- Country or region
- Türkiye
- Trade topics
- Dispute settlement
- Context
- WTO - Case launched by the EU
Summary of the case
- Complaint by: EU
- Complaint against: Turkey
- Third parties: Brazil, Canada, China, India, Indonesia, Japan, Russian Federation, Switzerland, Ukraine, United States
On 2 April 2019, the EU requested consultations with Turkey on certain measures concerning the production, importation and marketing of pharmaceutical products.
These measures concern:
- The localisation requirement. The Turkish authorities have adopted plans to achieve progressively the localisation in Turkey of the production of a substantial part of the pharmaceutical products consumed in Turkey. In order to achieve that objective, Turkey requires foreign producers to commit to localise in Turkey their production of certain pharmaceutical products. If such commitments are not given, are not accepted by Turkish authorities, or are not fulfilled, the pharmaceutical products concerned are excluded from the scheme for the reimbursement of the pharmaceutical products sold by pharmacies to patients operated by Turkey’s social security system (the “reimbursement scheme”). That scheme covers the vast majority of sales of pharmaceutical products by pharmacies to patients. Consequently, if an imported pharmaceutical product is excluded from the reimbursement scheme, its competitive opportunities in the Turkish market are significantly impaired, as compared with domestically produced like products. In order to comply with the above described localisation requirement (the “localisation requirement”), certain producers of pharmaceutical products commit to localise their production of certain pharmaceutical products in Turkey. In those cases where foreign producers do not give the required commitments to localise (or where their offered commitments are rejected, or are considered not to be fulfilled, by the Turkish authorities), the pharmaceutical products concerned are no longer reimbursed. The localisation requirement is designed to apply on an ongoing basis, or at least until the localisation objectives established by the Turkish government are achieved. The localisation requirement is periodically adapted, modified, updated or extended with respect to, inter alia, the products it applies to and/or the extent of localisation sought. The specific commitments to be implemented in order to comply with the localisation requirement are established for each foreign producer in a non-transparent manner and may differ from producer to producer.
- The import ban on localised products. Where the production of a pharmaceutical product has been localised in Turkey in accordance with the localisation requirement, applied in conjunction with the Turkish rules for approving the importation and marketing of pharmaceutical products, the importation of that pharmaceutical product is no longer permitted (“the import ban on localised products”).
- Prioritisation. Even in certain cases where imported products are not excluded from the reimbursement scheme by virtue of the localisation requirement, Turkey gives priority to the review of applications for inclusion of domestic pharmaceutical products in the list of products covered by the reimbursement scheme, as well as with respect to any pricing and licensing policies and processes, over the review of the applications of like imported products (the “prioritization measure”).
Consultations took place with Turkey on 9 and 10 May 2019 but failed to resolve the matter. On 2 August 2019, the European Union requested the establishment of a Panel. At its meeting on 30 September 2019, the DSB established a panel. On 4 March 2020, the European Union requested the Director-General of the WTO to determine the composition of the panel. On 17 March 2020, the Director-General accordingly composed the Panel.
Relevant WTO provision: - Articles III:4, X:1, and XI:1 of the General Agreement on Tariffs and Trade 1994 (GATT 1994); - Article 2.1 of the Agreement on Trade Related Investment Measures (TRIMs Agreement); - Article 3.1.(b) of the Agreement on Subsidies and Countervailing Measures (ASCM).
Status
- Consultations requested: 02 April 2019
- Panel requested: 02 August 2019
- Panel established: 30 September 2019
- Panel composed: 17 March 2020
- Notice of Appeal with panel report: 25 April 2022