| Abstract: | Legal context. Free trade agreements seek to remove unjustifiedbarriers to trade. Normally barriers to trade are imposed bystates, such as quotas, tariffs, subsidies and regulatory restrictions.However, sometimes barriers will be imposed by private partiesseeking to prevent parallel trade (arbitrage) of their own products.The aim of this article is to examine the way in which freetrade agreements deal with private barriers to parallel tradeand thus to consider to what extent parallel trade is possiblewithin free trade areas. Key points. The article considers first the situation withinthe European Community, which has long supported parallel tradethrough its provisions on the free movement of goods and competitionlaw, before turning to the approach taken in the Community'sfree trade agreements with third countries. It carries out thesame exercise in relation to the United States and then considershow parallel trade is dealt with by the World Trade Organisation.Finally, as free trade agreements only seek to remove unjustifiedbarriers, it considers possible justifications for the differentapproaches before drawing some tentative conclusions. Practical significance. This article considers the impact whichthe overlap between intellectual property, competition law andtrade law has in relation to parallel trade. As well as reviewingthe current position, which will be of use to businesses andlegal practitioners on both sides of parallel trade, it assessesthe underlying justifications which are relevant to policy makingin this field. |
