Parallel Imports and Unparallel Laws: Does the WTO Need to Harmonize the Parallel Import Law?

Abstract

Parallel imports, one of the most complex and confusing phenomena of international trade, are a natural consequence of the doctrine of exhaustion. There exists a considerable divergence among the scholars regarding the need for harmonization of the 'principle of exhaustion' and parallel import laws. In this paper, we critically examine the need for harmonization of parallel import laws by analysing the economic considerations and consumer welfare aspects of different systems of exhaustion of rights. We also present the available sparse empirical evidence pertaining to the same. Prima facie the arguments for a minimum international legal standard of exhaustion doctrine in the TRIPS Agreement appear convincing. However, there is a lack of corroborative empirical evidence. Therefore, this may not be an appropriate time for the WTO to move ahead on this contentious issue, especially when it is standing at crossroads on several other major issues.