Political Economy of the U.S. Parallel Trade Experience: Toward a More Thoughtful Policy
INTELLECTUAL PROPERTY: TRADE, COMPETITION AND SUSTAINABLE DEVELOPMENT, pp. 177-188, T. Cottier, P. Mavroidis and M. Pannizon, eds., Univ. Michigan Press, World Trade Forum Series Nr. 3, 2001
11 Pages Posted: 31 Jan 2012
Date Written: May 1, 2000
For the past decade, the Office of the United States Trade Representative (“USTR”), more recently in conjunction with the U.S. Department of State (“State”), has aggressively pursued a trade policy condemning (and threatening) foreign governments that open their markets to parallel trade. There is a material disconnection between the trade policy that USTR (and State) pursue abroad, and the law applicable to parallel trade within the United States. There is, moreover, a divergence in policy advocated by the U.S. Department of the Treasury, which historically has favored parallel trade, and the policy pursued by USTR and State.
There are a number of features of this policy disconnection that are troubling. First, USTR adopted and has pursued its policy without any in-depth study of the parallel trade phenomenon. The only apparent explanation for the policy adopted in the absence of analysis is industry pressure. Second, the U.S. Supreme Court has already rebuked USTR for suggesting that it could seek to determine domestic parallel trade policy by forcing small developing countries to capitulate to its terms. Third, as a practical matter it is doubtful whether there is an internal legal mechanism by which a U.S. citizen might compel USTR to change its external parallel trade policy by initiating a court action — although the U.S. Congress may certainly dictate a change in policy.
The objective of this article is to concisely explain the law of the United States governing parallel trade in respect to the fields of trademark, copyright and patent, as well as to take note of certain recent developments on the political side suggesting that USTR may be facing increasing pressure to modify its combative stance. It suggests that USTR (and State) should back away from their current positions until an adequate public dialogue and analysis of the complex implications of parallel trade policy on matters such as world public health and the maintenance of competitive markets has taken place.
Keywords: Parallel imports, trade, intellectual property, USTR
JEL Classification: K33, O34
Suggested Citation: Suggested Citation