The Productivity Commission is now chewing over the initial submissions it received to its inquiry into the idea of allowing the parallel importation of foreign-originated books. This is what it’s faced with:
• the commission has received 268 submissions to its inquiry, of which around 260 oppose the idea;
• in a historic shift, most booksellers — the supposed beneficiaries of parallel imports — have dropped their support for the proposal: around 65 per cent of booksellers by market share now oppose the idea, including the Australian Booksellers Association and the Leading Edge group of independent booksellers;
• every publisher opposes the idea — from the largest multinational to the smallest independent — and many of them have submitted lengthy, detailed, and well-argued explanations for their stance;
• apart from universal rejections from authors and literary agents, even the Copyright Agency thinks it’s a very bad idea; and
• there are only two substantial submissions in favour of the idea: from the so-called Coalition for Cheaper Books, which is a front run by Dymocks, and includes the discount department stores; and from the Australian Consumer and Competition Commission, which argues for the ‘reform’ on economic-rationalistl first principles.
Nearly everybody who understands the industry is alarmed that the unilateral surrendering of territorial copyright would severely weaken Australian publishers and independent booksellers, damage the welfare of authors and Australia’s literary culture, and devastate ancillary activities and industries.
Even the handful of submissions in favour of the idea don’t attempt to argue on one of the main grounds for the inquiry being set up — that allowing parallel imports would increase the timeliness and availability of foreign-originated books in the Australian market. This is undoubtedly because they know that the current provisions have worked very well to make a wide range of overseas titles available promptly.
The sole economic argument is based on the belief that parallel imports would allow ‘cheaper books for everyone’. And yet even this isn’t true. At I’ve argued previously, at a $US–$Australian exchange rate $A0.67 to $US1.00, booksellers have to multiply US prices by an average of around 2.2 to arrive at an Australian recommended retail price inclusive of GST. This makes locally printed Australian editions of US-originated books cheaper than imports of the US edition. There are countless examples of this marketplace reality provided in various publishers’ submissions to the inquiry.
Under a parallel-import regime, this would not change. In fact, as one of the consequences would be the removal of competition in the local book-printing industry, the cost of manufacturing books — and hence of selling them — would go up. This doesn’t even take account of the consequences of larger chain booksellers forcing out independents: hardly anybody in the industry seriously thinks that this would result in lower book prices, or an increased range of titles.
As many submissions show, the argument to abandon territorial copyright in order to reduce the retail price of books is not sustainable. It is not supported by the facts on the ground and, ultimately, is hostage to foreign-currency exchange rates and the behaviour of booksellers. Of course, if the Australian dollar were to strengthen considerably against the US dollar, local prices would become higher. But this is not, to put it mildly, a sound basis for public policy, or for making such a major change to existing policy.
Some attempt is made by the ‘pro’ forces to argue that authors could prevent foreign remaindered or run-on editions of their books appearing in Australia by stipulating this in their contracts with overseas publishers. This is simply misguided: no contractual arrangements between authors and publishers could stop remainders being exported to Australia by third parties. To understand the author’s perspective on the subject in depth, I recommend Tim Winton’s magnificent submission.
The overwhelming body of evidence has demonstrated that allowing the parallel importation of books would cause massive damage for no appreciable gain. This is not what was meant to happen — the subject was originally referred to the Productivity Commission via the Council of Australian Governments by a newly minted Labor prime minister on the assumption that there’d be widespread support for change, and that the commission, a champion of economic rationalism, would deliver a saleable ‘reform’ to the government.
Instead, what was meant to be a lay-down misere has turned into a hospital hand-pass. The economy is now in terrible trouble, and Kevin Rudd has decided that neo-liberalism is a bad thing. The commission may still recommend the abandonment of territorial copyright, of course. But could the Rudd government embark on a draconian, neo-liberal course of action that the vast majority of experts are certain would endanger the industry and the culture? Watch this space.
PS: I urge interested readers to examine the various submissions on the commission’s website at www.pc.gov.au/projects/study/books/submissions. In particular, I recommend the submissions from Peter Carey and Tim Winton; the Australian Publishers Association (and individual houses such as Penguin, Random House, Text, Scribe, and Allen & Unwin, as well as the individual submission from A&U’s chairman, Patrick Gallagher); and the Leading Edge group of booksellers. Collectively, these are a magnificent set of presentations.