.com/files/103123/original/image-20151125-18261-11fi18f.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=439&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/103123/original/image-20151125-18261-11fi18f.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=439&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
<figcaption>
<span class="caption"></span>
<span class="attribution"><span class="source">Nathan O'Nions</span></span>
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</figure>
<p>My view is we definitely should be bothered. The PIRs should finally be abolished, buried and cremated so they don’t rise like zombies in a quite different future. Many individual publishers operating in the Australian market are adamant they play a vital role and need to be retained.</p>
<p>Their basic argument is this: the PIRs construct Australia as a separate rights territory, and this reality is absolutely critical in enabling the purchase of Australian rights to overseas titles and the sale of rights to original locally published titles into export markets. </p>
<p>The PIRs grant exclusivity both ways, and therefore rights trading can be done with full confidence. </p>
<p>The problem with this argument has always been its profound conceptual confusion. The PIRs don’t make Australia a rights territory at all (referred to as “territorial copyright”). All they do is disallow importation for commercial purposes by booksellers. </p>
<h2>Buying around</h2>
<p>The territorial rights are granted by contract with an overseas agent or publisher, and it makes sense to buy separate Australian rights because our population size is big enough to support local printings; our borderless, distant continent inhibits “buying around” by booksellers; and our mature book trade infrastructure (distributors, retailers, freight systems, publicity channels, etc.) facilitates immediate availability and sales. </p>
<p>Protection and exclusivity can be guaranteed commercially, in other words. An arcane importation provision shoved into our Copyright Act 100 years ago under pressure from panicky British publishers is not at all necessary, and for decades now, in its anti-consumer bias, has done way more harm than good. </p>
<p>Publishers should have been forced to gain protection by operational excellence, not by a trade protectionist law guaranteeing over-pricing and under-servicing.</p>
<p>The PIRs have always protected the weak and uncompetitive publishers, and hence disadvantaged those who wanted to play the game fairly and professionally and with a sure customer focus.</p>
<p>But surely, publishers argue, without the PIRs booksellers will be free to import cheaper overseas editions, or even remainders, thus severely undercutting local rights holders. How can that not do enormous damage to local publishing and authors and eventually readers? </p>
<figure class="align-center zoomable">
<a href="https://images.theconversation.com/files/103122/original/image-20151125-18261-rm88tv.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="" src="https://images.theconversation.com/files/103122/original/image-20151125-18261-rm88tv.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/103122/original/image-20151125-18261-rm88tv.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=400&fit=crop&dpr=1 600w, https://images.theconversation.com/files/103122/original/image-20151125-18261-rm88tv.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=400&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/103122/original/image-20151125-18261-rm88tv.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=400&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/103122/original/image-20151125-18261-rm88tv.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=503&fit=crop&dpr=1 754w, https://images.theconversation.com/files/103122/original/image-20151125-18261-rm88tv.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=503&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/103122/original/image-20151125-18261-rm88tv.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=503&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
<figcaption>
<span class="caption"></span>
<span class="attribution"><span class="source">Pimthida</span></span>
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</figure>
<p>Publishers can quite easily make buying around an unprofitable thing for a bookseller to indulge in. They need to watch their pricing far more actively than they’ve been in the habit of doing. Maintaining a high Australian RRP when a standard US edition is significantly cheaper is no longer viable. </p>
<p>Individual consumers are already able to buy direct via Amazon, and retailers should also be able to exploit opportunities to compete if the local supplier remains unresponsive to overseas prices and exchange rate fluctuations. Retailers have to do everything they can to attract that consumer into their stores. </p>
<p>But they also have to pay freight, absorb currency losses and can’t return overstocks, so importation is never going to be the usual method of supply unless the local offer is simply not competitive.</p>
<p>Under the current regime the “policing” of local retailers, chastising them and threatening them with possible litigation is no way to build and maintain their loyalty. Australian booksellers universally want to support local publishers and the thriving literary and cultural scene on which their livelihood depends.</p>
<p>Unresponsive pricing and stocking, and miserable trading terms, are the culprits, not the retailers who are simply trying to offer a fair deal to their customers.</p>
<figure class="align-left zoomable">
<a href="https://images.theconversation.com/files/103130/original/image-20151125-18255-1eo7fdj.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="" src="https://images.theconversation.com/files/103130/original/image-20151125-18255-1eo7fdj.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=237&fit=clip" srcset="https://images.theconversation.com/files/103130/original/image-20151125-18255-1eo7fdj.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=903&fit=crop&dpr=1 600w, https://images.theconversation.com/files/103130/original/image-20151125-18255-1eo7fdj.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=903&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/103130/original/image-20151125-18255-1eo7fdj.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=903&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/103130/original/image-20151125-18255-1eo7fdj.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=1135&fit=crop&dpr=1 754w, https://images.theconversation.com/files/103130/original/image-20151125-18255-1eo7fdj.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=1135&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/103130/original/image-20151125-18255-1eo7fdj.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=1135&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
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<span class="caption"></span>
<span class="attribution"><span class="source">Peter Miller</span></span>
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</figure>
<p>The natural protection available to responsive publishers will more than guarantee that their local edition will dominate the market. There will inevitably be leakage at times, but it will be minimal in impact. </p>
<p>Publishers need to stop indulging in apocalyptic fantasies of doom and destruction. They are the common argot of industry associations across the board who feel threatened by increased competition, and they do the industry no good at all in terms of public image. </p>
<p>Expressions such as “a radical instrument of cultural engineering” have no empirical basis whatsoever and are simply absurd.</p>
<p>They are also illogical. The APA, for example, proclaims that there will be minimal advantage to consumers from abolishing the PIRs, yet such reform will cause Australian publishing to suffer immense damage. Both can’t be true. </p>
<p>As for the claim that foreign publishers will likely “take over” the Australian territory absent the PIRs (because, you know, no Australian Territorial Copyright!) by demanding Australia be deemed a non-exclusive territory in rights contracts so the foreign edition can compete, I doubt there’s a more insulting interpretation of how a PIR-absent market would work. </p>
<p>Rather than cower toward ignorant UK or US publishers and their insistence on non-exclusivity, Australian publishers will need to muscle up and clearly explain the facts of the Australian market to their colleagues.</p>
<p>In truth, it would surprise me if we see the abolition of these outmoded, unwarranted and completely unnecessary PIRs any time in the near or even distant future, despite Scott Morrison’s embracing of that idea yesterday.</p>
<p>The political battle is still to come and remember that the author community, egged on by their publishers, will vigorously engage as they have on every previous occasion. Authors are the most articulate and powerful lobby group in the country – beloved public figures with ready access to every media platform.</p>
<p>It’s once again going to be ugly, and that’s a real shame.</p>
<p><br>
<em>An earlier version of this article appeared on Peter Donoughue’s blog <a href="http://peterdonoughue.blogspot.com.au/2015/04/australian-publishers-reactions-to.html">Pub Date Critical</a></em>.</p><img src="https://counter.theconversation.com/content/51249/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Peter Donoughue does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>The Australian government yesterday announced it intends to repeal parallel importation restrictions on books, which has again caused concern in the publishing industry. But, really, what’s the problem?Peter Donoughue, Sessional lecturer in the Master of Communication , The University of MelbourneLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/511942015-11-25T00:11:54Z2015-11-25T00:11:54ZCheaper books are on the way, but IP policy still favours big business<figure><img src="https://images.theconversation.com/files/103089/original/image-20151124-18230-nncuaw.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">It's never made sense that Australians pay more for books that those in the US.</span> <span class="attribution"><span class="source">Image sourced from Shutterstock.com</span></span></figcaption></figure><p>Cheaper content, but not just yet. That’s the message in the federal government’s <a href="http://www.treasury.gov.au/PublicationsAndMedia/Publications/2015/CPR-response">response</a> to the parallel import recommendations by the Harper Review on competition policy.</p>
<p>Australians have long sought quick and cheap access to intellectual property, particularly copyright works such as books and recordings, by importing that content from legitimate sources located overseas. Copyright law has a territorial basis, potentially restricting cross-border movement of commercial quantities of books, videos, sound recordings, computer software, maps and other works. Licensing regimes give copyright owners exclusive rights in a particular territory such as Australia. </p>
<p>One result, highlighted by the Productivity Commission, <a href="http://www.aph.gov.au/Parliamentary_Business/Committees/House_of_Representatives_committees?url=ic/itpricing/index.htm">Parliament</a> and scholars such as <a href="https://theconversation.com/clash-of-the-titans-apple-adobe-and-microsoft-under-fire-at-it-pricing-inquiry-12878">Matthew Rimmer</a>, is that copyright owners in the northern hemisphere have been able to charge Australian consumers a premium on products for sale in their own jurisdictions. Think of it as a form of copyright colonialism – the Australian student, mum, dad or academic pays 50% more than their counterparts in the USA. The premium isn’t justified by the cost of shipping the paper and plastic from Los Angeles and London, or from distribution centres in Singapore and Hong Kong.</p>
<p><a href="http://www.ipaustralia.gov.au/understanding-intellectual-property/ip-for-business/doing-business-overseas/ip-and-importing/">Australian law</a> currently allows consumers to import “non-commercial” (i.e. personal) copies of books and other content from overseas. The law however restricts importation by retailers. That typically benefits copyright owners and their licensees rather than consumers. That restriction is anti-competitive. It has accordingly been criticised by the <a href="http://www.pc.gov.au">Productivity Commission</a> over the past two decades. It is axiomatic that timely and cheap access to content is a social good, irrespective of whether it’s a Justin Bieber clip or the latest tract from Giorgio Agamben. </p>
<p>In conducting a “root & branch” review of competition policy the Harper Committee <a href="https://theconversation.com/harper-makes-case-for-competition-overhaul-experts-react-39582">recommended</a> removal of the parallel import restrictions. By implication, retailers could source legitimate stock of books and other material overseas (i.e. not from pirates) and sell the products in Australia. The expectation is that supply would often be <a href="https://theconversation.com/cover-story-why-are-books-so-expensive-in-australia-27928">quicker and cheaper</a> than current arrangements. Licensees would have an incentive to get their version of the product into the shops rather than delaying or engaging in egregious rent-seeking.</p>
<p>The Harper recommendations have been <a href="http://www.theguardian.com/books/australia-books-blog/2015/apr/07/removing-import-restrictions-would-impact-australian-authors-say-publishers">criticised</a> by some publishers and authors, typically because changes will affect the profitability of local publishers (either overseas owned or relying on licensed sales of overseas material to fund local creators). </p>
<h2>The bigger picture</h2>
<p>The recommendations sit alongside ongoing structural change to Australian markets for content, with for example accessing software online and uptake of video services such as <a href="https://theconversation.com/netflix-arrival-will-be-a-tipping-point-for-tv-in-australia-38386">Netflix</a> that operate on a global basis.</p>
<p>In responding to Harper the government has indicated it will remove the parallel import restrictions on books … but not just yet. </p>
<p>Removal will be “progressed” once the Productivity Commission’s <a href="https://theconversation.com/hockeys-ip-inquiry-another-opportunity-likely-to-be-missed-46266">inquiry</a> into intellectual property is completed and there has been “consultation with the sector on transitional arrangements”. The Commission’s report is due in mid 2016, with action presumably taking place after a general election and potentially accompanied by industry support funding to local publishers. </p>
<p>Overseas car makers and Australian suppliers, pending the imminent demise of Australian production, have been comforted by retention of restrictions on parallel imports of second-hand cars.</p>
<p>The response needs to be read in context, with the government rejecting Harper’s recommendation for a “separate independent review” of “processes for establishing negotiating mandates” to incorporate intellectual property provisions in international trade agreements. </p>
<p>In other words, the government is relying on unsubstantiated claims that there are “robust arrangements in place to ensure appropriate levels of transparency” in agreements such as the <a href="https://theconversation.com/five-things-you-need-to-know-about-the-trans-pacific-partnership-48653">TransPacific Partnership Agreement</a> that favour overseas “<a href="http://www.abc.net.au/news/2015-10-06/rimmer-tpp-favours-old-ip-industries/6830884">old industries</a>”. </p>
<p>The claims are deeply problematic. ALP and Coalition ministers have strongly resisted <a href="http://itsourfuture.org.nz/nz-governments-tppa-secrecy-put-to-the-test/">disclosure</a> of information about those agreements. The Productivity Commission has condemned the “black box” approach to negotiation. There are perceptions that Foreign Affairs reads “best outcome” as announcement of a deal rather than lower cost to consumers/taxpayers through a tougher stance on patents, trademarks and copyright.</p>
<p>The parallel import reforms <strong>are</strong> a good thing for consumers and the overall economy. We need however to move to a more progressive IP regime, one where the temper is democratic and bias is Australian rather than privileging Unilever, Microsoft, Disney and Pfizer. The government’s other responses to Harper’s intellectual property recommendations are weak. That might be through lack of understanding or unwillingness to provoke key stakeholders such as Foxtel. </p>
<p>While cheering the prospect of cheaper books, let’s ask some hard questions about incentives for innovation in key sectors such as <a href="https://theconversation.com/patent-applications-are-down-in-australia-thanks-to-tougher-rules-41424">biotechnology</a> and <a href="https://theconversation.com/patent-wars-on-the-pacific-rim-starring-apple-and-samsung-16951">software</a>. Are our policy-settings appropriate as we move into a borderless world where people consume bits rather than atoms?</p>
<hr>
<p><em>Bruce will be on hand for an Author Q&A between 10 and 11am AEST on Thursday, November 26, 2015. Post your questions in the comments section below.</em></p><img src="https://counter.theconversation.com/content/51194/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Bruce Baer Arnold does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>The government has agreed to the Harper competition review recommendation on parallel imports on books, but there’s still a long way to go on IP reform.Bruce Baer Arnold, Assistant Professor, School of Law, University of CanberraLicensed as Creative Commons – attribution, no derivatives.