Journal Article

Parallel trade and free trade agreements

Christopher Stothers

in Journal of Intellectual Property Law & Practice

Volume 1, issue 9, pages 578-592
Published in print August 2006 | ISSN: 1747-1532
Published online July 2006 | e-ISSN: 1747-1540 | DOI: http://dx.doi.org/10.1093/jiplp/jpl096
Parallel trade and free trade agreements

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Legal context. Free trade agreements seek to remove unjustified barriers to trade. Normally barriers to trade are imposed by states, such as quotas, tariffs, subsidies and regulatory restrictions. However, sometimes barriers will be imposed by private parties seeking to prevent parallel trade (arbitrage) of their own products. The aim of this article is to examine the way in which free trade agreements deal with private barriers to parallel trade and thus to consider to what extent parallel trade is possible within free trade areas.

Key points. The article considers first the situation within the European Community, which has long supported parallel trade through its provisions on the free movement of goods and competition law, before turning to the approach taken in the Community's free trade agreements with third countries. It carries out the same exercise in relation to the United States and then considers how parallel trade is dealt with by the World Trade Organisation. Finally, as free trade agreements only seek to remove unjustified barriers, it considers possible justifications for the different approaches before drawing some tentative conclusions.

Practical significance. This article considers the impact which the overlap between intellectual property, competition law and trade law has in relation to parallel trade. As well as reviewing the current position, which will be of use to businesses and legal practitioners on both sides of parallel trade, it assesses the underlying justifications which are relevant to policy making in this field.

Journal Article.  10084 words. 

Subjects: Arbitration ; Intellectual Property Law

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