European Union Requests WTO Consultations on Turkish Rules Adversely Targeting Pharmaceuticals Produced Abroad
On 2 April 2019 the European Union submitted to the World Trade Organisation (“WTO”) in Geneva a request for consultations with Turkey. The consultations will cover the compatibility with WTO law of various measures of Turkish law that govern the production, importation and marketing of pharmaceuticals (see, attached EU request for WTO consultations with Turkey).
The European Union challenges four series of measures:
Turkey requires foreign producers to commit to producing specific pharmaceuticals in Turkey. Firms that do not comply will see the pharmaceutical products concerned excluded from reimbursement. Such a move would imperil their competitive position on the Turkish market.
Technology transfer requirement
As part of the localisation requirement, foreign producers may be required to transfer technology to producers based in Turkey.
Import prohibition on localised products
If the production of a given pharmaceutical has been localised in Turkey, the importation of that product from abroad is no longer permitted.
Even in specific cases where imported products are not ruled out for reimbursement, the administrative review of applications for measures such as reimbursement may be delayed compared to applications involving domestic products.
Other countries may join the European Union’s request. For example, in his 2019 National Trade Estimate Report on Foreign Trade Barriers which was published on 29 March 2019, the United States Trade Representative also questioned the link under Turkish law between the local production of pharmaceuticals and the reimbursement of these products (2019 NTE Report, at p. 489 and following).
If the consultations do not yield a satisfactory outcome from the European Union’s perspective, the European Union will be able to request the WTO to establish a panel to rule on the matter.