Turkey–Pharmaceuticals: The First WTO Arbitration for Appellate Review

Abstract

On July 25, 2022, the World Trade Organization issued an arbitration award under Article 25 of the Dispute Settlement Understanding (DSU) on the appeal from the Panel Report in Turkey–Pharmaceuticals. This is the first use of DSU Article 25 arbitration for the review of a WTO panel decision. The successful completion of the arbitration demonstrates that this alternative dispute settlement method can be utilized to fulfill the function of WTO appellate review after the collapse of the Appellate Body. But how did the Arbitrators fare on the substantive legal issues in this case, which concerned a Member’s public health and industrial policies under WTO law? And more importantly, as a systemic matter, how does the appellate review via Article 25 arbitration compare to that by the Appellate Body? This essay provides a critique of the Arbitrators’ findings on the substantive legal issues, while assessing potential advantages of Article 25 appeal arbitration as a long-term solution for the reform of WTO dispute settlement.

Keywords: WTO reform, dispute settlement, DSU Article 25 arbitration, WTO appellate review, public health and WTO law, industrial policy, localization measure, Turkey

JEL Classification: K-33