Turkey will initiate arbitration proceedings with the European Union over a pharmaceutical dispute at the World Trade Organization (WTO), it said in a statement on Thursday.

He signaled his intention to use a rare alternative to the global body’s regular dispute settlement process to appeal the outcome of the dispute with the EU.

In a 147-page statement sent to WTO members, Turkey announced its intention to use a rare method of appeal known as Article 25 and disclosed for the first time the panel’s findings. the WTO in the dispute with the EU.

On the main measure, Turkey’s so-called “localization requirement”, the panel rejected Ankara’s arguments and recommended that it bring its measures on pharmaceuticals into line with global trade rules.

Brussels took the case against Ankara to the WTO in 2019, challenging measures it said forced foreign pharmaceutical producers at the time to shift production to Turkey.

However, since then, the Supreme Appeals Chamber of the WTO has ceased to function due to a policy by the administration of former US President Donald Trump to block the appointment of new judges, prompting Turkey to announce Thursday its intention to use a rare alternative to the ordinary dispute. process.

“Turkey hereby notifies the Dispute Settlement Body of its decision to initiate arbitration under Article 25…,” it said in the statement. Such procedures have only been used once before – by the EU and the US – in the body’s 27-year existence, according to the WTO’s website.

“This may be an example that many other WTO members will follow in the future. This is truly the start of a new era at the WTO,” said a spokesperson for the EU mission to the WTO.

“We will definitely see more of these ad hoc appeal arrangements,” said Alan Yanovich, a partner at Akin Gump in Geneva who advises governments and companies on WTO disputes. “This is a positive development for the system.”

The paralysis of the WTO Appellate Body since December 2019 means that cases are currently being appealed in a vacuum, leaving them in legal limbo. The EU has helped set up an alternative dispute settlement system outside the WTO, but it has not yet taken up any cases and Turkey is not a member of the system.

A WTO document showed three arbitrators would be selected in the EU-Turkey dispute and tasked with delivering a decision within 90 days of the appeal.

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