Australia has been at the forefront of trade-related copyright reform having, after almost a decade of debate and controversy, amended the import provisions of the
Copyright Act 1968 to allow parallel imports of sound recordings. This thesis begins with an investigation of the economics of the music recording industry, encompassing the nature of demand and supply of sound recordings, profit
maximising price strategies for a multi-product firm, and an investigation into the market structure and international distribution of sound recordings. This is followed by an investigation of the economics of copyright with respect to sound recordings and the evolution of international intellectual property rights law. This leads to a critical evaluation of the controversy surrounding the exhaustion of copyright and the case for copyright owner control over parallel imports.