The European Union has asked the World Trade Organization (WTO) to initiate dispute consultations with Turkey over requirements imposed by the country on pharmaceutical products.
In a request circulated to WTO members yesterday, April 10, the EU claimed that the measures at issue, which include technology transfer requirements, are inconsistent with the Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS).
The European Commission estimates that the value of pharmaceutical exports likely to be affected by these measures reaches €460 million and and, if further implemented, could potentially affect all EU exports to Turkey worth more than €2.5 billion.
Turkish authorities are planning to localise production of a substantial proportion of pharmaceutical products consumed in the country.
To achieve this, Turkey is requiring foreign producers to commit to localise in Turkey their production of certain pharmaceutical products, according to the complaint.
“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,” alleged the request.
The EU also claimed that the specific commitments for each producer are being established in a non-transparent manner and may differ from producer to producer.
As part of the localisation requirement (or closely connected to it), foreign producers may be required to transfer technology, including patent rights, to a producer established in Turkey.
However, this requirement doesn’t apply to Turkish producers of pharmaceutical products, according to the EU, which contravenes the TRIPS Agreement.
“These measures are a clear violation of Turkey’s WTO obligations to treat foreign companies on equal footing with domestic ones, and to protect IP of foreign companies, such as patents and business information, on its territory,”
said the European Commission in a release.
The request concluded:
“The various measures relating to pharmaceutical products identified in this request appear to nullify or impair the benefits accruing to the European Union directly or indirectly under the covered agreements.”
A request for consultations formally initiates a dispute in the WTO. After 60 days, if consultations have failed to resolve the dispute, the EU may request adjudication by a panel.