[272 SCRA 18,
May 2, 1997]
Facts:
Petitioner
sought to have the agreement to join the World Trade Organization
(WTO) declared unconstitutional on the grounds that: “(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..”
Issues:
Whether or not the
petition presents a justiciable controversy or involves a political
question.
Whether or not the
provisions of the Agreement contravene Sec. 19, Art II and Secs. 10
and 12, Art. XII, of the Philippine Constitution.
Whether or not the
Provisions unduly impair or interfere with Legislative Power.
Whether or not the
Provisions unduly impair or interfere with Judicial Power.
Whether or
not the Concurrence of the Senate with the WTO Agreement and its
Annexes sufficient and/or valid.
Held:
Justiciable Controversy
There
is a justiciable controversy. A part of the Court.s decision reads:
“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.”
Contravention
of the Constitution
The
Court held that there was no contravention of the Constitution since
Art. II or the Declaration of Principles and State Policies is not
self-executory. Secs. 10 and 12, Art. XII, on the other hand, the
Court said:
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.
The
Court further stated that the WTO comes with safeguards to protect
weaker economies and that the Constitution does not rule out foreign
competition
The
WTO Agreement and Legislative Power
The court held that:
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.”
The
WTO Agreement and Judicial Power
A
portion of the decision reads:
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.
Validity of the Concurrence of the Senate with the WTO Agreement
and its Annexes
Excerpts from the decision read:
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 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.”
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
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.” [Footnotes Omitted]
Disposition:
Petition
was denied.
Memorandum
of Ambassador Lilia Bautista
Ambassador
Bautista submitted a memorandum as amicus curiae which contained a
chronology of the GATT reproduced as follows:
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.
