Copyright exhaustion is a fancy way of saying that after a copyrighted item is first sold the copyright owner no longer has the ability to control or benefit from its distribution. In America we refer to this as the first sale doctrine. Once you have bought a book (or been given it) you can give it away, resell it, burn it, use it to clean your windows — whatever you want, and the author has no say or stake in any of these activities. The physical object isn’t protected by copyright: it’s the content that is. The end of the transition period following Brexit seems to mean that the old international agreement on regulations around this topic will lapse, and the UK government has to change the rules.
Publishers (and no doubt other heavier IP hitters like pharmaceutical companies) fear that any change will lead to a loss of income if books or pills are bought more cheaply in Europe and reexported to the UK. Not sure I understand how the basis for this worry has anything directly to do with copyright, and I think that’s the main source of confusion surrounding this campaign. The real issue seems to be a change in the regulations governing reimportation of products which have been sold to a dealer in Europe. The concern seems to be that some sort of loophole will be left in the rules which will enable books sold at a bigger discount to overseas agents to come back into Britain undercutting the local edition. But surely there are no forces mandating that you have to sell your books at a greater discount to a European dealer than to a local one, so why do we have to be concerned about masses of such books turning up so that we cannot sell our own editions? If a copy is sold to a German dealer, at that point the author gets their royalty: if the book finds its way back into Britain and is resold the author isn’t due any royalty anyway, so what’s the concern from the authors point of view? Are we worrying about the US edition being imported at a lower price than the local UK version? (It is of course possible that an author will be earning a different royalty on the two editions.)
With an ebook the copyright situation is different in that when you “buy an ebook” you aren’t really buying anything. What you are actually doing is leasing access to a file on a computer: you can use the file, but you can’t sell it or even give it away your access to it. No first sale ever takes place in such a situation, so copyright is not exhausted. To my mind this feature of the ebook market (along with the internationalization of the book supply chain) throws into question the whole basis on which we have “always” allocated rights to different publishers around the world. World rights begin to look awkwardly anachronistic.
31 August, today, is the date on which the UK government’s consultation period comes to an end. Publishing Perspectives informs us that the Publishers Association has publicized its research which shows that “64 percent of publishers’ book revenue is estimated to be at risk if the government changes the current copyright laws. The Intellectual Property Office is currently consulting on a change to the UK intellectual property framework in which one of the proposed outcomes, called ‘international exhaustion,’ would, according to the association, ‘spell disaster for the UK’s publishing industry’.”
When Britain was part of the EU single market, a first sale within the European Economic Area was the point at which the copyright owner could no longer control onward distribution. Now Brexit has apparently necessitated a reconsideration of the rules. One can see how lax rule drafting might lead to a situation where cheap international editions of a book could be imported into the UK, undercutting the domestic edition. So of course your industry association needs to lobby the government to ensure that such stupidity doesn’t happen. Save our Books is the campaign vehicle they have (rather misleadingly) selected.

Far be it from me to suggest the PA is guilty of telling an untruth — particularly as I have to confess I don’t really understand the mechanics of the problem — but I do think arguments should be conducted in reasonable and honest terms. To suggest that 64% of publishers’ revenues will disappear because English books can be imported from Europe sounds so outlandish that it makes it easy for the opposition to dismiss the claim as obviously partisan. If it really is a serious risk that lax rule drafting might lead to losses for UK businesses, wouldn’t one imagine a Conservative government, however chaotic, being rather cautious about making such a change?
Copyright exhaustion is a deeply misleading term. It seems to imply that copyright in the work is exhausted, whereas it’s just the copyright payment in that one individual copy that’s been used up. If selling a copy of your book meant that it immediately went into the public domain we’d see lots more book renting (á la ebook). Here the US term is much better: first sale is unambiguous.