WTO Arbitrators Say Turkey's Pharmaceutical Localization Measure Not in Line With WTO Rules

Arbitrators at the World Trade Organization affirmed a WTO dispute panel ruling in a case brought by the EU over certain measures by Turkey concerning the production, importation and marketing of pharmaceutical products. The arbitrators said that Turkey should bring their measures into conformity with WTO obligations. In particular, the arbitrators confirmed the panel's ruling which said that Turkey's localization measure discriminates against foreign pharmaceutical products since it is not a form of government procurement and is not meant to achieve public health objectives nor compliance with laws requiring Turkey to ensure effective and accessible sustainable healthcare for its citizens.

The EU celebrated the decision. "Today's verdict is a clear win for the EU, because all claims were decided in the EU's favour," EU Trade Commissioner Valdis Dombrovskis said. "This is not only of economic importance for EU companies, but it also sends a strong signal discouraging other countries from continuing or pursuing similar discriminatory forced localisation policies, which are incompatible with WTO rules."

The ruling is the first appeal arbitration award under the WTO Dispute Settlement Understanding, and it's the first WTO appellate ruling in over two years given that the Appellate Body has been kneecapped due to the U.S.'s refusal to seat members. The three arbitrators were appointed by the EU and Turkey, leading to the ad hoc agreement between the two parties. The EU aid that the significance of the arbitration procedures "goes far beyond the specific case."