Republic of the Philippines
SUPREME COURT
Manila
SUPREME COURT
Manila
EN BANC
WIGBERTO E. TAÑADA and ANNA DOMINIQUE COSETENG, as members of the Philippine Senate and as taxpayers; GREGORIO ANDOLANA and JOKER ARROYO as members of the House of Representatives and as taxpayers; NICANOR P. PERLAS and HORACIO R. MORALES, both as taxpayers; CIVIL LIBERTIES UNION, NATIONAL ECONOMIC PROTECTIONISM ASSOCIATION, CENTER FOR ALTERNATIVE DEVELOPMENT INITIATIVES, LIKAS-KAYANG KAUNLARAN FOUNDATION, INC., PHILIPPINE RURAL RECONSTRUCTION MOVEMENT, DEMOKRATIKONG KILUSAN NG MAGBUBUKID NG PILIPINAS, INC., and PHILIPPINE PEASANT INSTITUTE, in representation of various taxpayers and as non-governmental organizations, petitioners,
vs.
EDGARDO ANGARA, ALBERTO ROMULO, LETICIA RAMOS-SHAHANI, HEHERSON ALVAREZ, AGAPITO AQUINO, RODOLFO BIAZON, NEPTALI GONZALES, ERNESTO HERRERA, JOSE LINA, GLORIA. MACAPAGAL-ARROYO, ORLANDO MERCADO, BLAS OPLE, JOHN OSMEÑA, SANTANINA RASUL, RAMON REVILLA, RAUL ROCO, FRANCISCO TATAD and FREDDIE WEBB, in their respective capacities as members of the Philippine Senate who concurred in the ratification by the President of the Philippines of the Agreement Establishing the World Trade Organization; SALVADOR ENRIQUEZ, in his capacity as Secretary of Budget and Management; CARIDAD VALDEHUESA, in her capacity as National Treasurer; RIZALINO NAVARRO, in his capacity as Secretary of Trade and Industry; ROBERTO SEBASTIAN, in his capacity as Secretary of Agriculture; ROBERTO DE OCAMPO, in his capacity as Secretary of Finance; ROBERTO ROMULO, in his capacity as Secretary of Foreign Affairs; and TEOFISTO T. GUINGONA, in his capacity as Executive Secretary, respondents.
PANGANIBAN, J.:
The
emergence on January 1, 1995 of the World Trade Organization, abetted
by the membership thereto of the vast majority of countries has
revolutionized international business and economic relations amongst
states. It has irreversibly propelled the world towards trade
liberalization and economic globalization. Liberalization,
globalization, deregulation and privatization, the third-millennium buzz
words, are ushering in a new borderless world of business by sweeping
away as mere historical relics the heretofore traditional modes of
promoting and protecting national economies like tariffs, export
subsidies, import quotas, quantitative restrictions, tax exemptions and
currency controls. Finding market niches and becoming the best in
specific industries in a market-driven and export-oriented global
scenario are replacing age-old "beggar-thy-neighbor" policies that
unilaterally protect weak and inefficient domestic producers of goods
and services. In the words of Peter Drucker, the well-known management
guru, "Increased participation in the world economy has become the key
to domestic economic growth and prosperity."
Brief Historical Background
To hasten worldwide recovery from the devastation
wrought by the Second World War, plans for the establishment of three
multilateral institutions — inspired by that grand political body, the
United Nations — were discussed at Dumbarton Oaks and Bretton Woods. The first
was the World Bank (WB) which was to address the rehabilitation and
reconstruction of war-ravaged and later developing countries; the second, the International Monetary Fund (IMF) which was to deal with currency problems; and the third,
the International Trade Organization (ITO), which was to foster order
and predictability in world trade and to minimize unilateral
protectionist policies that invite challenge, even retaliation, from
other states. However, for a variety of reasons, including its
non-ratification by the United States, the ITO, unlike the IMF and WB,
never took off. What remained was only GATT — the General Agreement on
Tariffs and Trade. GATT was a collection of treaties governing access to
the economies of treaty adherents with no institutionalized body
administering the agreements or dependable system of dispute settlement.
After half a
century and several dizzying rounds of negotiations, principally the
Kennedy Round, the Tokyo Round and the Uruguay Round, the world finally
gave birth to that administering body — the World Trade Organization —
with the signing of the "Final Act" in Marrakesh, Morocco and the
ratification of the WTO Agreement by its members. 1
Like
many other developing countries, the Philippines joined WTO as a
founding member with the goal, as articulated by President Fidel V.
Ramos in two letters to the Senate (infra), of improving
"Philippine access to foreign markets, especially its major trading
partners, through the reduction of tariffs on its exports, particularly
agricultural and industrial products." The President also saw in the WTO
the opening of "new opportunities for the services sector . . . , (the
reduction of) costs and uncertainty associated with exporting . . . ,
and (the attraction of) more investments into the country." Although the
Chief Executive did not expressly mention it in his letter, the
Philippines — and this is of special interest to the legal profession —
will benefit from the WTO system of dispute settlement by judicial
adjudication through the independent WTO settlement bodies called (1)
Dispute Settlement Panels and (2) Appellate Tribunal. Heretofore, trade
disputes were settled mainly through negotiations where solutions were
arrived at frequently on the basis of relative bargaining strengths, and
where naturally, weak and underdeveloped countries were at a
disadvantage.
The Petition in Brief
Arguing mainly (1) that the WTO requires the
Philippines "to place nationals and products of member-countries on the
same footing as Filipinos and local products" and (2) that the WTO
"intrudes, limits and/or impairs" the constitutional powers of both
Congress and the Supreme Court, the instant petition before this Court
assails the WTO Agreement for violating the mandate of the 1987
Constitution to "develop a self-reliant and independent national economy
effectively controlled by Filipinos . . . (to) give preference to
qualified Filipinos (and to) promote the preferential use of Filipino
labor, domestic materials and locally produced goods."
Simply stated, does the Philippine Constitution
prohibit Philippine participation in worldwide trade liberalization and
economic globalization? Does it proscribe Philippine integration into a
global economy that is liberalized, deregulated and privatized? These
are the main questions raised in this petition for certiorari, prohibition and mandamus
under Rule 65 of the Rules of Court praying (1) for the nullification,
on constitutional grounds, of the concurrence of the Philippine Senate
in the ratification by the President of the Philippines of the Agreement
Establishing the World Trade Organization (WTO Agreement, for brevity)
and (2) for the prohibition of its implementation and enforcement
through the release and utilization of public funds, the assignment of
public officials and employees, as well as the use of government
properties and resources by respondent-heads of various executive
offices concerned therewith. This concurrence is embodied in Senate
Resolution No. 97, dated December 14, 1994.
The Facts
On April 15, 1994, Respondent Rizalino Navarro,
then Secretary of The Department of Trade and Industry (Secretary
Navarro, for brevity), representing the Government of the Republic of
the Philippines, signed in Marrakesh, Morocco, the Final Act Embodying
the Results of the Uruguay Round of Multilateral Negotiations (Final
Act, for brevity).
By signing the Final Act, 2 Secretary Navarro on behalf of the Republic of the Philippines, agreed:
(a)
to submit, as appropriate, the WTO Agreement for the consideration of
their respective competent authorities, with a view to seeking approval
of the Agreement in accordance with their procedures; and
(b) to adopt the Ministerial Declarations and Decisions.
On
August 12, 1994, the members of the Philippine Senate received a letter
dated August 11, 1994 from the President of the Philippines, 3
stating among others that "the Uruguay Round Final Act is hereby
submitted to the Senate for its concurrence pursuant to Section 21,
Article VII of the Constitution."
On August 13, 1994, the members of the Philippine Senate received another letter from the President of the Philippines 4
likewise dated August 11, 1994, which stated among others that "the
Uruguay Round Final Act, the Agreement Establishing the World Trade
Organization, the Ministerial Declarations and Decisions, and the
Understanding on Commitments in Financial Services are hereby submitted
to the Senate for its concurrence pursuant to Section 21, Article VII of
the Constitution."
On December
9, 1994, the President of the Philippines certified the necessity of
the immediate adoption of P.S. 1083, a resolution entitled "Concurring
in the Ratification of the Agreement Establishing the World Trade
Organization." 5
On
December 14, 1994, the Philippine Senate adopted Resolution No. 97
which "Resolved, as it is hereby resolved, that the Senate concur, as it
hereby concurs, in the ratification by the President of the Philippines
of the Agreement Establishing the World Trade Organization." 6 The text of the WTO Agreement is written on pages 137 et seq. of Volume I of the 36-volume Uruguay Round of Multilateral Trade Negotiations
and includes various agreements and associated legal instruments
(identified in the said Agreement as Annexes 1, 2 and 3 thereto and
collectively referred to as Multilateral Trade Agreements, for brevity)
as follows:
ANNEX 1
Annex 1A: Multilateral Agreement on Trade in GoodsGeneral Agreement on Tariffs and Trade 1994
Agreement on Agriculture
Agreement on the Application of Sanitary and
Phytosanitary Measures
Agreement on Textiles and Clothing
Agreement on Technical Barriers to Trade
Agreement on Trade-Related Investment Measures
Agreement on Implementation of Article VI of he
General Agreement on Tariffs and Trade
1994
Agreement on Implementation of Article VII of the
General on Tariffs and Trade 1994
Agreement on Pre-Shipment Inspection
Agreement on Rules of Origin
Agreement on Imports Licensing Procedures
Agreement on Subsidies and Coordinating
Measures
Agreement on Safeguards
Annex 1B: General Agreement on Trade in Services and Annexes
Annex 1C: Agreement on Trade-Related Aspects of Intellectual
Property Rights
ANNEX 2
the Settlement of Disputes
ANNEX 3
On December 16, 1994, the President of the Philippines signed 7 the Instrument of Ratification, declaring:
NOW
THEREFORE, be it known that I, FIDEL V. RAMOS, President of the
Republic of the Philippines, after having seen and considered the
aforementioned Agreement Establishing the World Trade Organization and
the agreements and associated legal instruments included in Annexes one
(1), two (2) and three (3) of that Agreement which are integral parts
thereof, signed at Marrakesh, Morocco on 15 April 1994, do hereby ratify
and confirm the same and every Article and Clause thereof.
To
emphasize, the WTO Agreement ratified by the President of the
Philippines is composed of the Agreement Proper and "the associated
legal instruments included in Annexes one (1), two (2) and three (3) of
that Agreement which are integral parts thereof."
On the
other hand, the Final Act signed by Secretary Navarro embodies not only
the WTO Agreement (and its integral annexes aforementioned) but also (1)
the Ministerial Declarations and Decisions and (2) the Understanding on
Commitments in Financial Services. In his Memorandum dated May 13,
1996, 8 the Solicitor General describes these two latter documents as follows:
The
Ministerial Decisions and Declarations are twenty-five declarations and
decisions on a wide range of matters, such as measures in favor of
least developed countries, notification procedures, relationship of WTO
with the International Monetary Fund (IMF), and agreements on technical
barriers to trade and on dispute settlement.
The Understanding on Commitments in Financial
Services dwell on, among other things, standstill or limitations and
qualifications of commitments to existing non-conforming measures,
market access, national treatment, and definitions of non-resident
supplier of financial services, commercial presence and new financial
service.
On
December 29, 1994, the present petition was filed. After careful
deliberation on respondents' comment and petitioners' reply thereto, the
Court resolved on December 12, 1995, to give due course to the
petition, and the parties thereafter filed their respective memoranda.
The court also requested the Honorable Lilia R. Bautista, the Philippine
Ambassador to the United Nations stationed in Geneva, Switzerland, to
submit a paper, hereafter referred to as "Bautista Paper," 9 for brevity, (1) providing a historical background of and (2) summarizing the said agreements.
During the Oral Argument held on August 27, 1996, the Court directed:
(a)
the petitioners to submit the (1) Senate Committee Report on the matter
in controversy and (2) the transcript of proceedings/hearings in the
Senate; and
(b) the Solicitor General, as counsel for
respondents, to file (1) a list of Philippine treaties signed prior to
the Philippine adherence to the WTO Agreement, which derogate from
Philippine sovereignty and (2) copies of the multi-volume WTO Agreement
and other documents mentioned in the Final Act, as soon as possible.
After
receipt of the foregoing documents, the Court said it would consider the
case submitted for resolution. In a Compliance dated September 16,
1996, the Solicitor General submitted a printed copy of the 36-volume Uruguay Round of Multilateral Trade Negotiations,
and in another Compliance dated October 24, 1996, he listed the various
"bilateral or multilateral treaties or international instruments
involving derogation of Philippine sovereignty." Petitioners, on the
other hand, submitted their Compliance dated January 28, 1997, on
January 30, 1997.
The Issues
In their Memorandum dated March 11, 1996, petitioners summarized the issues as follows:
A. Whether the petition presents a political question or is otherwise not justiciable.
B. Whether the petitioner members of the Senate who
participated in the deliberations and voting leading to the concurrence
are estopped from impugning the validity of the Agreement Establishing
the World Trade Organization or of the validity of the concurrence.
C. Whether the provisions of the Agreement
Establishing the World Trade Organization contravene the provisions of
Sec. 19, Article II, and Secs. 10 and 12, Article XII, all of the 1987
Philippine Constitution.
D. Whether provisions of the Agreement Establishing
the World Trade Organization unduly limit, restrict and impair
Philippine sovereignty specifically the legislative power which, under
Sec. 2, Article VI, 1987 Philippine Constitution is "vested in the
Congress of the Philippines";
E. Whether provisions of the Agreement Establishing the World Trade Organization interfere with the exercise of judicial power.
F. Whether the respondent members of the Senate acted
in grave abuse of discretion amounting to lack or excess of
jurisdiction when they voted for concurrence in the ratification of the
constitutionally-infirm Agreement Establishing the World Trade
Organization.
G. Whether the respondent members of the Senate acted
in grave abuse of discretion amounting to lack or excess of
jurisdiction when they concurred only in the ratification of the
Agreement Establishing the World Trade Organization, and not with the
Presidential submission which included the Final Act, Ministerial
Declaration and Decisions, and the Understanding on Commitments in
Financial Services.
On
the other hand, the Solicitor General as counsel for respondents
"synthesized the several issues raised by petitioners into the
following": 10
1.
Whether or not the provisions of the "Agreement Establishing the World
Trade Organization and the Agreements and Associated Legal Instruments
included in Annexes one (1), two (2) and three (3) of that agreement"
cited by petitioners directly contravene or undermine the letter, spirit
and intent of Section 19, Article II and Sections 10 and 12, Article
XII of the 1987 Constitution.
2. Whether or not certain provisions of the Agreement
unduly limit, restrict or impair the exercise of legislative power by
Congress.
3. Whether or not certain provisions of the Agreement
impair the exercise of judicial power by this Honorable Court in
promulgating the rules of evidence.
4. Whether or not the concurrence of the Senate "in
the ratification by the President of the Philippines of the Agreement
establishing the World Trade Organization" implied rejection of the
treaty embodied in the Final Act.
By raising
and arguing only four issues against the seven presented by petitioners,
the Solicitor General has effectively ignored three, namely: (1)
whether the petition presents a political question or is otherwise not
justiciable; (2) whether petitioner-members of the Senate (Wigberto E.
Tañada and Anna Dominique Coseteng) are estopped from joining this suit;
and (3) whether the respondent-members of the Senate acted in grave
abuse of discretion when they voted for concurrence in the ratification
of the WTO Agreement. The foregoing notwithstanding, this Court resolved
to deal with these three issues thus:
(1) The "political question" issue — being very
fundamental and vital, and being a matter that probes into the very
jurisdiction of this Court to hear and decide this case — was
deliberated upon by the Court and will thus be ruled upon as the first
issue;
(2) The matter of estoppel will not be taken up
because this defense is waivable and the respondents have effectively
waived it by not pursuing it in any of their pleadings; in any event,
this issue, even if ruled in respondents' favor, will not cause the
petition's dismissal as there are petitioners other than the two
senators, who are not vulnerable to the defense of estoppel; and
(3) The issue of alleged grave abuse of discretion on
the part of the respondent senators will be taken up as an integral
part of the disposition of the four issues raised by the Solicitor
General.
During its deliberations on the case, the Court noted that the respondents did not question the locus standi
of petitioners. Hence, they are also deemed to have waived the benefit
of such issue. They probably realized that grave constitutional issues,
expenditures of public funds and serious international commitments of
the nation are involved here, and that transcendental public interest
requires that the substantive issues be met head on and decided on the
merits, rather than skirted or deflected by procedural matters. 11
To recapitulate, the issues that will be ruled upon shortly are:
(1)
DOES THE PETITION PRESENT A JUSTICIABLE CONTROVERSY? OTHERWISE STATED,
DOES THE PETITION INVOLVE A POLITICAL QUESTION OVER WHICH THIS COURT HAS
NO JURISDICTION?
(2) DO THE PROVISIONS OF THE WTO AGREEMENT AND ITS
THREE ANNEXES CONTRAVENE SEC. 19, ARTICLE II, AND SECS. 10 AND 12,
ARTICLE XII, OF THE PHILIPPINE CONSTITUTION?
(3) DO THE PROVISIONS OF SAID AGREEMENT AND ITS
ANNEXES LIMIT, RESTRICT, OR IMPAIR THE EXERCISE OF LEGISLATIVE POWER BY
CONGRESS?
(4) DO SAID PROVISIONS UNDULY IMPAIR OR INTERFERE
WITH THE EXERCISE OF JUDICIAL POWER BY THIS COURT IN PROMULGATING RULES
ON EVIDENCE?
(5) WAS THE CONCURRENCE OF THE SENATE IN THE WTO
AGREEMENT AND ITS ANNEXES SUFFICIENT AND/OR VALID, CONSIDERING THAT IT
DID NOT INCLUDE THE FINAL ACT, MINISTERIAL DECLARATIONS AND DECISIONS,
AND THE UNDERSTANDING ON COMMITMENTS IN FINANCIAL SERVICES?
The First Issue: Does the Court
Have Jurisdiction Over the Controversy?
Have Jurisdiction Over the Controversy?
In
seeking to nullify an act of the Philippine Senate on the ground that it
contravenes the Constitution, the petition no doubt raises a
justiciable controversy. Where an action of the legislative branch is
seriously alleged to have infringed the Constitution, it becomes not
only the right but in fact the duty of the judiciary to settle the
dispute. "The question thus posed is judicial rather than political. The
duty (to adjudicate) remains to assure that the supremacy of the
Constitution is upheld." 12
Once a "controversy as to the application or interpretation of a
constitutional provision is raised before this Court (as in the instant
case), it becomes a legal issue which the Court is bound by
constitutional mandate to decide." 13
The jurisdiction of this Court to adjudicate the matters 14 raised in the petition is clearly set out in the 1987 Constitution, 15 as follows:
Judicial
power includes the duty of the courts of justice to settle actual
controversies involving rights which are legally demandable and
enforceable, and to determine whether or not there has been a grave
abuse of discretion amounting to lack or excess of jurisdiction on the
part of any branch or instrumentality of the government.
The
foregoing text emphasizes the judicial department's duty and power to
strike down grave abuse of discretion on the part of any branch or
instrumentality of government including Congress. It is an innovation in
our political law. 16 As explained by former Chief Justice Roberto Concepcion, 17
"the judiciary is the final arbiter on the question of whether or not a
branch of government or any of its officials has acted without
jurisdiction or in excess of jurisdiction or so capriciously as to
constitute an abuse of discretion amounting to excess of jurisdiction.
This is not only a judicial power but a duty to pass judgment on matters
of this nature."
As this Court has repeatedly and firmly emphasized in many cases, 18
it will not shirk, digress from or abandon its sacred duty and
authority to uphold the Constitution in matters that involve grave abuse
of discretion brought before it in appropriate cases, committed by any
officer, agency, instrumentality or department of the government.
As the petition alleges grave abuse of discretion and
as there is no other plain, speedy or adequate remedy in the ordinary
course of law, we have no hesitation at all in holding that this
petition should be given due course and the vital questions raised
therein ruled upon under Rule 65 of the Rules of Court. Indeed, certiorari, prohibition and mandamus
are appropriate remedies to raise constitutional issues and to review
and/or prohibit/nullify, when proper, acts of legislative and executive
officials. On this, we have no equivocation.
We should stress that, in deciding to take jurisdiction over this petition, this Court will not review the wisdom of the decision of the President and the Senate in enlisting the country into the WTO, or pass upon the merits of trade liberalization as a policy espoused by said international body. Neither will it rule on the propriety
of the government's economic policy of reducing/removing tariffs,
taxes, subsidies, quantitative restrictions, and other import/trade
barriers. Rather, it will only exercise its constitutional duty "to
determine whether or not there had been a grave abuse of discretion
amounting to lack or excess of jurisdiction" on the part of the Senate
in ratifying the WTO Agreement and its three annexes.
Second Issue: The WTO Agreement
and Economic Nationalism
and Economic Nationalism
This is the lis mota, the main issue, raised by the petition.
Petitioners vigorously argue that the "letter, spirit
and intent" of the Constitution mandating "economic nationalism" are
violated by the so-called "parity provisions" and "national treatment"
clauses scattered in various parts not only of the WTO Agreement and its
annexes but also in the Ministerial Decisions and Declarations and in
the Understanding on Commitments in Financial Services.
Specifically, the "flagship" constitutional
provisions referred to are Sec 19, Article II, and Secs. 10 and 12,
Article XII, of the Constitution, which are worded as follows:
Article II
DECLARATION OF PRINCIPLES
AND STATE POLICIES
AND STATE POLICIES
xxx xxx xxx
Sec. 19. The State shall develop a self-reliant and independent national economy effectively controlled by Filipinos.
xxx xxx xxx
Article XII
NATIONAL ECONOMY AND PATRIMONY
xxx xxx xxx
Sec. 10. . . . The Congress shall enact measures that
will encourage the formation and operation of enterprises whose capital
is wholly owned by Filipinos.
In the grant of rights, privileges, and concessions
covering the national economy and patrimony, the State shall give
preference to qualified Filipinos.
xxx xxx xxx
Sec. 12. The State shall promote the preferential use
of Filipino labor, domestic materials and locally produced goods, and
adopt measures that help make them competitive.
Petitioners
aver that these sacred constitutional principles are desecrated by the
following WTO provisions quoted in their memorandum: 19
a) In the area of investment measures related to trade in goods (TRIMS, for brevity):
Article 2
National Treatment and Quantitative Restrictions.
1. Without prejudice to other rights and obligations
under GATT 1994, no Member shall apply any TRIM that is inconsistent
with the provisions of Article II or Article XI of GATT 1994.
2. An illustrative list of TRIMS that are
inconsistent with the obligations of general elimination of quantitative
restrictions provided for in paragraph I of Article XI of GATT 1994 is
contained in the Annex to this Agreement." (Agreement on Trade-Related
Investment Measures, Vol. 27, Uruguay Round, Legal Instruments, p.
22121, emphasis supplied).
The Annex referred to reads as follows:
ANNEX
Illustrative List
1. TRIMS that are inconsistent with the obligation of
national treatment provided for in paragraph 4 of Article III of GATT
1994 include those which are mandatory or enforceable under domestic law
or under administrative rulings, or compliance with which is necessary
to obtain an advantage, and which require:
(a) the purchase or use by an enterprise of products
of domestic origin or from any domestic source, whether specified in
terms of particular products, in terms of volume or value of products,
or in terms of proportion of volume or value of its local production; or
(b) that an enterprise's purchases or use of imported
products be limited to an amount related to the volume or value of
local products that it exports.
2. TRIMS that are inconsistent with the obligations
of general elimination of quantitative restrictions provided for in
paragraph 1 of Article XI of GATT 1994 include those which are mandatory
or enforceable under domestic laws or under administrative rulings, or
compliance with which is necessary to obtain an advantage, and which
restrict:
(a) the importation by an enterprise of products used in or related to the local production that it exports;
(b) the importation by an enterprise of products used
in or related to its local production by restricting its access to
foreign exchange inflows attributable to the enterprise; or
(c) the exportation or sale for export specified in
terms of particular products, in terms of volume or value of products,
or in terms of a preparation of volume or value of its local production.
(Annex to the Agreement on Trade-Related Investment Measures, Vol. 27,
Uruguay Round Legal Documents, p. 22125, emphasis supplied).
The paragraph 4 of Article III of GATT 1994 referred to is quoted as follows:
The products of the territory of any contracting party imported into the territory of any other contracting party shall be accorded treatment no less favorable than that accorded to like products of national origin
in respect of laws, regulations and requirements affecting their
internal sale, offering for sale, purchase, transportation, distribution
or use, the provisions of this paragraph shall not prevent the
application of differential internal transportation charges which are
based exclusively on the economic operation of the means of transport
and not on the nationality of the product." (Article III, GATT 1947, as
amended by the Protocol Modifying Part II, and Article XXVI of GATT, 14
September 1948, 62 UMTS 82-84 in relation to paragraph 1(a) of the
General Agreement on Tariffs and Trade 1994, Vol. 1, Uruguay Round,
Legal Instruments p. 177, emphasis supplied).
(b) In the area of trade related aspects of intellectual property rights (TRIPS, for brevity):
Each Member shall accord to the nationals
of other Members treatment no less favourable than that it accords to
its own nationals with regard to the protection of intellectual
property. . . (par. 1 Article 3, Agreement on Trade-Related Aspect of
Intellectual Property rights, Vol. 31, Uruguay Round, Legal Instruments,
p. 25432 (emphasis supplied)
(c) In the area of the General Agreement on Trade in Services:
National Treatment
1. In the sectors inscribed in its schedule, and
subject to any conditions and qualifications set out therein, each
Member shall accord to services and service suppliers of any other
Member, in respect of all measures affecting the supply of services, treatment no less favourable than it accords to its own like services and service suppliers.
2. A Member may meet the requirement of paragraph I
by according to services and service suppliers of any other Member,
either formally suppliers of any other Member, either formally identical
treatment or formally different treatment to that it accords to its own
like services and service suppliers.
3. Formally identical or formally different treatment
shall be considered to be less favourable if it modifies the conditions
of completion in favour of services or service suppliers of the Member
compared to like services or service suppliers of any other Member.
(Article XVII, General Agreement on Trade in Services, Vol. 28, Uruguay
Round Legal Instruments, p. 22610 emphasis supplied).
It
is petitioners' position that the foregoing "national treatment" and
"parity provisions" of the WTO Agreement "place nationals and products
of member countries on the same footing as Filipinos and local
products," in contravention of the "Filipino First" policy of the
Constitution. They allegedly render meaningless the phrase "effectively
controlled by Filipinos." The constitutional conflict becomes more
manifest when viewed in the context of the clear duty imposed on the
Philippines as a WTO member to ensure the conformity of its laws,
regulations and administrative procedures with its obligations as
provided in the annexed agreements. 20
Petitioners further argue that these provisions contravene
constitutional limitations on the role exports play in national
development and negate the preferential treatment accorded to Filipino
labor, domestic materials and locally produced goods.
On the other hand, respondents through the Solicitor
General counter (1) that such Charter provisions are not self-executing
and merely set out general policies; (2) that these nationalistic
portions of the Constitution invoked by petitioners should not be read
in isolation but should be related to other relevant provisions of Art.
XII, particularly Secs. 1 and 13 thereof; (3) that read properly, the
cited WTO clauses do not conflict with Constitution; and (4) that the
WTO Agreement contains sufficient provisions to protect developing
countries like the Philippines from the harshness of sudden trade
liberalization.
We shall now discuss and rule on these arguments.
Not Self-Executing
By its
very title, Article II of the Constitution is a "declaration of
principles and state policies." The counterpart of this article in the
1935 Constitution 21 is called the "basic political creed of the nation" by Dean Vicente Sinco. 22 These principles in Article II are not intended to be self-executing principles ready for enforcement through the courts. 23
They are used by the judiciary as aids or as guides in the exercise of
its power of judicial review, and by the legislature in its enactment of
laws. As held in the leading case of Kilosbayan, Incorporated vs. Morato, 24
the principles and state policies enumerated in Article II and some
sections of Article XII are not "self-executing provisions, the
disregard of which can give rise to a cause of action in the courts.
They do not embody judicially enforceable constitutional rights but
guidelines for legislation."
In the same light, we held in Basco vs. Pagcor 25 that broad constitutional principles need legislative enactments to implement the, thus:
On
petitioners' allegation that P.D. 1869 violates Sections 11 (Personal
Dignity) 12 (Family) and 13 (Role of Youth) of Article II; Section 13
(Social Justice) of Article XIII and Section 2 (Educational Values) of
Article XIV of the 1987 Constitution, suffice it to state also that
these are merely statements of principles and policies. As such, they
are basically not self-executing, meaning a law should be passed by
Congress to clearly define and effectuate such principles.
In general, therefore, the 1935 provisions were not
intended to be self-executing principles ready for enforcement through
the courts. They were rather directives addressed to the executive and
to the legislature. If the executive and the legislature failed to heed
the directives of the article, the available remedy was not judicial but
political. The electorate could express their displeasure with the
failure of the executive and the legislature through the language of the
ballot. (Bernas, Vol. II, p. 2).
The
reasons for denying a cause of action to an alleged infringement of
board constitutional principles are sourced from basic considerations of
due process and the lack of judicial authority to wade "into the
uncharted ocean of social and economic policy making." Mr. Justice
Florentino P. Feliciano in his concurring opinion in Oposa vs. Factoran, Jr., 26 explained these reasons as follows:
My
suggestion is simply that petitioners must, before the trial court,
show a more specific legal right — a right cast in language of a
significantly lower order of generality than Article II (15) of the
Constitution — that is or may be violated by the actions, or failures to
act, imputed to the public respondent by petitioners so that the trial
court can validly render judgment grating all or part of the relief
prayed for. To my mind, the court should be understood as simply saying
that such a more specific legal right or rights may well exist in our
corpus of law, considering the general policy principles found in the
Constitution and the existence of the Philippine Environment Code, and
that the trial court should have given petitioners an effective
opportunity so to demonstrate, instead of aborting the proceedings on a
motion to dismiss.
It seems to me important that the legal right which
is an essential component of a cause of action be a specific, operable
legal right, rather than a constitutional or statutory policy, for at
least two (2) reasons. One is that unless the legal right claimed to
have been violated or disregarded is given specification in operational
terms, defendants may well be unable to defend themselves intelligently
and effectively; in other words, there are due process dimensions to
this matter.
The second is a broader-gauge consideration — where a
specific violation of law or applicable regulation is not alleged or
proved, petitioners can be expected to fall back on the expanded
conception of judicial power in the second paragraph of Section 1 of
Article VIII of the Constitution which reads:
Sec. 1. . . .
Judicial power includes the duty of the courts of
justice to settle actual controversies involving rights which are
legally demandable and enforceable, and to determine whether or not
there has been a grave abuse of discretion amounting to lack or excess
of jurisdiction on the part of any branch or instrumentality of the
Government. (Emphasis supplied)
When substantive standards as general as "the right
to a balanced and healthy ecology" and "the right to health" are
combined with remedial standards as broad ranging as "a grave abuse of
discretion amounting to lack or excess of jurisdiction," the result will
be, it is respectfully submitted, to propel courts into the uncharted
ocean of social and economic policy making. At least in respect of the
vast area of environmental protection and management, our courts have no
claim to special technical competence and experience and professional
qualification. Where no specific, operable norms and standards are shown
to exist, then the policy making departments — the legislative and
executive departments — must be given a real and effective opportunity
to fashion and promulgate those norms and standards, and to implement
them before the courts should intervene.
Other Constitutional Mandates to Attain
Balanced Development of Economy
On the
other hand, Secs. 10 and 12 of Article XII, apart from merely laying
down general principles relating to the national economy and patrimony,
should be read and understood in relation to the other sections in said
article, especially Secs. 1 and 13 thereof which read:
Sec.
1. The goals of the national economy are a more equitable distribution
of opportunities, income, and wealth; a sustained increase in the amount
of goods and services produced by the nation for the benefit of the
people; and an expanding productivity as the key to raising the quality
of life for all especially the underprivileged.
The State shall promote industrialization and full
employment based on sound agricultural development and agrarian reform,
through industries that make full and efficient use of human and natural
resources, and which are competitive in both domestic and foreign
markets. However, the State shall protect Filipino enterprises against
unfair foreign competition and trade practices.
In the pursuit of these goals, all sectors of the
economy and all regions of the country shall be given optimum
opportunity to develop. . . .
xxx xxx xxx
Sec. 13. The State shall pursue a trade policy that
serves the general welfare and utilizes all forms and arrangements of
exchange on the basis of equality and reciprocity.
As pointed out by the Solicitor General, Sec. 1 lays down the basic goals of national economic development, as follows:
1. A more equitable distribution of opportunities, income and wealth;
2. A sustained increase in the amount of goods and services provided by the nation for the benefit of the people; and
3. An expanding productivity as the key to raising the quality of life for all especially the underprivileged.
With these
goals in context, the Constitution then ordains the ideals of economic
nationalism (1) by expressing preference in favor of qualified Filipinos
"in the grant of rights, privileges and concessions covering the
national economy and patrimony" 27
and in the use of "Filipino labor, domestic materials and
locally-produced goods"; (2) by mandating the State to "adopt measures
that help make them competitive; 28
and (3) by requiring the State to "develop a self-reliant and
independent national economy effectively controlled by Filipinos." 29
In similar language, the Constitution takes into account the realities
of the outside world as it requires the pursuit of "a trade policy that
serves the general welfare and utilizes all forms and arrangements of
exchange on the basis of equality ad reciprocity"; 30 and speaks of industries "which are competitive in both domestic and foreign markets" as well as of the protection of "Filipino enterprises against unfair foreign competition and trade practices."
It is true that in the recent case of Manila Prince Hotel vs. Government Service Insurance System, et al., 31
this Court held that "Sec. 10, second par., Art. XII of the 1987
Constitution is a mandatory, positive command which is complete in
itself and which needs no further guidelines or implementing laws or
rule for its enforcement. From its very words the provision does not
require any legislation to put it in operation. It is per se
judicially enforceable." However, as the constitutional provision itself
states, it is enforceable only in regard to "the grants of rights,
privileges and concessions covering national economy and patrimony" and
not to every aspect of trade and commerce. It refers to exceptions
rather than the rule. The issue here is not whether this paragraph of
Sec. 10 of Art. XII is self-executing or not. Rather, the issue is
whether, as a rule, there are enough balancing provisions in the
Constitution to allow the Senate to ratify the Philippine concurrence in
the WTO Agreement. And we hold that there are.
All told,
while the Constitution indeed mandates a bias in favor of Filipino
goods, services, labor and enterprises, at the same time, it recognizes
the need for business exchange with the rest of the world on the bases
of equality and reciprocity and limits protection of Filipino
enterprises only against foreign competition and trade practices that
are unfair. 32
In other words, the Constitution did not intend to pursue an
isolationist policy. It did not shut out foreign investments, goods and
services in the development of the Philippine economy. While the
Constitution does not encourage the unlimited entry of foreign goods,
services and investments into the country, it does not prohibit them
either. In fact, it allows an exchange on the basis of equality and
reciprocity, frowning only on foreign competition that is unfair.
Protect Weak Economies
Upon the other hand, respondents maintain that
the WTO itself has some built-in advantages to protect weak and
developing economies, which comprise the vast majority of its members.
Unlike in the UN where major states have permanent seats and veto powers
in the Security Council, in the WTO, decisions are made on the basis of
sovereign equality, with each member's vote equal in weight to that of
any other. There is no WTO equivalent of the UN Security Council.
WTO
decides by consensus whenever possible, otherwise, decisions of the
Ministerial Conference and the General Council shall be taken by the
majority of the votes cast, except in cases of interpretation of the
Agreement or waiver of the obligation of a member which would require
three fourths vote. Amendments would require two thirds vote in general.
Amendments to MFN provisions and the Amendments provision will require
assent of all members. Any member may withdraw from the Agreement upon
the expiration of six months from the date of notice of withdrawals. 33
Hence,
poor countries can protect their common interests more effectively
through the WTO than through one-on-one negotiations with developed
countries. Within the WTO, developing countries can form powerful blocs
to push their economic agenda more decisively than outside the
Organization. This is not merely a matter of practical alliances but a
negotiating strategy rooted in law. Thus, the basic principles
underlying the WTO Agreement recognize the need of developing countries
like the Philippines to "share in the growth in international trade commensurate with the needs of their economic development." These basic principles are found in the preamble 34 of the WTO Agreement as follows:
The Parties to this Agreement,
Recognizing that their relations in the field of
trade and economic endeavour should be conducted with a view to raising
standards of living, ensuring full employment and a large and steadily
growing volume of real income and effective demand, and expanding the
production of and trade in goods and services, while allowing for the
optimal use of the world's resources in accordance with the objective of
sustainable development, seeking both to protect and preserve the
environment and to enhance the means for doing so in a manner consistent with their respective needs and concerns at different levels of economic development,
Recognizing further that there is need for
positive efforts designed to ensure that developing countries, and
especially the least developed among them, secure a share in the growth in international trade commensurate with the needs of their economic development,
Being desirous of contributing to these
objectives by entering into reciprocal and mutually advantageous
arrangements directed to the substantial reduction of tariffs and other
barriers to trade and to the elimination of discriminatory treatment in international trade relations,
Resolved, therefore, to develop an integrated, more
viable and durable multilateral trading system encompassing the General
Agreement on Tariffs and Trade, the results of past trade liberalization
efforts, and all of the results of the Uruguay Round of Multilateral
Trade Negotiations,
Determined to preserve the basic principles and to
further the objectives underlying this multilateral trading system, . . .
(emphasis supplied.)
Protect Developing Countries
So too,
the Solicitor General points out that pursuant to and consistent with
the foregoing basic principles, the WTO Agreement grants developing
countries a more lenient treatment, giving their domestic industries
some protection from the rush of foreign competition. Thus, with respect
to tariffs in general, preferential treatment is given to developing
countries in terms of the amount of tariff reduction and the period within which the reduction is to be spread out. Specifically, GATT requires an average tariff reduction rate of 36% for developed countries to be effected within a period of six (6) years while developing countries — including the Philippines — are required to effect an average tariff reduction of only 24% within ten (10) years.
In respect to domestic subsidy, GATT requires developed countries to reduce domestic support to agricultural products by 20% over six (6) years, as compared to only 13% for developing countries to be effected within ten (10) years.
In regard to export subsidy for agricultural
products, GATT requires developed countries to reduce their budgetary
outlays for export subsidy by 36% and export volumes receiving export subsidy by 21% within a period of six (6) years. For developing countries, however, the reduction rate is only two-thirds of that prescribed for developed countries and a longer period of ten (10) years within which to effect such reduction.
Moreover, GATT itself has provided built-in
protection from unfair foreign competition and trade practices including
anti-dumping measures, countervailing measures and safeguards against
import surges. Where local businesses are jeopardized by unfair foreign
competition, the Philippines can avail of these measures. There is
hardly therefore any basis for the statement that under the WTO, local
industries and enterprises will all be wiped out and that Filipinos will
be deprived of control of the economy. Quite the contrary, the weaker
situations of developing nations like the Philippines have been taken
into account; thus, there would be no basis to say that in joining the
WTO, the respondents have gravely abused their discretion. True, they
have made a bold decision to steer the ship of state into the yet
uncharted sea of economic liberalization. But such decision cannot be
set aside on the ground of grave abuse of discretion, simply because we
disagree with it or simply because we believe only in other economic
policies. As earlier stated, the Court in taking jurisdiction of this
case will not pass upon the advantages and disadvantages of trade
liberalization as an economic policy. It will only perform its
constitutional duty of determining whether the Senate committed grave
abuse of discretion.
Rule Out Foreign Competition
Furthermore, the constitutional policy of a "self-reliant and independent national economy" 35
does not necessarily rule out the entry of foreign investments, goods
and services. It contemplates neither "economic seclusion" nor
"mendicancy in the international community." As explained by
Constitutional Commissioner Bernardo Villegas, sponsor of this
constitutional policy:
Economic
self-reliance is a primary objective of a developing country that is
keenly aware of overdependence on external assistance for even its most
basic needs. It does not mean autarky or economic seclusion; rather,
it means avoiding mendicancy in the international community.
Independence refers to the freedom from undue foreign control of the
national economy, especially in such strategic industries as in the
development of natural resources and public utilities. 36
The
WTO reliance on "most favored nation," "national treatment," and "trade
without discrimination" cannot be struck down as unconstitutional as in
fact they are rules of equality and reciprocity that apply to all WTO
members. Aside from envisioning a trade policy based on "equality and
reciprocity," 37
the fundamental law encourages industries that are "competitive in both
domestic and foreign markets," thereby demonstrating a clear policy
against a sheltered domestic trade environment, but one in favor of the
gradual development of robust industries that can compete with the best
in the foreign markets. Indeed, Filipino managers and Filipino
enterprises have shown capability and tenacity to compete
internationally. And given a free trade environment, Filipino
entrepreneurs and managers in Hongkong have demonstrated the Filipino
capacity to grow and to prosper against the best offered under a policy
of laissez faire.
Not Industries or Enterprises
The Constitution has not really shown any
unbalanced bias in favor of any business or enterprise, nor does it
contain any specific pronouncement that Filipino companies should be
pampered with a total proscription of foreign competition. On the other
hand, respondents claim that WTO/GATT aims to make available to the
Filipino consumer the best goods and services obtainable anywhere in the
world at the most reasonable prices. Consequently, the question boils
down to whether WTO/GATT will favor the general welfare of the public at
large.
Will adherence to the WTO treaty bring this ideal (of favoring the general welfare) to reality?
Will WTO/GATT succeed in promoting the Filipinos'
general welfare because it will — as promised by its promoters — expand
the country's exports and generate more employment?
Will it bring more prosperity, employment, purchasing
power and quality products at the most reasonable rates to the Filipino
public?
The responses to these questions involve "judgment
calls" by our policy makers, for which they are answerable to our people
during appropriate electoral exercises. Such questions and the answers
thereto are not subject to judicial pronouncements based on grave abuse
of discretion.
Future Events and Contingencies
No doubt, the WTO Agreement was not yet in
existence when the Constitution was drafted and ratified in 1987. That
does not mean however that the Charter is necessarily flawed in the
sense that its framers might not have anticipated the advent of a
borderless world of business. By the same token, the United Nations was
not yet in existence when the 1935 Constitution became effective. Did
that necessarily mean that the then Constitution might not have
contemplated a diminution of the absoluteness of sovereignty when the
Philippines signed the UN Charter, thereby effectively surrendering part
of its control over its foreign relations to the decisions of various
UN organs like the Security Council?
It is not
difficult to answer this question. Constitutions are designed to meet
not only the vagaries of contemporary events. They should be interpreted
to cover even future and unknown circumstances. It is to the credit of
its drafters that a Constitution can withstand the assaults of bigots
and infidels but at the same time bend with the refreshing winds of
change necessitated by unfolding events. As one eminent political law
writer and respected jurist 38 explains:
The
Constitution must be quintessential rather than superficial, the root
and not the blossom, the base and frame-work only of the edifice that is
yet to rise. It is but the core of the dream that must take shape, not
in a twinkling by mandate of our delegates, but slowly "in the crucible
of Filipino minds and hearts," where it will in time develop its sinews
and gradually gather its strength and finally achieve its substance. In
fine, the Constitution cannot, like the goddess Athena, rise full-grown
from the brow of the Constitutional Convention, nor can it conjure by
mere fiat an instant Utopia. It must grow with the society it seeks
to re-structure and march apace with the progress of the race, drawing
from the vicissitudes of history the dynamism and vitality that will
keep it, far from becoming a petrified rule, a pulsing, living law
attuned to the heartbeat of the nation.
Third Issue: The WTO Agreement and Legislative Power
The WTO
Agreement provides that "(e)ach Member shall ensure the conformity of
its laws, regulations and administrative procedures with its obligations
as provided in the annexed Agreements." 39
Petitioners maintain that this undertaking "unduly limits, restricts
and impairs Philippine sovereignty, specifically the legislative power
which under Sec. 2, Article VI of the 1987 Philippine Constitution is
vested in the Congress of the Philippines. It is an assault on the
sovereign powers of the Philippines because this means that Congress
could not pass legislation that will be good for our national interest
and general welfare if such legislation will not conform with the WTO
Agreement, which not only relates to the trade in goods . . . but also
to the flow of investments and money . . . as well as to a whole slew of
agreements on socio-cultural matters . . . 40
More specifically, petitioners claim that said WTO proviso derogates from the power to tax, which is lodged in the Congress. 41
And while the Constitution allows Congress to authorize the President
to fix tariff rates, import and export quotas, tonnage and wharfage
dues, and other duties or imposts, such authority is subject to
"specified limits and . . . such limitations and restrictions" as
Congress may provide, 42 as in fact it did under Sec. 401 of the Tariff and Customs Code.
International Law and Treaties
This
Court notes and appreciates the ferocity and passion by which
petitioners stressed their arguments on this issue. However, while
sovereignty has traditionally been deemed absolute and all-encompassing
on the domestic level, it is however subject to restrictions and
limitations voluntarily agreed to by the Philippines, expressly or
impliedly, as a member of the family of nations. Unquestionably, the
Constitution did not envision a hermit-type isolation of the country
from the rest of the world. In its Declaration of Principles and State
Policies, the Constitution "adopts the generally accepted principles of
international law as part of the law of the land, and adheres to the
policy of peace, equality, justice, freedom, cooperation and amity, with
all nations." 43
By the doctrine of incorporation, the country is bound by generally
accepted principles of international law, which are considered to be
automatically part of our own laws. 44 One of the oldest and most fundamental rules in international law is pacta sunt servanda —
international agreements must be performed in good faith. "A treaty
engagement is not a mere moral obligation but creates a legally binding
obligation on the parties . . . A state which has contracted valid
international obligations is bound to make in its legislations such
modifications as may be necessary to ensure the fulfillment of the
obligations undertaken." 45
By
their inherent nature, treaties really limit or restrict the
absoluteness of sovereignty. By their voluntary act, nations may
surrender some aspects of their state power in exchange for greater
benefits granted by or derived from a convention or pact. After all,
states, like individuals, live with coequals, and in pursuit of mutually
covenanted objectives and benefits, they also commonly agree to limit
the exercise of their otherwise absolute rights. Thus, treaties have
been used to record agreements between States concerning such widely
diverse matters as, for example, the lease of naval bases, the sale or
cession of territory, the termination of war, the regulation of conduct
of hostilities, the formation of alliances, the regulation of commercial relations,
the settling of claims, the laying down of rules governing conduct in
peace and the establishment of international organizations. 46
The sovereignty of a state therefore cannot in fact and in reality be
considered absolute. Certain restrictions enter into the picture: (1)
limitations imposed by the very nature of membership in the family of
nations and (2) limitations imposed by treaty stipulations. As aptly put
by John F. Kennedy, "Today, no nation can build its destiny alone. The
age of self-sufficient nationalism is over. The age of interdependence
is here." 47
Limit Sovereignty
Thus,
when the Philippines joined the United Nations as one of its 51 charter
members, it consented to restrict its sovereign rights under the
"concept of sovereignty as auto-limitation." 47-A
Under Article 2 of the UN Charter, "(a)ll members shall give the United
Nations every assistance in any action it takes in accordance with the
present Charter, and shall refrain from giving assistance to any state
against which the United Nations is taking preventive or enforcement
action." Such assistance includes payment of its corresponding share not
merely in administrative expenses but also in expenditures for the
peace-keeping operations of the organization. In its advisory opinion of
July 20, 1961, the International Court of Justice held that money used
by the United Nations Emergency Force in the Middle East and in the
Congo were "expenses of the United Nations" under Article 17, paragraph
2, of the UN Charter. Hence, all its members must bear their
corresponding share in such expenses. In this sense, the Philippine
Congress is restricted in its power to appropriate. It is compelled to
appropriate funds whether it agrees with such peace-keeping expenses or
not. So too, under Article 105 of the said Charter, the UN and its
representatives enjoy diplomatic privileges and immunities, thereby
limiting again the exercise of sovereignty of members within their own
territory. Another example: although "sovereign equality" and "domestic
jurisdiction" of all members are set forth as underlying principles in
the UN Charter, such provisos are however subject to enforcement
measures decided by the Security Council for the maintenance of
international peace and security under Chapter VII of the Charter. A
final example: under Article 103, "(i)n the event of a conflict between
the obligations of the Members of the United Nations under the present
Charter and their obligations under any other international agreement,
their obligation under the present charter shall prevail," thus
unquestionably denying the Philippines — as a member — the sovereign
power to make a choice as to which of conflicting obligations, if any,
to honor.
Apart from the UN Treaty, the Philippines has entered
into many other international pacts — both bilateral and multilateral —
that involve limitations on Philippine sovereignty. These are
enumerated by the Solicitor General in his Compliance dated October 24,
1996, as follows:
(a)
Bilateral convention with the United States regarding taxes on income,
where the Philippines agreed, among others, to exempt from tax, income
received in the Philippines by, among others, the Federal Reserve Bank
of the United States, the Export/Import Bank of the United States, the
Overseas Private Investment Corporation of the United States. Likewise,
in said convention, wages, salaries and similar remunerations paid by
the United States to its citizens for labor and personal services
performed by them as employees or officials of the United States are
exempt from income tax by the Philippines.
(b) Bilateral agreement with Belgium, providing,
among others, for the avoidance of double taxation with respect to taxes
on income.
(c) Bilateral convention with the Kingdom of Sweden for the avoidance of double taxation.
(d) Bilateral convention with the French Republic for the avoidance of double taxation.
(e) Bilateral air transport agreement with Korea
where the Philippines agreed to exempt from all customs duties,
inspection fees and other duties or taxes aircrafts of South Korea and
the regular equipment, spare parts and supplies arriving with said
aircrafts.
(f) Bilateral air service agreement with Japan, where
the Philippines agreed to exempt from customs duties, excise taxes,
inspection fees and other similar duties, taxes or charges fuel,
lubricating oils, spare parts, regular equipment, stores on board
Japanese aircrafts while on Philippine soil.
(g) Bilateral air service agreement with Belgium
where the Philippines granted Belgian air carriers the same privileges
as those granted to Japanese and Korean air carriers under separate air
service agreements.
(h) Bilateral notes with Israel for the abolition of
transit and visitor visas where the Philippines exempted Israeli
nationals from the requirement of obtaining transit or visitor visas for
a sojourn in the Philippines not exceeding 59 days.
(i) Bilateral agreement with France exempting French
nationals from the requirement of obtaining transit and visitor visa for
a sojourn not exceeding 59 days.
(j) Multilateral Convention on Special Missions,
where the Philippines agreed that premises of Special Missions in the
Philippines are inviolable and its agents can not enter said premises
without consent of the Head of Mission concerned. Special Missions are
also exempted from customs duties, taxes and related charges.
(k) Multilateral convention on the Law of Treaties.
In this convention, the Philippines agreed to be governed by the Vienna
Convention on the Law of Treaties.
(l) Declaration of the President of the Philippines
accepting compulsory jurisdiction of the International Court of Justice.
The International Court of Justice has jurisdiction in all legal
disputes concerning the interpretation of a treaty, any question of
international law, the existence of any fact which, if established,
would constitute a breach "of international obligation."
In the
foregoing treaties, the Philippines has effectively agreed to limit the
exercise of its sovereign powers of taxation, eminent domain and police
power. The underlying consideration in this partial surrender of
sovereignty is the reciprocal commitment of the other contracting states
in granting the same privilege and immunities to the Philippines, its
officials and its citizens. The same reciprocity characterizes the
Philippine commitments under WTO-GATT.
International
treaties, whether relating to nuclear disarmament, human rights, the
environment, the law of the sea, or trade, constrain domestic political
sovereignty through the assumption of external obligations. But unless
anarchy in international relations is preferred as an alternative, in
most cases we accept that the benefits of the reciprocal obligations
involved outweigh the costs associated with any loss of political
sovereignty. (T)rade treaties that structure relations by reference to
durable, well-defined substantive norms and objective dispute resolution
procedures reduce the risks of larger countries exploiting raw economic
power to bully smaller countries, by subjecting power relations to some
form of legal ordering. In addition, smaller countries typically stand
to gain disproportionately from trade liberalization. This is due to the
simple fact that liberalization will provide access to a larger set of
potential new trading relationship than in case of the larger country
gaining enhanced success to the smaller country's market. 48
The
point is that, as shown by the foregoing treaties, a portion of
sovereignty may be waived without violating the Constitution, based on
the rationale that the Philippines "adopts the generally accepted
principles of international law as part of the law of the land and
adheres to the policy of . . . cooperation and amity with all nations."
Fourth Issue: The WTO Agreement and Judicial Power
Petitioners
aver that paragraph 1, Article 34 of the General Provisions and Basic
Principles of the Agreement on Trade-Related Aspects of Intellectual
Property Rights (TRIPS) 49 intrudes on the power of the Supreme Court to promulgate rules concerning pleading, practice and procedures. 50
To understand the scope and meaning of Article 34, TRIPS, 51 it will be fruitful to restate its full text as follows:
Article 34
Process Patents: Burden of Proof
1. For the purposes of civil proceedings in
respect of the infringement of the rights of the owner referred to in
paragraph 1 (b) of Article 28, if the subject matter of a patent is a
process for obtaining a product, the judicial authorities shall have the
authority to order the defendant to prove that the process to obtain an
identical product is different from the patented process. Therefore,
Members shall provide, in at least one of the following circumstances,
that any identical product when produced without the consent of the
patent owner shall, in the absence of proof to the contrary, be deemed
to have been obtained by the patented process:
(a) if the product obtained by the patented process is new;
(b) if there is a substantial likelihood that the
identical product was made by the process and the owner of the patent
has been unable through reasonable efforts to determine the process
actually used.
2. Any Member shall be free to provide that the
burden of proof indicated in paragraph 1 shall be on the alleged
infringer only if the condition referred to in subparagraph (a) is
fulfilled or only if the condition referred to in subparagraph (b) is
fulfilled.
3. In the adduction of proof to the contrary, the
legitimate interests of defendants in protecting their manufacturing and
business secrets shall be taken into account.
From the
above, a WTO Member is required to provide a rule of disputable (not the
words "in the absence of proof to the contrary") presumption that a
product shown to be identical to one produced with the use of a patented
process shall be deemed to have been obtained by the (illegal) use of
the said patented process, (1) where such product obtained by the
patented product is new, or (2) where there is "substantial likelihood"
that the identical product was made with the use of the said patented
process but the owner of the patent could not determine the exact
process used in obtaining such identical product. Hence, the "burden of
proof" contemplated by Article 34 should actually be understood as the
duty of the alleged patent infringer to overthrow such presumption. Such
burden, properly understood, actually refers to the "burden of
evidence" (burden of going forward) placed on the producer of the
identical (or fake) product to show that his product was produced
without the use of the patented process.
The foregoing notwithstanding, the patent owner still
has the "burden of proof" since, regardless of the presumption provided
under paragraph 1 of Article 34, such owner still has to introduce
evidence of the existence of the alleged identical product, the fact
that it is "identical" to the genuine one produced by the patented
process and the fact of "newness" of the genuine product or the fact of
"substantial likelihood" that the identical product was made by the
patented process.
The foregoing should really present no problem in
changing the rules of evidence as the present law on the subject,
Republic Act No. 165, as amended, otherwise known as the Patent Law,
provides a similar presumption in cases of infringement of patented
design or utility model, thus:
Sec. 60. Infringement.
— Infringement of a design patent or of a patent for utility model
shall consist in unauthorized copying of the patented design or utility
model for the purpose of trade or industry in the article or product and
in the making, using or selling of the article or product copying the
patented design or utility model. Identity or substantial identity with the patented design or utility model shall constitute evidence of copying. (emphasis supplied)
Moreover,
it should be noted that the requirement of Article 34 to provide a
disputable presumption applies only if (1) the product obtained by the
patented process in NEW or (2) there is a substantial likelihood that
the identical product was made by the process and the process owner has
not been able through reasonable effort to determine the process used.
Where either of these two provisos does not obtain, members shall be
free to determine the appropriate method of implementing the provisions
of TRIPS within their own internal systems and processes.
By and large, the arguments adduced in connection
with our disposition of the third issue — derogation of legislative
power — will apply to this fourth issue also. Suffice it to say that the
reciprocity clause more than justifies such intrusion, if any actually
exists. Besides, Article 34 does not contain an unreasonable burden,
consistent as it is with due process and the concept of adversarial
dispute settlement inherent in our judicial system.
So too,
since the Philippine is a signatory to most international conventions on
patents, trademarks and copyrights, the adjustment in legislation and
rules of procedure will not be substantial. 52
Fifth Issue: Concurrence Only in the WTO Agreement and
Not in Other Documents Contained in the Final Act
Not in Other Documents Contained in the Final Act
Petitioners
allege that the Senate concurrence in the WTO Agreement and its annexes
— but not in the other documents referred to in the Final Act, namely
the Ministerial Declaration and Decisions and the Understanding on
Commitments in Financial Services — is defective and insufficient and
thus constitutes abuse of discretion. They submit that such concurrence
in the WTO Agreement alone is flawed because it is in effect a
rejection of the Final Act, which in turn was the document signed by
Secretary Navarro, in representation of the Republic upon authority of
the President. They contend that the second letter of the President to
the Senate 53 which enumerated what constitutes the Final Act should have been the subject of concurrence of the Senate.
"A final act, sometimes called protocol de cloture,
is an instrument which records the winding up of the proceedings of a
diplomatic conference and usually includes a reproduction of the texts
of treaties, conventions, recommendations and other acts agreed upon and
signed by the plenipotentiaries attending the conference." 54
It is not the treaty itself. It is rather a summary of the proceedings
of a protracted conference which may have taken place over several
years. The text of the "Final Act Embodying the Results of the Uruguay
Round of Multilateral Trade Negotiations" is contained in just one page 55 in Vol. I of the 36-volume Uruguay Round of Multilateral Trade Negotiations. By signing said Final Act, Secretary Navarro as representative of the Republic of the Philippines undertook:
(a)
to submit, as appropriate, the WTO Agreement for the consideration of
their respective competent authorities with a view to seeking approval
of the Agreement in accordance with their procedures; and
(b) to adopt the Ministerial Declarations and Decisions.
The
assailed Senate Resolution No. 97 expressed concurrence in exactly what
the Final Act required from its signatories, namely, concurrence of the
Senate in the WTO Agreement.
The
Ministerial Declarations and Decisions were deemed adopted without need
for ratification. They were approved by the ministers by virtue of
Article XXV: 1 of GATT which provides that representatives of the
members can meet "to give effect to those provisions of this Agreement
which invoke joint action, and generally with a view to facilitating the
operation and furthering the objectives of this Agreement." 56
The
Understanding on Commitments in Financial Services also approved in
Marrakesh does not apply to the Philippines. It applies only to those 27
Members which "have indicated in their respective schedules of
commitments on standstill, elimination of monopoly, expansion of
operation of existing financial service suppliers, temporary entry of
personnel, free transfer and processing of information, and national
treatment with respect to access to payment, clearing systems and
refinancing available in the normal course of business." 57
On the other hand, the WTO Agreement itself expresses what multilateral agreements are deemed included as its integral parts, 58 as follows:
Article II
Scope of the WTO
1. The WTO shall provide the common institutional
frame-work for the conduct of trade relations among its Members in
matters to the agreements and associated legal instruments included in
the Annexes to this Agreement.
2. The Agreements and associated legal instruments
included in Annexes 1, 2, and 3, (hereinafter referred to as
"Multilateral Agreements") are integral parts of this Agreement, binding
on all Members.
3. The Agreements and associated legal instruments
included in Annex 4 (hereinafter referred to as "Plurilateral Trade
Agreements") are also part of this Agreement for those Members that have
accepted them, and are binding on those Members. The Plurilateral Trade
Agreements do not create either obligation or rights for Members that
have not accepted them.
4. The General Agreement on Tariffs and Trade 1994 as
specified in annex 1A (hereinafter referred to as "GATT 1994") is
legally distinct from the General Agreement on Tariffs and Trade, dated
30 October 1947, annexed to the Final Act adopted at the conclusion of
the Second Session of the Preparatory Committee of the United Nations
Conference on Trade and Employment, as subsequently rectified, amended
or modified (hereinafter referred to as "GATT 1947").
It
should be added that the Senate was well-aware of what it was
concurring in as shown by the members' deliberation on August 25, 1994.
After reading the letter of President Ramos dated August 11, 1994, 59 the senators
of the Republic minutely dissected what the Senate was concurring in, as follows: 60
of the Republic minutely dissected what the Senate was concurring in, as follows: 60
THE
CHAIRMAN: Yes. Now, the question of the validity of the submission came
up in the first day hearing of this Committee yesterday. Was the
observation made by Senator Tañada that what was submitted to the Senate
was not the agreement on establishing the World Trade Organization by
the final act of the Uruguay Round which is not the same as the
agreement establishing the World Trade Organization? And on that basis,
Senator Tolentino raised a point of order which, however, he agreed to
withdraw upon understanding that his suggestion for an alternative
solution at that time was acceptable. That suggestion was to treat the
proceedings of the Committee as being in the nature of briefings for
Senators until the question of the submission could be clarified.
And so, Secretary Romulo, in effect, is the President
submitting a new . . . is he making a new submission which improves on
the clarity of the first submission?
MR. ROMULO: Mr. Chairman, to make sure that it is
clear cut and there should be no misunderstanding, it was his intention
to clarify all matters by giving this letter.
THE CHAIRMAN: Thank you.
Can this Committee hear from Senator Tañada and later
on Senator Tolentino since they were the ones that raised this question
yesterday?
Senator Tañada, please.
SEN. TAÑADA: Thank you, Mr. Chairman.
Based on what Secretary Romulo has read, it
would now clearly appear that what is being submitted to the Senate for
ratification is not the Final Act of the Uruguay Round, but rather the
Agreement on the World Trade Organization as well as the Ministerial
Declarations and Decisions, and the Understanding and Commitments in
Financial Services.
I am now satisfied with the wording of the new submission of President Ramos.
SEN. TAÑADA. . . . of President Ramos, Mr. Chairman.
THE CHAIRMAN. Thank you, Senator Tañada. Can we hear
from Senator Tolentino? And after him Senator Neptali Gonzales and
Senator Lina.
SEN. TOLENTINO, Mr. Chairman,
I have not seen the new submission actually transmitted to us but I saw
the draft of his earlier, and I think it now complies with the
provisions of the Constitution, and with the Final Act itself .
The Constitution does not require us to ratify the Final Act. It
requires us to ratify the Agreement which is now being submitted. The
Final Act itself specifies what is going to be submitted to with the
governments of the participants.
In paragraph 2 of the Final Act, we read and I quote:
By signing the present Final Act, the representatives agree:
(a) to submit as appropriate the WTO Agreement for the consideration of
the respective competent authorities with a view to seeking approval of
the Agreement in accordance with their procedures.
In other words, it is not the Final Act
that was agreed to be submitted to the governments for ratification or
acceptance as whatever their constitutional procedures may provide but
it is the World Trade Organization Agreement. And if that is the one that is being submitted now, I think it satisfies both the Constitution and the Final Act itself .
Thank you, Mr. Chairman.
THE CHAIRMAN. Thank you, Senator Tolentino, May I call on Senator Gonzales.
SEN. GONZALES. Mr. Chairman, my views on this matter are already a matter of record. And they had been adequately reflected in the journal of yesterday's session and I don't see any need for repeating the same.
Now, I would consider the new submission as an act ex abudante cautela.
THE CHAIRMAN. Thank you, Senator Gonzales. Senator Lina, do you want to make any comment on this?
SEN. LINA. Mr. President, I agree with the observation just made by Senator Gonzales out of the abundance of question. Then the new submission is, I believe, stating the obvious and therefore I have no further comment to make.
Epilogue
In
praying for the nullification of the Philippine ratification of the WTO
Agreement, petitioners are invoking this Court's constitutionally
imposed duty "to determine whether or not there has been grave abuse of
discretion amounting to lack or excess of jurisdiction" on the part of
the Senate in giving its concurrence therein via Senate Resolution No.
97. Procedurally, a writ of certiorari grounded on grave abuse of
discretion may be issued by the Court under Rule 65 of the Rules of
Court when it is amply shown that petitioners have no other plain,
speedy and adequate remedy in the ordinary course of law.
By grave
abuse of discretion is meant such capricious and whimsical exercise of
judgment as is equivalent to lack of jurisdiction. 61 Mere abuse of discretion is not enough. It must be grave
abuse of discretion as when the power is exercised in an arbitrary or
despotic manner by reason of passion or personal hostility, and must be
so patent and so gross as to amount to an evasion of a positive duty or
to a virtual refusal to perform the duty enjoined or to act at all in
contemplation of law. 62 Failure on the part of the petitioner to show grave abuse of discretion will result in the dismissal of the petition. 63
In
rendering this Decision, this Court never forgets that the Senate,
whose act is under review, is one of two sovereign houses of Congress
and is thus entitled to great respect in its actions. It is itself a
constitutional body independent and coordinate, and thus its actions are
presumed regular and done in good faith. Unless convincing proof and
persuasive arguments are presented to overthrow such presumptions, this
Court will resolve every doubt in its favor. Using the foregoing
well-accepted definition of grave abuse of discretion and the
presumption of regularity in the Senate's processes, this Court cannot
find any cogent reason to impute grave abuse of discretion to the
Senate's exercise of its power of concurrence in the WTO Agreement
granted it by Sec. 21 of Article VII of the Constitution. 64
It is
true, as alleged by petitioners, that broad constitutional principles
require the State to develop an independent national economy effectively
controlled by Filipinos; and to protect and/or prefer Filipino labor,
products, domestic materials and locally produced goods. But it is
equally true that such principles — while serving as judicial and
legislative guides — are not in themselves sources of causes of action.
Moreover, there are other equally fundamental constitutional principles
relied upon by the Senate which mandate the pursuit of a "trade policy
that serves the general welfare and utilizes all forms and arrangements
of exchange on the basis of equality and reciprocity" and the promotion
of industries "which are competitive in both domestic and foreign
markets," thereby justifying its acceptance of said treaty. So too, the
alleged impairment of sovereignty in the exercise of legislative and
judicial powers is balanced by the adoption of the generally accepted
principles of international law as part of the law of the land and the
adherence of the Constitution to the policy of cooperation and amity
with all nations.
That the Senate, after deliberation and voting,
voluntarily and overwhelmingly gave its consent to the WTO Agreement
thereby making it "a part of the law of the land" is a legitimate
exercise of its sovereign duty and power. We find no "patent and gross"
arbitrariness or despotism "by reason of passion or personal hostility"
in such exercise. It is not impossible to surmise that this Court, or at
least some of its members, may even agree with petitioners that it is
more advantageous to the national interest to strike down Senate
Resolution No. 97. But that is not a legal reason to attribute
grave abuse of discretion to the Senate and to nullify its decision. To
do so would constitute grave abuse in the exercise of our own judicial
power and duty. Ineludably, what the Senate did was a valid exercise of
its authority. As to whether such exercise was wise, beneficial or
viable is outside the realm of judicial inquiry and review. That is a
matter between the elected policy makers and the people. As to whether
the nation should join the worldwide march toward trade liberalization
and economic globalization is a matter that our people should determine
in electing their policy makers. After all, the WTO Agreement allows
withdrawal of membership, should this be the political desire of a
member.
The eminent futurist John Naisbitt, author of the best seller Megatrends, predicts an Asian Renaissance 65
where "the East will become the dominant region of the world
economically, politically and culturally in the next century." He refers
to the "free market" espoused by WTO as the "catalyst" in this coming
Asian ascendancy. There are at present about 31 countries including
China, Russia and Saudi Arabia negotiating for membership in the WTO.
Notwithstanding objections against possible limitations on national
sovereignty, the WTO remains as the only viable structure for
multilateral trading and the veritable forum for the development of
international trade law. The alternative to WTO is isolation,
stagnation, if not economic self-destruction. Duly enriched with
original membership, keenly aware of the advantages and disadvantages of
globalization with its on-line experience, and endowed with a vision of
the future, the Philippines now straddles the crossroads of an
international strategy for economic prosperity and stability in the new
millennium. Let the people, through their duly authorized elected
officers, make their free choice.
WHEREFORE, the petition is DISMISSED for lack of merit.
SO ORDERED.
Narvasa, C.J., Regalado, Davide, Jr., Romero,
Bellosillo, Melo, Puno, Kapunan, Mendoza, Francisco, Hermosisima, Jr.
and Torres, Jr., JJ., concur.
Padilla and Vitug, JJ., concur in the result.
Footnotes
1947 The birth of GATT. On 30 October 1947, the
General Agreement on Tariffs and Trade (GATT) was signed by 23 nations
at the Palais des Nations in Geneva. The Agreement contained tariff
concessions agreed to in the first multilateral trade negotiations and a
set of rules designed to prevent these concessions from being
frustrated by restrictive trade measures.
The 23 founding contracting parties were members of
the Preparatory Committee established by the United Nations Economic and
Social Council in 1946 to draft the charter of the International Trade
Organization (ITO). The ITO was envisaged as the final leg of a triad of
post-War economic agencies (the other two were the International
Monetary Fund and the International Bank for Reconstruction — later the
World Bank).
In parallel with this task, the Committee members
decided to negotiate tariff concessions among themselves. From April to
October 1947, the participants completed some 123 negotiations and
established 20 schedules containing the tariff reductions and bindings
which became an integral part of GATT. These schedules resulting from
the first Round covered some 45,000 tariff concessions and about $10
billion in trade.
GATT was conceived as an interim measure that put
into effect the commercial-policy provisions of the ITO. In November,
delegations from 56 countries met in Havana, Cuba, to consider the to
ITO draft as a whole. After long and difficult negotiations, some 53
countries signed the Final Act authenticating the text of the Havana
Charter in March 1948. There was no commitment, however, from
governments to ratification and, in the end, the ITO was stillborn,
leaving GATT as the only international instrument governing the conduct
of world trade.
1948 Entry into force. On 1 January 1948, GATT
entered into force. The 23 founding members were: Australia, Belgium,
Brazil, Burma, Canada, Ceylon, Chile, China, Cuba, Czechoslovakia,
France, India, Lebanon, Luxembourg, Netherlands, New Zealand, Norway,
Pakistan, Southern Rhodesia, Syria, South Africa, United Kingdom and the
United States. The first Session of the Contracting Parties was held
from February to March in Havana, Cuba. The secretariat of the Interim
Commission for the ITO, which served as the ad hoc secretariat of
GATT, moved from Lake Placid, New York, to Geneva. The Contracting
Parties held their second session in Geneva from August to September.
1949 Second Round at Annecy. During the second Round
of trade negotiations, held from April to August at Annecy, France, the
contracting parties exchanged some 5,000 tariff concessions. At their
third Session, they also dealt with the accession of ten more countries.
1950 Third Round at Torquay. From September 1950 to
April 1951, the contracting parties exchanged some 8,700 tariff
concessions in the English town, yielding tariff reduction of about 25
per cent in relation to the 1948 level. Four more countries acceded to
GATT. During the fifth Session of the Contracting Parties, the United
States indicated that the ITO Charter would not be re-submitted to the
US Congress; this, in effect, meant that ITO would not come into
operation.
1956 Fourth Round at Geneva. The fourth Round was
completed in May and produced some $2.5 billion worth of tariff
reductions. At the beginning of the year, the GATT commercial policy
course for officials of developing countries was inaugurated.
1958 The Haberler Report. GATT published Trends in International Trade
in October. Known as the "Haberler Report" in honour of Professor
Gottfried Haberler, the chairman of the panel of eminent economists, it
provided initial guidelines for the work of GATT. The Contracting
Parties at their 13th Sessions, attended by Ministers, subsequently
established three committees in GATT: Committee I to convene a further
tariff negotiating conference; Committee II to review the agricultural
policies of member governments and Committee III to tackle the problem
facing developing countries in their trade. The establishment of the
European Economic Community during the previous year also demanded
large-scale tariff negotiations under Article XXIV: 6 of the General
Agreement.
1960 The Dillon Round. The fifth Round opened in
September and was divided into two phases: the first was concerned with
negotiations with EEC member states for the creation of a single
schedule of concessions for the Community based on its Common External
Tariff; and the second was a further general round of tariff
negotiations. Named in honour of US Under-Secretary of State Douglas
Dillon who proposed the negotiations, the Round was concluded in July
1962 and resulted in about 4,400 tariff concessions covering $4.9
billion of trade.
1961 The Short-Term Arrangement covering cotton
textiles was agreed as an exception to the GATT rules. The arrangement
permitted the negotiation of quota restrictions affecting the exports of
cotton-producing countries. In 1962 the "Short Term" Arrangement became
the "Long term" Arrangement, lasting until 1974 when the Multifibre
Arrangement entered into force.
1964 The Kennedy Round. Meeting at Ministerial level,
a Trade Negotiations Committee formally opened the Kennedy Round in
May. In June 1967, the Round's Final Act was signed by some 50
participating countries which together accounted for 75 per cent of
world trade. For the first time, negotiations departed from the
product-by-product approach used in the previous Rounds to an
across-the-board or linear method of cutting tariffs for industrial
goods. The working hypothesis of a 50 per cent target cut in tariff
levels was achieved in many areas. Concessions covered an estimated
total value of trade of about $410 billion. Separate agreements were
reached on grains, chemical products and a Code on Anti-Dumping.
1965 A New Chapter. The early 1960s marked the
accession to the general Agreement of many newly-independent developing
countries. In February, the Contracting Parties, meeting in a special
session, adopted the text of Part IV on Trade and Development. The
additional chapter to the GATT required developed countries to accord
high priority to the reduction of trade barriers to products of
developing countries. A Committee on Trade and Development was
established to oversee the functioning of the new GATT provisions. In
the preceding year, GATT had established the International Trade Centre
(ITC) to help developing countries in trade promotion and identification
of potential markets. Since 1968, the ITC had been jointly operated by
GATT and the UN Conference on Trade and Development (UNCTAD).
1973 The Tokyo Round. The seventh Round was launched
by Ministers in September at the Japanese capital. Some 99 countries
participated in negotiating a comprehensive body of agreements covering
both tariff and non-tariff matters. At the end of the Round in November
1979, participants exchanged tariff reductions and bindings which
covered more than $300 billion of trade. As a result of these cuts, the
weighted average tariff on manufactured goods in the world's nine major
industrial markets declined from 7.0 to 4.7 per cent. Agreements were
reached in the following areas: subsidies and countervailing measures,
technical barriers to trade, import licensing procedures, government
procurement, customs valuation, a revised anti-dumping code, trade in
bovine meat, trade in dairy products and trade in civil aircraft. The
first concrete result of the Round was the reduction of import duties
and other trade barriers by industrial countries on tropical products
exported by developing countries.
1974 On 1 January 1974, the Arrangement Regarding
International Trade in Textiles, otherwise known as the Multifibre
Arrangement (MFA), entered into force. It superseded the arrangements
that had been governing trade in cotton textiles since 1961. The MFA
seeks to promote the expansion and progressive liberalization of trade
in textile products while at the same time avoiding disruptive effects
in individual markets and lines of production. The MFA was extended in
1978, 1982, 1986, 1991 and 1992. MFA members account for most of the
world exports of textiles and clothing which in 1986 amounted to US$128
billion.
1982 Ministerial Meeting. Meeting for the first time
in nearly ten years, the GATT Ministers in November at Geneva reaffirmed
the validity of GATT rules for the conduct of international trade and
committed themselves to combating protectionist pressures. They also
established a wide-ranging work programme for the GATT which was to lay
down the groundwork for a new Round 1986. The Uruguay Round. The GATT
Trade Ministers meeting at Punta del Este, Uruguay, launched the eighth
Round of trade negotiations on 20 September. The Punta del Este
Declaration, while representing a single political undertaking, was
divided into two sections. The first covered negotiations on trade in
goods and the second initiated negotiation on trade in services. In the
area of trade in goods, the Ministers committed themselves to a
"standstill" on new trade measures inconsistent with their GATT
obligations and to a "rollback" programme aimed at phasing out existing
inconsistent measures. Envisaged to last four years, negotiations
started in early February 1987 in the following areas tariffs,
non-tariff measures, tropical products, natural resource-based products,
textiles and clothing, agriculture, subsidies, safe-guards,
trade-related aspects of intellectual property rights including trade in
counterfeit goods, and trade-related investment measures. The work of
other groups included a review of GATT articles, the GATT dispute
settlement procedure, the Tokyo Round agreements, as well as the
functioning of the GATT system as a whole.
1994 "GATT 1994" is the updated version of GATT 1947
and takes into account the substantive and institutional changes
negotiated in the Uruguay Round GATT 1994 is an integral part of the
World Trade Organization established on 1 January 1995. It is agreed
that there be a one year transition period during which certain GATT
1947 bodies and commitments would co-exist with those of the World Trade
Organization.
2 The Final Act was signed by representatives of 125
entities, namely Algeria, Angola, Antigua and Barbuda, Argentine
Republic, Australia, Republic of Austria, State of Bahrain, People's
Republic of Bangladesh, Barbados, The Kingdom of Belgium Belize,
Republic of Benin, Bolivia, Botswana, Brazil, Brunei Darussalam, Burkina
Faso, Burundi, Cameroon, Canada, Central African Republic, Chad, Chile,
People's Republic of China, Colombia, Congo, Costa Rica, Republic of
Cote d'Ivoire, Cuba, Cyprus, Czech Republic, Kingdom of Denmark,
Commonwealth of Dominica, Dominican Republic, Arab Republic of Egypt, El
Salvador, European Communities, Republic of Fiji, Finland, French
Republic, Gabonese Republic, Gambia, Federal Republic of Germany, Ghana,
Hellenic Republic, Grenada, Guatemala, Republic of Guinea-Bissau,
Republic of Guyana, Haiti, Honduras, Hong Kong, Hungary, Iceland, India,
Indonesia, Ireland, State of Israel, Italian Republic, Jamaica, Japan,
Kenya, Korea, State of Kuwait, Kingdom of Lesotho, Principality of
Liechtenstein, Grand Duchy of Luxembourg, Macau, Republic of Madagascar,
Republic of Malawi, Malaysia, Republic of Maldives, Republic of Mali,
Republic of Malta, Islamic Republic of Mauritania, Republic of
Mauritius, United Mexican States, Kingdom of Morocco, Republic of
Mozambique, Union of Myanmar, Republic of Namibia, Kingdom of the
Netherlands, New Zealand, Nicaragua, Republic of Niger, Federal Republic
of Nigeria, Kingdom of Norway, Islamic Republic of Pakistan, Paraguay,
Peru, Philippines, Poland, Potuguese Republic, State of Qatar, Romania,
Rwandese Republic, Saint Kitts and Nevis, Saint Lucia, Saint Vincent and
the Grenadines, Senegal, Sierra Leone, Singapore, Slovak Republic,
South Africa, Kingdom of Spain, Democratic Socialist Republic of Sri
Lanka, Republic of Surinam, Kingdom of Swaziland, Kingdom of Sweden,
Swiss Confederation, United Republic of Tanzania, Kingdom of Thailand,
Togolese Republic, Republic of Trinidad and Tobago, Tunisia, Turkey,
Uganda, United Arab Emirates, United Kingdom of Great Britain and
Northern Ireland, United States of America, Eastern Republic of Uruguay,
Venezuela, Republic of Zaire, Republic of Zambia, Republic of Zimbabwe;
see pp. 6-25, Vol. 1, Uruguay Round of Multilateral Trade Negotiations.
3 11 August 1994
The Honorable Members
Senate
Through Senate President Edgardo Angara
Manila
Ladies and Gentlemen:
I have the honor to forward herewith an authenticated
copy of the Uruguay Round Final Act signed by Department of Trade and
Industry Secretary Rizalino S. Navarro for the Philippines on 15 April
1994 in Marrakesh, Morocco.
The Uruguay Round Final Act aims to liberalize and
expand world trade and strengthen the interrelationship between trade
and economic policies affecting growth and development.
The Final Act will improve Philippine access to
foreign markets, especially its major trading partners through the
reduction of tariffs on its exports particularly agricultural and
industrial products. These concessions may be availed of by the
Philippines, only if it is a member of the World Trade Organization. By
GATT estimates, the Philippines can acquire additional export from $2.2
to $2.7 Billion annually under Uruguay Round. This will be on top of the
normal increase in exports that the Philippines may experience.
The Final Act will also open up new opportunities for
the services sector in such areas as the movement of personnel, (e.g.
professional services and construction services), cross-border supply
(e.g. computer-related services), consumption abroad (e.g. tourism,
convention services, etc.) and commercial presence.
The clarified and improved rules and disciplines on
anti-dumping and countervailing measures will also benefit Philippine
exporters by reducing the costs ad uncertainty associated with exporting
while at the same time providing means for domestic industries to
safeguard themselves against unfair imports.
Likewise, the provision of adequate protection for
intellectual property rights is expected to attract more investments
into the country and to make it less vulnerable to unilateral actions by
its trading partners (e.g. Sec. 301 of the United States' Omnibus Trade
Law).
In view of the foregoing, the Uruguay Round Final Act
is hereby submitted to the Senate for its concurrence pursuant to
Section 21, Article VII of the Constitution.
A draft of a proposed Resolution giving its concurrence to the aforesaid Agreement is enclosed.
Very truly yours,
(SGD.) FIDEL V. RAMOS
4 11 August 1994
The Honorable Members
Senate
Through Senate President Edgardo Angara
Manila
Ladies and Gentlemen:
I have the honor to forward herewith an authenticated
copy of the Uruguay Round Final Act signed by Department of Trade and
Industry Secretary Rizalino S. Navarro for the Philippines on 13 April
1994 in Marrakech (sic), Morocco.
Members of the trade negotiations committee, which
included the Philippines, agreed that the Agreement Establishing the
World Trade Organization, the Ministerial Declarations and Decisions,
and the Understanding on Commitments in Financial Services embody the
results of their negotiations and form an integral part of the Uruguay
Round Final Act.
By signing the Uruguay Round Final Act, the Philippines, through Secretary Navarro, agreed:
(a) To submit the Agreement Establishing the World
Trade Organization to the Senate for its concurrence pursuant to Section
21, Article VII of the Constitution; and
(b) To adopt the Ministerial Declarations and Decisions.
The Uruguay Round Final Act aims to liberalize and
expand world trade and strengthen the interrelationship between trade
and economic policies affecting growth and development.
The Final Act will improve Philippine access to
foreign markets, especially its major trading partners through the
reduction of tariffs on its exports particularly agricultural and
industrial products. These concessions may be availed of by the
Philippines, only if it is a member of the World Trade Organization. By
GATT estimates, the Philippines can acquire additional export revenues
from $2.2 to $2.7 Billion annually under Uruguay Round. This will be on
top of the normal increase in the exports that the Philippines may
experience.
The Final Act will also open up new opportunities for
the services sector in such areas as the movement of personnel, (e.g.,
professional services and construction services), cross-border supply
(e.g., computer-related services), consumption abroad (e.g., tourism,
convention services, etc.) and commercial presence.
The clarified and improved rules ad disciplines on
anti-dumping and countervailing measures will also benefit Philippine
exporters by reducing the costs and uncertainty associated with
exporting while at the same time providing a means for domestic
industries to safeguard themselves against unfair imports.
Likewise, the provision of adequate protection for
intellectual property rights is expected to attract more investments
into the country and to make it a less vulnerable to unilateral actions
by its trading partners (e.g., Sec. 301 of the United States Omnibus
Trade Law).
In view of the foregoing, the Uruguay Round Final
Act, the Agreement Establishing the World Trade Organization, the
Ministerial Declarations and Decisions, and the Understanding on
Commitments in Financial Services, as embodied in the Uruguay Round
Final Act and forming and integral part thereof are hereby submitted to
the Senate for its concurrence pursuant to Section 21, Article VII of
the Constitution.
A draft of a proposed Resolution giving its concurrence to the aforesaid Agreement is enclosed.
Very truly yours,
(SGD.) FIDEL V. RAMOS
5 December 9, 1994
HON. EDGARDO J. ANGARA
Senate President
Senate Manila
Dear Senate President Angara:
Pursuant to the provisions of Sec. 26 (2) Article VI
of the Constitution, I hereby certify to the necessity of the immediate
adoption of P.S. 1083 entitled:
to meet a public emergency consisting of the need for
immediate membership in the WTO in order to assure the benefits to the
Philippine economy arising from such membership.
Very truly yours,
(SGD.) FIDEL V. RAMOS
6 Attached as Annex A, Petition; rollo, p. 52.
P.S. 1083 is the forerunner of assailed Senate Resolution No. 97. It
was prepared by the Committee of the Whole on the General Agreement on
Tariffs and Trade chaired by Sen. Blas F. Ople and co-chaired by Sen.
Gloria Macapagal-Arroyo; see Annex C, Compliance of petitioners dated January 28, 1997.
7 The Philippines is thus considered an original or founding member
of WTO, which as of July 26, 1996 had 123 members as follows: Antigua
and Barbuda, Argentina, Australia, Austria, Bahrain, Bangladesh,
Barbados, Belguim, Belize, Benin, Bolivia, Botswana, Brazil, Brunei
Darussalam, Burkina Faso, Burundi, Cameroon, Canada, Central African
Republic, Chili, Colombia, Costa Rica, Cote d'Ivoire, Cuba, Cyprus,
Czech Republic, Denmark, Djibouti, Dominica, Dominican Republic,
Ecuador, Egypt, El Salvador, European Community, Fiji, Finland, France,
Gabon, Germany, Ghana, Greece, Grenada, Guatemala, Guinea, Guinea
Bissau, Guyana, Haiti, Honduras, Honkong, Hungary, Iceland, India,
Indonesia, Ireland, Israel, Italy, Jamaica, Japan, Kenya, Korea, Kuwait,
Lesotho, Liechtenstein, Luxembourg, Macau, Madagascar, Malawi,
Malaysia, Maldives, Mali, Malta, Mauritania, Mauritius, Mexico, Morocco,
Mozambique, Myanmar, Namibia, Netherlands — for the Kingdom in Europe
and for the Netherlands Antilles, New Zealand, Nicaragua, Nigeria,
Norway, Pakistan, Papua New Guinea, Paraguay, Peru, Philippines, Poland,
Portugal, Qatar, Romania, Rwanda, Saint Kitts and Nevis, Saint Lucia,
Saint Vincent & the Grenadines, Senegal, Sierra Leone, Singapore,
Slovak Republic, Slovenia, Solomon Islands, South Africa, Spain, Sri
Lanka, Surinam, Swaziland, Sweden, Switzerland, Tanzania, Thailand,
Togo, Trinidad and Tobago, Tunisia, Turkey, Uganda, United Arab
Emirates, United Kingdom, United States, Uruguay, Venezuela, Zambia, and
Zimbabwe. See Annex A, Bautista Paper, infra.8 Page 6; rollo p. 261.
9 In compliance, Ambassador Bautista submitted to the Court on August 12, 1996, a Memorandum (the "Bautista Paper") consisting of 56 pages excluding annexes. This is the same document mentioned in footnote no. 1.
10 Memorandum for Respondents, p. 13; rollo, p. 268.
11 Cf . Kilosbayan Incorporated vs. Morato, 246 SCRA 540, July 17, 1995 for a discussion on locus standi. See also the Concurring Opinion of Mr. Justice Vicente V. Mendoza in Tatad vs. Garcia, Jr., 243 SCRA 473, April 6, 1995, as well as Kilusang Mayo Uno Labor Center vs. Garcia, Jr., 239 SCRA 386, 414, December 23, 1994.
12 Aquino, Jr. vs. Ponce Enrile, 59 SCRA 183, 196, September 17, 1974, cited in Bondoc vs. Pineda, 201 SCRA 792, 795, September 26, 1991.
13 Guingona, Jr. vs. Gonzales, 219 SCRA 326, 337, March 1, 1993.
14 See Tañada and Macapagal vs. Cuenco, et al., 103 Phil. 1051 for a discussion on the scope of "political question."
15 Section 1, Article VIII, (par. 2).
16 In a privilege speech on May 17, 1993, entitled "Supreme Court — Potential Tyrant?" Senator Arturo Tolentino concedes that this new provision gives the Supreme Court a duty "to intrude into the jurisdiction of the Congress or the President."
17 I Record of the Constitutional Commission 436.
18 Cf . Daza vs. Singson, 180 SCRA 496, December 21, 1989.
19 Memorandum for Petitioners, pp. 14-16; rollo, pp. 204-206.
20 Par. 4, Article XVI, WTO Agreement, Uruguay Round of Multilateral Trade Negotiations, Vol. 1. p. 146.
21 Also entitled "Declaration of Principles." The nomenclature in the 1973 Charter is identical with that in the 1987's.
22 Philippine Political Law, 1962 Ed., p. 116.
23 Bernas, The Constitution of the Philippines: A Commentary, Vol. II, 1988 Ed., p. 2. In the very recent case of Manila Prince Hotel v. GSIS, G.R. No. 122156, February 3, 1997, p. 8, it was held that "A provision which lays down a general principle, such as those found in Art. II of the 1987 Constitution, is usually not self-executing."
24 246 SCRA 540, 564, July 17, 1995. See also Tolentino vs. Secretary of Finance, G.R. No. 115455 and consolidated cases, August 25, 1995.
25 197 SCRA 52, 68, May 14, 1991.
26 224 SCRA 792, 817, July 30, 1993.
27 Sec. 10, Article XII.
28 Sec. 12, Article XII.
29 Sec. 19, Art. II.
30 Sec. 13, Art. XII.
31 G.R. No. 122156, February 3, 1997, pp. 13-14.
32 Sec. 1, Art. XII.
33 Bautista Paper, p. 19.
34 Preamble, WTO Agreement p. 137, Vol. 1, Uruguay Round of Multilateral Trade Negotiations. Emphasis supplied.
35 Sec. 19, Article II, Constitution.
36 III Records of the Constitutional Commission 252.
37 Sec. 13, Article XII, Constitution.
38 Justice Isagani A. Cruz, Philippine Political Law, 1995 Ed., p. 13, quoting his own article entitled, "A Quintessential Constitution" earlier published in the San Beda Law Journal, April 1972; emphasis supplied.
39 Par. 4, Article XVI (Miscellaneous Provisions), WTO Agreement, p. 146, Vol. 1, Uruguay Round of Multilateral Trade Negotiations.
40 Memorandum for the Petitioners, p. 29; rollo, p. 219.
41 Sec. 24, Article VI, Constitution.
42 Subsection (2), Sec. 28, Article VI, Constitution.
43 Sec. 2, Article II, Constitution.
44 Cruz, Philippine Political Law, 1995 Ed., p. 55.
45 Salonga and Yap, op cit 305.
46 Salonga, op. cit., p. 287.
47 Quoted in Paras and Paras, Jr., International Law and World Politics, 1994 Ed., p. 178.
47-A Reagan vs. Commission of Internal Revenue, 30 SCRA 968, 973, December 27, 1969.
48 Trebilcock and Howse. The Regulation of International Trade, p. 14, London, 1995, cited on p. 55-56, Bautista Paper.
49 Uruguay Round of Multilateral Trade Negotiations, Vol. 31, p. 25445.
50 Item 5, Sec. 5, Article VIII, Constitution.
51 Uruguay Round of Multilateral Trade Negotiations, Vol. 31, p. 25445.
52 Bautista Paper, p. 13.
53 See footnote 3 of the text of this letter.
54 Salonga and Yap, op cit., pp. 289-290.
55 The full text, without the signatures, of the Final Act is as follows:
Final Act Embodying the Results of the
Uruguay Round of Multilateral Trade Negotiations
1. Having met in order to conclude the Uruguay Round
of Multilateral Trade Negotiations, representatives of the governments
and of the European Communities, members of the Trade Negotiations
Committee, agree that the Agreement Establishing the World Trade
Organization (referred to in the Final Act as the "WTO Agreement"), the
Ministerial Declarations and Decisions, and the Understanding on
Commitments in Financial Services, as annexed hereto, embody the results
of their negotiations and form an integral part of this Final Act.
2. By signing to the present Final Act, the representatives agree.
(b) to adopt the Ministerial Declarations and Decisions.
4. the representatives agree that the WTO Agreement shall be open for acceptance as a whole, by signature or otherwise, by all participants pursuant to Article XIV thereof. The acceptance and entry into force of a Plurilateral Trade Agreement included in Annex 4 of the WTO Agreement shall be governed by the provisions of that Plurilateral Trade Agreement.
5. Before accepting the WTO Agreement, participants which are not contracting parties to the General Agreement on Tariffs and Trade must first have concluded negotiations for their accession to the General Agreement and become contracting parties thereto. For participants which are not contracting parties to the general Agreement as of the date of the Final Act, the Schedules are not definitive and shall be subsequently completed for the purpose of their accession to the General Agreement and acceptance of the WTO Agreement.
6. This Final Act and the texts annexed hereto shall be deposited with the Director-General to the CONTRACTING PARTIES to the General Agreement on Tariffs and Trade who shall promptly furnish to each participant a certified copy thereof.
DONE at Marrakesh this fifteenth day of April one thousand nine hundred and ninety-four, in a single copy, in the English, French and Spanish languages, each text being authentic.
56 Bautista Paper, p. 16.
57 Baustista Paper, p. 16.58 Uruguay Round of Multilateral Trade Negotiations, Vol. I, pp. 137-138.
59 See footnote 3 for complete text.
60 Taken from pp. 63-85, "Respondent" Memorandum.
61 Zarate vs. Olegario, G.R. No. 90655, October 7, 1996.
62 San Sebastian College vs. Court of Appeals, 197 SCRA 138, 144, May 15, 1991; Commissioner of Internal Revenue vs. Court of Tax Appeals, 195 SCRA 444, 458 March 20, 1991; Simon vs. Civil Service Commission, 215 SCRA 410, November 5, 1992; Bustamante vs. Commissioner on Audit, 216 SCRA 134, 136, November 27, 1992.
63 Paredes vs. Civil Service Commission, 192 SCRA 84, 94, December 4, 1990.
64 Sec. 21. No treaty or international agreement shall be valid and effective unless concurred in by at least two-thirds of all the Members of the Senate."
65 Reader's Digest, December 1996 issue, p. 28.
No comments:
Post a Comment