01. tanada vs. angara

7/17/2015 SUPREMECOURTREPORTSANNOTATEDVOLUME272

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18 SUPREME COURT REPORTS ANNOTATEDTaada vs. Angara

G.R. No. 118295. May 2, 1997.*

WIGBERTO E. TAADA and ANNA DOMINIQUECOSETENG, as members of the Philippine Senate and astaxpayers GREGORIO ANDOLANA and JOKERARROYO as members of the House of Representatives andas taxpayers NICANOR P. PERLAS and HORACIO R.MORALES, both as taxpayers CIVIL LIBERTIES UNION,NATIONAL ECONOMIC PROTECTIONISMASSOCIATION, CENTER FOR ALTERNATIVEDEVELOPMENT INITIATIVES, LIKASKAYANGKAUNLARAN FOUNDATION, INC., PHILIPPINERURAL RECONSTRUCTION MOVEMENT,DEMOKRATIKONG KILUSAN NG MAGBUBUKID NGPILIPINAS, INC., and PHILIPPINE PEASANTINSTITUTE, in representation of various taxpayers and asnongovernmental organizations, petitioners, vs.EDGARDO ANGARA, ALBERTO ROMULO, LETICIARAMOSSHAHANI, HEHERSON ALVAREZ, AGAPITOAQUINO, RODOLFO BIAZON, NEPTALI

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* EN BANC.

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VOL. 272, MAY 2, 1997 19Taada vs. Angara

GONZALES, ERNESTO HERRERA, JOSE LINA, GLORIAMACAPAGALARROYO, ORLANDO MERCADO, BLASOPLE, JOHN OSMEA, SANTANINA RASUL, RAMON



REVILLA, RAUL ROCO, FRANCISCO TATAD andFREDDIE WEBB, in their respective capacities asmembers of the Philippine Senate who concurred in theratification by the President of the Philippines of theAgreement Establishing the World Trade OrganizationSALVADOR ENRIQUEZ, in his capacity as Secretary ofBudget and Management CARIDAD VALDEHUESA, inher capacity as National Treasurer RIZALINONAVARRO, in his capacity as Secretary of Trade andIndustry ROBERTO SEBASTIAN, in his capacity asSecretary of Agriculture ROBERTO DE OCAMPO, in hiscapacity as Secretary of Finance ROBERTO ROMULO, inhis capacity as Secretary of Foreign Affairs andTEOFISTO T. GUINGONA, in his capacity as ExecutiveSecretary, respondents.

Constitutional Law Judicial Review Separation of PowersWhere an action of the legislative branch is seriously alleged tohave infringed the Constitution, it becom es not only the right butin fact the duty of the judiciary to settle the dispute.In seeking tonullify an act of the Philippine Senate on the ground that itcontravenes the Constitution, the petition no doubt rais es ajusticiable controversy. Where an action of the legislative branchis seriously alleged to have infringed the Cons titution, it becomesnot only the right but in fact the duty of the judiciary to settle thedispute. The question thus posed is judicial rather than political.The duty (to adjudicate) remains to assure that the supremacy ofthe Constitution is upheld. Once a controvers y as to theapplication or interpretation of a constitutional provision is raisedbefore this Court (as in the instant case), it becomes a legal issuewhich the Court is bound by constitutional mandate to decide.

Same Same Actions Special Civil Actions Certiorari,prohibition and mandamus are appropriate remedies to raiseconstitutional issues and to review and/or prohibit/nullify, whenproper, acts of legislative and executive officials.As the petitionalleges grave abuse of discretion and as there is no other pl ain,speedy or adequate remedy in the ordinary course of law, we haveno hesitation at all in holding that this petition should be givendue course and the

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Taada vs. Angara

vital questions raised therein ruled upon under Rule 65 of theRules of Court. Indeed, certiorari, prohibition and mandamus areappropriate remedies to raise constitutional issues and to reviewand/or prohibit/nullify, when proper, acts of legislative andexecutive officials. On this, we have no equivocation.

Same Same Same Same In deciding to take jurisdictionover this petition, the Supreme Court does not review the wisdomof the decision of the President and the Senate in enlisting thecountry in the WTO, or pass upon the merits of trade liberalizationas a policy espoused by said international body, rather, it onlyexercises its constitutional duty to determine whether or not therehad been a grave abuse of discretion amounting to lack or excess ofjurisdiction on the part of the Senate in ratifying the WTOAgreement and its three annexes.We should stres s that, indeciding to take jurisdiction over this petition, this Court will notreview the wisdom of the decision of the President and the Senatein enlisting the country into the WTO, or pass upon the m erits oftrade liberalization as a policy espoused by said internationalbody. Neither will it rule on the propriety of the governmentseconomic policy of reducing/removing tariffs, taxes, subsidies,quantitative restrictions, and other import/trade barriers. Rather,it will only exercise its constitutional duty to determine whetheror not there had been a grave abuse of discretion amounting tolack or excess of jurisdiction on the part of the Senate in ratifyingthe WTO Agreement and its three annexes.

Same Constitutional Principles and State Policies Theprinciples and state policies enumerated in Article II and somesections of Article XII are not selfexecuting provisions, thedisregard of which can give rise to a cause of action in the courts.By its very title, Article II of the Constitution is a declarationof principles and state policies. The counterpart of this article inthe 1935 Constitution is called the bas ic political creed of thenation by Dean Vicente Sinco. These principles in Article II arenot intended to be selfexecuting principles ready for enforcementthrough the courts. They are used by the judiciary as aids or asguides in the exercise of its power of judicial review, and by thelegislature in its enactment of laws. As held in the leading case ofKilosbayan, Incorporated vs. Morato, the principles and statepolicies enumerated in Article II and some sections of Article XIIare not selfexecuting provis ions, the disregard of which can giverise to a cause of action in the courts. They do not embodyjudicially enforceable constitutional rights but guidelines for



legislation.

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Same Same Separation of Powers Due Process.Thereasons for denying a cause of action to an alleged infringement ofbroad constitutional principles are sourced from basicconsiderations of due process and the lack of judicial authority towade into the uncharted ocean of social and economic policymaking.

Same Same Trade Liberalization Filipino First PolicyWhile the Constitution indeed mandates a bias in favor of Filipinogoods, services, labor and enterprises, at the same time, itrecognizes the need for business exchange with the rest of the worldon the bases of equality and reciprocity and limits protection ofFilipino enterprises only against foreign competition and tradepractices that are unfairthe Constitution did not intend topursue an isolationist policy.All told, while the Constitutionindeed mandates a bias in favor of Filipino goods, services, laborand enterprises, at the same time, it recognizes the need forbusiness exchange with the rest of the world on the bases ofequality and reciprocity and limits protection of Filipinoenterprises only against foreign competition and trade practicesthat are unfair. In other words, the Constitution did not intend topursue an isolationist policy. It did not shut out foreigninvestments, goods and services in the development of thePhilippine economy. While the Constitution does not encouragethe unlimited entry of foreign goods, services and investmentsinto the country, it does not prohibit them either. In fact, it allowsan exchange on the basis of equality and reciprocity, frowningonly on foreign competition that is unfair.

Same Same Same Same World Trade Organization (WTO)General Agreement on Tariffs and Trade (GATT) There is hardlyany basis for the statement that under the WTO, local industriesand enterprises will all be wiped out and that Filipinos will bedeprived of control of the economy, for, quite to the contrary, theweaker situations of developing nations like the Philippines havebeen taken into account.Moreover, GATT itself has providedbuiltin protection from unfair foreign competition and tradepractices including antidumping measures, countervailing



measures and safeguards against import surges. Where localbusiness are jeopardized by unfair foreign competition, thePhilippines can avail of these measures. There is hardly thereforeany basis for the statement that under the WTO, local industriesand enterprises will all be wiped out and that Filipinos will bedeprived of control of the economy. Quite the contrary, the weakersituations of developin g na ti on s like the Philippines have beentaken into account thus, there would be no basis to say

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Taada vs. Angara

that in joining the WTO, the respondents have gravely abusedtheir discretion. True, they have made a bold decision to steer theship of state into the yet uncharted sea of economic liberalization.But such decision cannot be set aside on the ground of graveabuse of discretion, simply because we disagree with it or simplybecause we believe only in other economic policies. As earlierstated, the Court in taking jurisdiction of this case will not passupon the advantages and disadvantages of trade liberalization asan economic policy. It will only perform its constitutional duty ofdetermining whether the Senate committed grave abuse ofdiscretion.

Same Same Same Same Same Same The fundamentallaw encourages industries that are competitive in both domesticand foreign markets, thereby demonstrating a clear policy againsta sheltered domestic trade environment, but one in favor of thegradual developm ent of robust industries that can compete withthe best in the foreign markets.The WTO reliance on mostfavored nation, national treatment, and trade withoutdiscrimination cannot be struck down as unconstitutional as infact they are rules of equality and reciprocity that apply to allWTO members. Aside from envisioning a trade policy based onequality and reciprocity, the fundamental law encouragesindustries that are competitive in both domestic and foreignmarkets, thereby demonstrating a clear policy against asheltered domestic trade environment, but one in favor of thegradual development of robust industries that can compete withthe best in the foreign markets. Indeed, Filipino managers andFilipino enterprises have shown capability and tenacity to



compete internationally. And given a free trade environment,Filipino entrepreneurs and managers in Hongkong havedemonstrated the Filipino capacity to grow and to prosper againstthe best offered under a policy of laissez faire.

Same Same Same Same Same Same Political QuestionsThe responses to questions on whether WTO/GATT will favor thegeneral welfare of the public at large involve judgment calls byour policy makers, for which they are answerable to our peopleduring appropriate electoral exercisessuch questions and theanswers thereto are not subject to judicial pronouncements basedon grave abuse of discretion.Consequently, the question boilsdown to whether WTO/GATT will favor the general welfare of thepublic at large. Will adherence to the W TO treaty bring this ideal(of favoring the general welfare) to reality? Will WTO/GATTsucceed in promoting the Filipinos general welfare because it willas promised by its

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promotersexpand the countrys exports and generate moreemployment? Will it bring more prosperity, employment,purchasing power and quality products at the most reasonablerates to the Filipino public? The responses to these questionsinvolve judgment calls by our policy makers, for which they areanswerable to our people during appropriate electoral exercises.Such questions and the answers thereto are not subject to judicialpronouncements based on grave abuse of discretion.

Same It is to the credit of its drafters that the Constitutioncan withstand the assaults of bigots and infidels but at the sametime bend with the refreshing winds of change necessitated byunfolding events.It is not difficult to answer this question.Constitutions are designed to meet not only the vagaries ofcontemporary events. They should be interpreted to cover evenfuture and unknown circumstances. It is to the credit of itsdrafters that a Constitution can withstand the assaults of bigotsand infidels but at the same time bend with the refreshing windsof change necessitated by unfolding events. As one eminentpolitical law writer and respected jurist explains: TheConstitution must be quintessential rather than superficial, the



root and not the blossom, the base and framework only of theedifice that is yet to rise. It is but the core of the dream that musttake shape, not in a twinkling by mandate of our delegates, butslowly in the crucible of Filipino minds and hearts, where it willin time develop its sinews and gradually gather its strength andfinally achieve its substance. In fine, the Constitution cannot, likethe goddess Athena, rise fullgrown from the brow of theConstitutional Convention, nor can it conjure by mere fiat aninstant Utopia. It must grow with the society it seeks to restructure and march apace with the progress of the race, drawingfrom the vicissitudes of history the dynamism and vitality that willkeep it, far from becoming a petrified rule, a pulsing, living lawattuned to the heartbeat of the nation.

Same International Law While sovereignty has traditionallybeen deemed absolute and allencompassing on the domesticlevel, it is however subject to restrictions and limi tation s vol untari ly agreed to by the Philippines, expressly or impliedly, as amem ber of the family of nations.This Court notes andappreciates the ferocity and passion by which petitioners stressedtheir arguments on this issue. However, while sovereignty hastraditionally been deemed absolute and allencompassing on thedomestic level, it is however subject to restrictions and limitationsvoluntarily agreed to by the

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Philippines, expressly or impliedly, as a member of the family ofnations. Unquestionably, the Constitution did not envision ahermittype isolation of the country from the rest of the world.

Same Same Doctrine of I ncorporation Words and PhrasesBy the doctrine of incorporation, the country is bound by generallyaccepted principles of international law, which are consideredautomatically part of our own laws.In its Declaration ofPrinciples and State Policies, the Constitution adopts thegenerally accepted principles of international law as part of thelaw of the land, and adheres to the policy of peace, equality,justice, freedom, cooperation and amity, with all nations. By thedoctrine of incorporation, the country is bound by generallyaccepted principles of international law, which are considered to



be autom atically part of our own laws. One of the oldest and mostfundamental rules in international law is pacta sunt servandainternational agreements must be performed in good faith. Atreaty engagement is not a mere moral obligation but creates alegally binding obligation on the parties x x x. A state which hascontracted valid international obligations is bound to make in itslegislations such modifications as may be necessary to ensure thefulfillment of the obligations undertaken.

Same Same Treaties By their voluntary act, nations maysurrender some aspects of their state power in exchange for greaterbenefits granted by or derived from a convention or pact.By theirinherent nature, treaties really limit or restrict the absolutenessof sovereignty. By their voluntary act, nations may surrendersome aspects of their state power in exchange for greater benefitsgranted by or derived from a convention or pact. After all, states,like individuals, live with coequals, and in pursuit of mutuallycovenanted objectives and benefits, they also commonly agree tolimit the exercise of their otherwise absolute rights.

Same Same Same World Trade Organization Pleadingsand Practice Article 34 of the General Provisions and BasicPrinciples of the Agreement on TradeRelated Aspects ofIntellectual Property Rights (TRIPS) does not contain anunreasonable burden, consistent as it is with due process and theconcept of adversarial dispute settlement inherent in Philippinejudicial system.Petitioners aver that paragraph 1, Article 34 ofthe General Provisions and Basic Principles of the Agreement onT ra deRel a ted A s pects of Intellectual Property Rights (TRIPS)intrudes on the power of the Supreme Court to prom ulgate rulesconcerning pleading, practice and proce

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dures. x x x By and large, the arguments adduced in connectionwith our dis position of the third issuederogation of legislativepowerwill apply to this fourth issue also. Suffice it to say thatthe reciprocity clause more than justifies such intrusion, if anyactually exists. Besides, Article 34 does not contain anunreasonable burden, consistent as it is with due process and theconcept of adversarial dispute settlement inherent in our judicial



system. So too, since the Philippines is a signatory to mostinternational conventions on patents, trademarks and copyrights,the adjus tment in legislation and rules of procedure will not besubstantial.

Same Same Same Same Same Patents Evidence Wordsand Phrases Burden of Proof Burden of Evidence The burden ofproof contemplated by Article 34 should actually and properly beunderstood as referring to the burden of evidence (burden ofgoing forward) placed on the producer of identical (or fake)product to show that his product was produced without the use ofthe patented processthe patent owner still has the burden ofproof since he still has to introduce evidence of the existence of thealleged identical product, the fact that it is identical to thegenuine one produced by the patented process and the fact ofnewness of the genuine product or the fact of substantiallikelihood that the identical product was made by the patentedprocess.From the above, a WTO Member is required to providea rule of dis putable (note the words in the absence of proof to thecontrary) presumption that a product shown to be identical toone produced with the use of a patented process shall be deemedto have been obtained by the (illegal) use of the said patentedprocess, (1) where such product obtained by the patented productis new, or (2) where there is substantial likelihood that theidentical product was made with the use of the said patentedprocess but the owner of the patent could not determine the exactprocess used in obtaining such identical product. Hence, theburden of proof contemplated by Article 34 should actually beunderstood as the duty of the alleged patent infringer tooverthrow such presumption. Such burden, properly understood,actually refers to the burden of evidence (burden of goingforward) placed on the producer of the identical (or fake) productto show that his product was produced without the use of thepatented process. The foregoing notwithstanding, the patentowner still has the burden of proof since, regardles s of thepresumption provided under paragraph 1 of Article 34, suchowner still has to introduce evidence of the existence of thealleged identical product, the fact that it is identical to thegenuine one produced by the patented process and the fact of

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Taada vs. Angara



newness of the genuine product or the fact of substantiallikelihood that the identical product was made by the patentedprocess.

Same Same Same Same Words and Phrases Final Act,Explained.A final act, sometimes called protocol de clture, isan instrument which records the winding up of the proceedings ofa diplomatic conference and usually includes a reproduction of thetexts of treaties, conventions, recommendations and other actsagreed upon and s igned by the plenipotentiaries attending theconference. It is not the treaty itself. It is rather a summary ofthe proceedings of a protracted conference which may have takenplace over several years .

Same Judicial Review Words and Phrases Certiorari Bygrave abuse of discretion is meant such capricious and whimsicalexercise of judgment as is equivalent to lack of jurisdiction, andmere abuse of discretion is not enoughit must be grave.Bygrave abuse of discretion is meant such capricious and whimsicalexercise of judgment as is equivalent to lack of jurisdiction. Mereabuse of discretion is not enough. It mus t be grave abuse ofdiscretion as when the power is exercised in an arbitrary ordespotic manner by reason of passion or personal hostility, andmust be so patent and so gross as to amount to an evasion of apositive duty or to a virtual refusal to perform the duty enjoinedor to act at all in contemplation of law. Failure on the part of thepetitioner to show grave abus e of discretion will result in thedismissal of the petition.

Same Same Separation of Powers In rendering thisDecision, the Supreme Court never forgets that the Senate, whoseact is under review, is one of two sovereign houses of Congress andis thus entitled to great respect in its actions.In rendering thisDecision, this Court never forgets that the Senate, whose act isunder review, is one of two sovereign houses of Congress and isthus entitled to great respect in its actions. It is itself aconstitutional body independent and coordinate, and thus itsactions are presumed regular and done in good faith. Unlessconvincing proof and persuasive arguments are presented tooverthrow such presumptions, this Court will resolve every doubtin its favor. Using the foregoing wellaccepted definition of graveabuse of discretion and the presumption of regularity in theSenates processes, this Court cannot find any cogent reason toimpute grave abuse of discretion to the Senates exercise of itspower of concurrence in the WTO Agreement granted it by Sec. 21



of Article VII of the Constitution.

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Same Same Same Treaties World Trade Organization TheSenate Act, after deliberation and voting, of voluntarily andoverwhelmingly giving its consent to the WTO Agreement therebymaking it a part of the law of the land, is a legitimate exercise ofits sovereign duty and power.That the Senate, after deliberationand voting, voluntarily and overwhelmingly gave its consent tothe WTO Agreement thereby making it a part of the law of theland is a legitimate exercise of its sovereign duty and power. W efind no patent and gross arbitrariness or des potism by reas onof passion or personal hostility in such exercise. It is notimpossible to surmise that this Court, or at least some of itsmembers, may even agree with petitioners that it is moreadvantageous to the national interest to strike down SenateResolution No. 97. But that is not a legal reason to attribute graveabuse of dis cretion to the Senate and to nullify its decision. To doso would constitute grave abuse in the exercise of our own judicialpower and duty. Ineludably, what the Senate did was a validexercise of its authority. As to whether such exercise was wise,beneficial or viable is outside the realm of judicial inquiry andreview. That is a matter between the elected policy makers andthe people. As to whether the nation should join the worldwidemarch toward trade liberalization and economic globalization is amatter that our people should determine in electing their policymakers. After all, the WTO Agreement allows withdrawal ofmembership, should this be the political desire of a member.

World Trade Organization Trade Liberalization International Law Notwithstanding objections against possiblelimitations on national sovereignty, the WTO remains as the onlyviable structure for multilateral trading and the veritable forumfor the development of international trade law.The eminentfuturist John Naisbitt, author of the best seller Megatrends,predicts an Asian Renaissance where the East will become thedominant region of the world economically, politically andculturally in the next century. He refers to the free marketespoused by WTO as the catalyst in this coming Asianascendancy. There are at present about 31 countries including



China, Russia and Saudi Arabia negotiating for membership inthe WTO. Notwithstanding objections against possible limitationson national sovereignty, the WTO remains as the only viablestructure for multilateral trading and the veritable forum for thedevelopment of international trade law. The alternative to WTOis isolation, stagnation, if not economic selfdestruction. Dulyenriched with original membership, keenly aware of theadvantages and disadvantages of globalization with its onlineexperience, and endowed with

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a vision of the future, the Philippines now straddles thecrossroads of an international strategy for economic prosperityand stability in the new millennium. Let the people, through theirduly authorized elected officers , make their free choice.

SPECIAL CIVIL ACTION in the Supreme Court.Certiorari.

The facts are stated in the Opinion of the Court.Abelardo F. Domondon for petitioners.The Solicitor General for respondents.

PANGANIBAN, J.:

The emergence on January 1, 1995 of the World TradeOrganization, abetted by the membership thereto of thevast majority of countries, has revolutionized internationalbusiness and economic relations amongst states. It hasirreversibly propelled the world towards tradeliberalization and economic globalization. Liberalization,globalization, deregulation and privatization, the thirdmillennium buzz words, are ushering in a new borderlessworld of business by sweeping away as mere historicalrelics the heretofore traditional modes of promoting andprotecting national economies like tariffs, export subsidies,import quotas, quantitative restrictions, tax exemptionsand currency controls. Finding market niches andbecoming the best in specific industries in a marketdrivenand exportoriented global scenario are replacing ageold



beggarthyneighbor policies that unilaterally protectweak and inefficient domestic producers of goods andservices. In the words of Peter Drucker, the wellknownmanagement guru, Increased participation in the worldeconomy has become the key to domestic economic growthand prosperity.

Brief Historical Background

To hasten worldwide recovery from the devastationwrought by the Second World War, plans for theestablishment of three multilateral institutionsinspiredby that grand political body, the United Nationswerediscussed at

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Dumbarton Oaks and Bretton Woods. The first was theWorld Bank (WB) which was to address the rehabilitationand reconstruction of warravaged and later developingcountries the second, the International Monetary Fund(IMF) which was to deal with currency problems and thethird, the International Trade Organization (ITO), whichwas to foster order and predictability in world trade and tominimize unilateral protectionist policies that invitechallenge, even retaliation, from other states. However, fora variety of reasons, including its nonratification by theUnited States, the ITO, unlike the IMF and WB, never tookoff. What remained was only GATTthe GeneralAgreement on Tariffs and Trade. GATT was a collection oftreaties governing access to the economies of treatyadherents with no institutionalized body administering theagreements or dependable system of dispute settlement.

After half a century and several dizzying rounds ofnegotiations, principally the Kennedy Round, the TokyoRound and the Uruguay Round, the world finally gavebirth to that administering bodythe World TradeOrganizationwith the signing of the Final Act inMarrakesh, Morocco and the ratification of the WTOAgreement by its members.

1



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1 In Annex A of her Memorandum, dated August 8, 1996, received bythis Court on August 12, 1996, Philippine Ambassador to the UnitedNations , World Trade Organization and other international organizationsLilia R. Bautista (hereafter referred to as Bautista Paper) submitted a46year Chronology of GATT as follows:

1947 The birth of GATT. On 30 October 1947, the General Agreement on Tariffsand Trade (GATT) was signed by 23 nations at the Palais des Nations in Geneva.The Agreement contained tariff concessions agreed to in the first multilateraltrade negotiations and a set of rules designed to prevent these concessions frombeing frustrated by restrictive trade measures.

The 23 founding contracting parties were members of the PreparatoryCommittee established by the United Nations Economic and Social Council in1946 to draft the charter of the International Trade Organization (ITO). The ITOwas envis

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Like many other developing countries, the Philippinesjoined WTO as a founding member with the goal, as articu

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aged as the final leg of a triad of postWar economic agencies (the other two werethe International Monetary Fund and the International Bank for Reconstructionlater the World Bank).

In parallel with this task, the Committee members decided to negotiate tariffconces sions among themselves. From April to October 1947, the participantscompleted some 123 negotiations and established 20 schedules containing thetariff reductions and bindings which became an integral part of GATT. Theseschedules resulting from the first Round covered some 45,000 tariff concessionsand about $10 billion in trade.

GATT was conceived as an interim measure that put into effect the commercialpolicy provisions of the ITO. In November, delegations from 56 countries met inHavana, Cuba, to consider the ITO draft as a whole. After long and difficultnegotiations, s ome 53 countries signed the Final Act authenticating the text of theHavana Charter in March 1948. There was no commitment, however, fromgovernments to ratification and, in the end, the ITO was stillborn, leaving GATTas 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 mem bers were: Australia, Belgium, Brazil, Burma, Canada, Ceylon,Chile, China, Cuba, Czechoslovakia, France, India, Lebanon, Luxembourg,Netherlands, New Zealand, Norway, Pakistan, Southern Rhodesia, Syria, SouthAfrica, United Kingdom and the United States. The firs t Session of theContracting Parties was held from February to March in Havana, Cuba. Thesecretariat of the Interim Commiss ion for the ITO, which served as the ad hocsecretariat of GATT, moved from Lake Placid, New York, to Geneva. TheContracting Parties held their second session in Geneva from August toSeptember.

1949 Second Round at Annecy. During the second Round of trade negotiations,held from April to August at Annecy, France, the contracting parties exchangedsome 5,000 tariff concess ions. At their third Session, they also dealt with theaccess ion of ten more countries.

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lated by President Fidel V. Ramos in two letters to theSenate (infra), of improving Philippine access to foreignmarkets, especially its major trading partners, through thereduction of tariffs on its exports, particularly agriculturaland industrial products. The President also saw in theWTO the opening of

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1950 Third Round at Torquay. From September 1950 to April 1951, thecontracting 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. Fourmore countries acceded to GATT. During the fifth Session of the ContractingParties, the United States indicated that the ITO Charter would not be resubmitted to the US Congress this, in effect, meant that ITO would not come intooperation.

1956 Fourth Round at Geneva. The fourth Round was completed in May andproduced some $2.5 billion worth of tariff reductions . At the beginning of the year,the GATT commercial policy course for officials of developing countries wasinaugurated.

1958 The Haberler Report. GATT published Trends in International Trade inOctober. Known as the Haberler Report in honour of Professor GottfriedHaberler, the chairman of the panel of eminent economists, it provided initialguidelines for the work of GATT. The Contracting Parties at their 13th Session,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 totackle the problems facing developing countries in their trade. The establishmentof the European Economic Community during the previous year also demandedlargescale tariff negotiations under Article XXIV:6 of the General Agreement.

1960 The Dillon Round. The fifth Round opened in September and was dividedinto two phases: the first was concerned with negotiations with EEC member states for the creation of a single schedule of concessions for the Community basedon its Common External Tariff and the second was a further general round oftariff negotiations. Named in honour of US UnderSecretary of State DouglasDillon who proposed the negotiations, the Round was concluded in July 1962 andresulted in about 4,400 tariff concessions covering $4.9 billion of trade.

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new opportunities for the services sector x x x, (thereduction of) costs and uncertainty associated withexporting x x x, and

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1961 The ShortTerm Arrangement covering cotton textiles was agreed as anexception to the GATT rules. The arrangement permitted the negotiation of quotarestrictions affecting the exports of cottonproducing countries. In 1962 the ShortTerm Arrangement became the Long term Arrangement, lasting until 1974when the Multifibre Arrangement entered into force.

1964 The Kennedy Round. Meeting at Ministerial level, a Trade NegotiationsCommittee formally opened the Kennedy Round in May. In June 1967, theRounds Final Act was signed by some 50 participating countries which togetheraccounted for 75 per cent of world trade. For the first time, negotiations departedfrom the productbyproduct approach used in the previous Rounds to an acrosstheboard or linear method of cutting tariffs for industrial goods. The workinghypothesis 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 $40 billion.Separate agreements were reached on grains, chemical products and a Code onAntiDumping.

1965 A New Chapter. The early 1960s marked the accession to the GeneralAgreement of many newlyindependent developing countries. I n February, theContracting Parties, meeting in a special session, adopted the text of Part IV onTrade and Development. The additional chapter to the GATT required developedcountries to accord high priority to the reduction of trade barriers to products ofdeveloping countries. A Committee on Trade and Development was established tooversee the functioning of the new GATT provisions. In the preceding year, GATT



had established the International Trade Centre (ITC) to help developing countriesin trade promotion and identification of potential markets. Since 1968, the ITChad been jointly operated by GATT and the UN Conference on Trade andDevelopment (UNCTAD). 1973 The Tokyo Round. The seventh Round waslaunched by Ministers in September at the Japanese capital. Some 99 countriesparticipated in negotiating a comprehensive body of agreements covering bothtariff and nontariff matters.

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(the attraction of) more investments into the country.Although the Chief Executive did not expressly mention itin his

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At the end of the Round in November 1979, participants exchanged tariffreductions and bindings which covered more than $300 billion of trade. As a resultof these cuts, the weighted average tariff on manufactured goods in the worldsnine major industrial markets declined from 7.0 to 4.7 per cent. Agreements werereached in the following areas: subsidies and countervailing measures, technicalbarriers to trade, import licensing procedures, government procurement, customsvaluation, a revised antidumping code, trade in bovine meat, trade in dairyproducts and trade in civil aircraft. The first concrete result of the Round was thereduction of import duties and other trade barriers by industrial countries ontropical products exported by developing countries.

1974 On 1 January 1974, the Arrangement Regarding International Trade inTextiles, otherwise known as the Multifibre Arrangement (MFA), entered intoforce. I t superseded the arrangements that had been governing trade in cottontextiles since 1961. The MFA seeks to promote the expansion and progressiveliberalization of trade in textile products while at the same time avoidingdisruptive effects in individual markets and lines of production. The MFA wasextended in 1978, 1982, 1986, 1991 and 1992. MFA members account for most ofthe world exports of textiles and clothing which in 1986 amounted to US$128billion.

1982 Ministerial Meeting. Meeting for the first time in nearly ten years, theGATT Ministers in November at Geneva reaffirmed the validity of GATT rules forthe conduct of international trade and committed themselves to combatingprotectionist pressures. They also established a wideranging work programme forthe GATT which was to lay down the groundwork for a new Round.

1986 The Uruguay Round. The GATT Trade Mi ni sters meeting at Punta delEste, 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 andthe second initiated negotiation on trade in s ervices. In the area of trade in goods,the Minis

34


letter, the Philippinesand this is of special interest to thelegal professionwill benefit from the WTO system ofdispute settlement by judicial adjudication through theindependent WTO settlement bodies called (1) DisputeSettlement Panels and (2) Appellate Tribunal. Heretofore,trade disputes were settled mainly through negotiationswhere solutions were arrived at frequently on the basis ofrelative bargaining strengths, and where naturally, weakand underdeveloped countries were at a disadvantage.

The Petition in Brief

Arguing mainly (1) that the WTO requires the Philippinesto place nationals and products of membercountries onthe same footing as Filipinos and local products and (2)that the WTO intrudes, limits and/or impairs theconstitutional powers of both Congress an d th e Su premeCourt, the instant petition before this Court assails theWTO Agreement for

________________

ters committed themselves to a standstill on new trade measures inconsis tentwith their GATT obligations and to a rollback programme aimed at phasing outexisting inconsistent measures. Envisaged to last four years, negotiations startedin early February 1987 in the following areas: tariffs, nontariff measures, tropicalproducts, natural resourcebased products, textiles and clothing, agriculture,subsidies, safeguards, traderelated aspects of intellectual property rightsincluding trade in counterfeit goods, and traderelated investment meas ures . Thework of other groups included a review of GATT articles, the GATT disputesettlement procedure, the Tokyo Round agreements, as well as the functioning ofthe GATT system as a whole.

1994 GATT 1994 is the updated version of GATT 1947 and takes into accountthe substantive and institutional changes negotiated in the Uruguay Round.



GATT 1994 is an integral part of the World Trade Organization established on 1January 1995. It is agreed that there be a one year transition period during whichcertain GATT 1947 bodies and commitments would coexist with those of theWorld Trade Organization.

35


violating the mandate of the 1987 Constitution to developa selfreliant and independent national economy effectivelycontrolled by Filipinos x x x (to) give preference to qualifiedFilipinos (and to) promote the preferential use of Filipinolabor, domestic materials and locally produced goods.

Simply stated, does the Philippine Constitution prohibitPhilippine participation in worldwide trade liberalizationand economic globalization? Does it proscribe Philippineintegration into a global economy that is liberalized,deregulated and privatized? These are the main questionsraised in this petition for certiorari, prohibition andmandamus under Rule 65 of the Rules of Court praying (1)for the nullification, on constitutional grounds, of theconcurrence of the Philippine Senate in the ratification bythe President of the Philippines of the AgreementEstablishing the World Trade Organization (WTOAgreement, for brevity) and (2) for the prohibition of itsimplementation and enforcement through the release andutilization of public funds, the assignment of public officialsand employees, as well as the use of government propertiesand resources by respondentheads of various executiveoffices concerned therewith. This concurrence is embodiedin Senate Resolution No. 97, dated December 14, 1994.

The Facts

On April 15, 1994, Respondent Rizalino Navarro, thenSecretary of the Department of Trade and Industry(Secretary Navarro, for brevity), representing theGovernment of the Republic of the Philippines, signed inMarrakesh, Morocco, the Final Act Embodying the Resultsof the Uruguay Round of Multilateral Negotiations (FinalAct, for brevity).

By signing the Final Act,2 Secretary Navarro on behalf



(a)

(b)

of the Republic of the Philippines, agreed:

_______________

2 The Final Act was signed by repres entatives of 125 entities, namelyAlgeria, Angola, Antigua and Barbuda, Argentine Republic, Australia,Republic of Austria, State of Bahrain, Peoples Republic of Bangladesh,Barbados, The Kingdom of Belgium, Belize, Republic of

36


to submit, as appropriate, the WTO Agreement for theconsideration of their respective competent authorities,with a view to seeking approval of the Agreement inaccordance with their procedures andto adopt the Ministerial Declarations and Decisions.

On August 12, 1994, the members of the Philippine Senatereceived a letter dated August 11, 1994 from the Presidentof

_______________

Benin, Bolivia, Botswana, Brazil, Brunei Darussalam, Burkina Faso, Burundi,Cameroon, Canada, Central African Republic, Chad, Chile, Peoples Republic ofChina, Colombia, Congo, Costa Rica, Republic of Cote dIvoire, Cuba, Cyprus,Czech Republic, Kingdom of Denmark, Commonwealth of Dominica, DominicanRepublic, Arab Republic of Egypt, El Salvador, European Communities, Republicof Fiji, Finland, French Republic, Gabonese Republic, Gambia, Federal Republic ofGermany, Ghana, Hellenic Republic, Grenada, Guatemala, Republic of GuineaBissau, Republic of Guyana, Haiti, Honduras, Hongkong, Hungary, Iceland, India,Indonesia, Ireland, State of Israel, Italian Republic, Jamaica, Japan, Kenya,Korea, State of Kuwait, Kingdom of Lesotho, Principality of Liechtenstein, GrandDuchy of Luxembourg, Macau, Republic of Madagascar, Republic of Malawi,Malaysia, Republic of Maldives, Republic of Mali, Republic of Malta, IslamicRepublic of Mauritania, Republic of Mauritius, United Mexican States, Kingdomof Morocco, Republic of Mozambique, Union of Myanmar, Republic of Namibia,Kingdom of the Netherlands, New Zealand, Nicaragua, Republic of Niger, FederalRepublic of Nigeria, Kingdom of Norway, Islamic Republic of Pakistan, Paraguay,Peru, Philippines, Poland, Portuguese Republic, State of Qatar, Romania,Rwandese Republic, Saint Kitts and Nevis, Saint Lucia, Saint Vincent and theGrenadines, Senegal, Sierra Leone, Singapore, Slovak Republic, South Africa,



Kingdom of Spain, Democratic Socialist Republic of Sri Lanka, Republic ofSurinam, Kingdom of Swaziland, Kingdom of Sweden, Swiss Confederation,United Republic of Tanzania, Kingdom of Thailand, Togolese Republic, Republic ofTrinidad and Tobago, Tunisia, Turkey, Uganda, United Arab Emirates, UnitedKingdom of Great Britain and Northern I reland, United States of America,Eastern Republic of Uruguay, Venezuela, Republic of Zaire, Republic of Zambia,Republic of Zimbabwe see pp. 625, Vol. 1, Uruguay Round of Multilateral TradeNegotiations.

37


the Philippines,3 stating among others that the Uruguay

Round Final Act is hereby submitted to the Senate for its

________________

3

11 August 1994The Honorable Members

SenateThrough Senate President Edgardo AngaraManilaLadies and Gentlemen:

I have the honor to forward herewith an authenticated copy of theUruguay Round Final Act signed by Department of Trade andIndustry Secretary Rizalino S. Navarro for the Philippines on 15 April1994 in Marrakesh, Morocco.

The Uruguay Round Final Act aims to liberalize and expand worldtrade and strengthen the interrelationship between trade andeconomic policies affecting growth and development.

The Final Act will improve Philippine access to foreign markets,especially its major trading partners through the reduction of tariffson its exports particularly agricultural and industrial products. Theseconcessions may be availed of by the Philippines, only if it is amember of the World Trade Organization. By GATT estimates, thePhilippines can acquire additional export revenues from $2.2 to $2.7Billion annually under Uruguay Round. This will be on top of thenormal increase in exports that the Philippines may experience.

The Final Act will also open up new opportunities for the servicessector in such areas as the movement of personnel, (e.g., professional



services and construction services), crossborder supply (e.g.,computerrelated services), consumption abroad (e.g., tourism,convention services, etc.) and commercial presence.

The clarified and improved rules and disciplines on antidumpingand countervailing measures will also benefit Philippine exporters byreducing the costs and uncertainty associated with exporting while atthe same time providing a means for domestic industries to safeguardthemselves against unfair imports.

Likewise, the provision of adequate protection for intellectualproperty rights is expected to attract more inves tments into thecountry and to make it less vulnerable to unilateral actions by itstrading partners (e.g., Sec. 301 of the United States Omnibus TradeLaw).

38


concurrence pursuant to Section 21, Article VII of theConstitution.

On August 13, 1994, the members of the PhilippineSenate received another letter from the President of thePhilippines

4

_______________

In view of the foregoing, the Uruguay Round Final Act is herebysubmitted to the Senate for its concurrence pursuant to Section 21, ArticleVI I of the Constitution.

A draft of a proposed Resolution giving its concurrence to the afores aidAgreement is enclosed.

Very truly yours, (SGD.) FIDEL V. RAMOS

4

11 August 1994The Honorable Members

SenateThrough Senate President Edgardo AngaraManilaLadies and Gentlemen:

I have the honor to forward herewith an authenticated copy of theUruguay Round Final Act signed by Department of Trade and



(a)

(b)

Industry Secretary Rizalino S. Navarro for the Philippines on 13 April1994 in Marrakech (sic), Morocco.

Members of the trade negotiations committee, which included thePhilippines, agreed that the Agreement Establishing the World TradeOrganization, the Ministerial Declarations and Decisions, and theUnderstanding on Commitments in Financial Services embody theresults of their negotiations and form an integral part of the UruguayRound Final Act.

By signing the Uruguay Round Final Act, the Philippines, throughSecretary Navarro, agreed:

To submit the Agreement Establishing the World TradeOrganization to the Senate for its concurrence pursuant toSection 21, Article VII of the Constitution andTo adopt the Ministerial Declarations and Decisions. TheUruguay Round Final Act aims to liberalize and expand worldtrade and strengthen the interrelationship between trade andeconomic policies affecting growth and development.

39


likewise dated August 11, 1994, which stated among othersthat the Uruguay Round Final Act, the AgreementEstablishing the World Trade Organization, the MinisterialDeclarations and Decisions, and the Understanding onCommitments in Financial Services are hereby submittedto the Sen

______________

The Final Act will improve Philippine access to foreign markets, especiallyits major trading 0partners through the reduction of tariffs on its exportsparticularly agricultural and industrial products. These concessions maybe availed of by the Philippines, only if it is a member of the World TradeOrganization. By GATT estimates, the Philippines can acquire additionalexport 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 thePhilippines may experience.

The Final Act will also open up new opportunities for the servicessector in such areas as the movement of personnel, (e.g., professionalservices and construction services), crossborder supply (e.g., computerrelated services), consumption abroad (e.g., tourism, convention services,



etc.) and commercial presence.The clarified and improved rules and disciplines on antidumping and

countervailing measures will also benefit Philippine exporters by reducingthe costs and uncertainty associated with exporting while at the sametime providing a means for domestic industries to safeguard themselvesagainst unfair imports.

Likewise, the provision of adequate protection for intellectual propertyrights is expected to attract more inves tments into the country and tomake 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, the AgreementEstablishing the World Trade Organization, the Ministerial Declarationsand Decisions, and the Understanding on Commitments in FinancialServices, as embodied in the Uruguay Round Final Act and forming anintegral part thereof are hereby submitted to the Senate for itsconcurrence pursuant to Section 21, Article VII of the Constitution.

A draft of a proposed Resolution giving its concurrence to the aforesaidAgreement is enclosed.


40


ate for its concurrence pursuant to Section 21, Article VIIof the Constitution.

On December 9, 1994, the President of the Philippinescertified the necessity of the immediate adoption of P.S.1083, a resolution entitled Concurring in the Ratificationof the Agreement Establishing the World Trade Organization.

5

On December 14, 1994, the Philippine Senate adoptedResolution No. 97 which Resolved, as it is hereby resolved,that the Senate concur, as it hereby concurs, in theratification by the President of the Philippines of theAgreement Establishing the World Trade Organization.

6

The text of the WTO Agreement is written on pages 137 etseq. of Volume I of the 36volume Uruguay Round ofMultilateral Trade Negotiations and includes variousagreements and associated legal

_______________



5

December 9, 1994HON. EDGARDO J. ANGARA Senate President Senate, ManilaDear Senate President Angara:

Pursuant to the provis ions of Sec. 26(2), Article VI of theConstitution, I hereby certify to the necessity of the immediateadoption of P.S. 1083, entitled:

CONCURRING IN THE RATIFICATION OF THE AGREEMENTESTABLISHING THE WORLD TRADE ORGANIZATION

to meet a public emergency consisting of the need for immediatemembership in the WTO in order to assure the benefits to thePhilippine economy arising from such membership.


6 Attached as Annex A Petition rollo, p. 52. P.S. 1083 is the forerunnerof assailed Senate Resolution No. 97. It was prepared by the Committee ofthe Whole on the General Agreement on Tariffs and Trade chaired by Sen.Blas F. Ople and cochaired by Sen. Gloria MacapagalArroyo see AnnexC, Compliance of petitioners dated January 28, 1997.

41


instruments (identified in the said Agreement as Annexes1, 2 and 3 thereto and collectively referred to asMultilateral Trade Agreements, for brevity) as follows:

ANNEX 1

Annex 1A: Multilateral Agreement on Trade in GoodsGeneral Agreement on Tariffs and Trade 1994Agreement on AgricultureAgreement on the Application of Sanitary andPhytosanitary Meas uresAgreement on Textiles and ClothingAgreement on Technical Barriers to TradeAgreement on TradeRelated Investment MeasuresAgreement on Implementation of Article VI of theGeneral Agreement on Tariffs and Trade 1994



Agreement on Implementation of Article VII of theGeneral Agreement on Tariffs and Trade 1994Agreement on PreShipment InspectionAgreement on Rules of OriginAgreement on Imports Licensing ProceduresAgreement on Subsidies and Coordinating MeasuresAgreement on SafeguardsAnnex 1B: General Agreement on Trade in Services andAnnexesAnnex 1C: Agreement on TradeRelated As pects ofIntellectual Property Rights

ANNEX 2

Understanding on Rules and Procedures Governing the Settlement of Disputes

ANNEX 3

Trade Policy Review Mechanism

On December 16, 1994, the President of the Philippinessigned

7 the Instrument of Ratification, declaring:

_______________

7 The Philippines is thus considered an original or founding member ofWTO, which as of July 26, 1996 had 123 members as follows: Antigua andBarbuda, Argentina, Australia, Austria, Bahrain, Bangladesh, Barbados,Belguim, Belize, Benin, Bolivia, Botswana, Brazil, Brunei Darussalam,Burkina Faso, Burundi, Camer

42


NOW THEREFORE, be it known that I, FIDEL V. RAMOS,President of the Republic of the Philippines, after having seen andconsidered the aforementioned Agreem ent Establishing theWorld Trade Organization and the agreements and associatedlegal instruments included in Annexes one (1), two (2) and three(3) of that Agreement which are integral parts thereof, signed atMarrakesh, Morocco on 15 April 1994, do hereby ratify andconfirm the same and every Article and Clause thereof.



To emphasize, the WTO Agreement ratified by thePresident of the Philippines is composed of the AgreementProper and the associated legal instruments included inAnnexes one (1), two (2) and three (3) of that Agreementwhich are integral parts thereof.

On the other hand, the Final Act signed by SecretaryNavarro embodies not only the WTO Agreement (and itsintegral annexes aforementioned) but also (1) theMinisterial Declarations and Decisions and (2) theUnderstanding on Commitments in Financial Services. Inhis Memorandum

______________

oon, Canada, Central African Republic, Chili, Colombia, Costa Rica,Cote dIvoire, Cuba, Cyprus, Czech Republic, Denmark, Djibouti,Dominica, Dominican Republic, Ecuador, Egypt, El Salvador, EuropeanCommunity, Fiji, Finland, France, Gabon, Germany, Ghana, Greece,Grenada, Guatemala, Guinea, Guinea Bissau, Guyana, Haiti, Honduras,Hongkong, 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, Netherlandsfor the Kingdom in Europe and for theNetherlands 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, Si erra Leone, Si ngapore, Slovak Republ ic, Sl oveni a, Solomon Islands, South Africa, Spain, SriLanka, Surinam, Swaziland, Sweden, Switzerland, Tanzania, Thailand,Togo, Trinidad and Tobago, Tunisia, Turkey, Uganda, United ArabEmirates, United Kingdom, United States, Uruguay, Venezuela, Zambiaand Zimbabwe. See Annex A, Bautista Paper, infra.

43


dated May 13, 1996,8 the Solicitor General describes these

two latter documents as follows:

The Ministerial Decisions and Declarations are twentyfivedeclarations and decisions on a wide range of matters, such asmeasures in favor of least developed countries, notification



(a)

(b)

procedures, relationship of WTO with the International MonetaryFund (I MF), and agreements on technical barriers to trade andon dispute settlement.

The Understanding on Commitments in Financial Servicesdwell on, among other things, standstill or limitations andqualifications of commitments to existing nonconformingmeasures, market access, national treatment, and definitions ofnonresident supplier of financial services, commercial presenceand new financial service.

On December 29, 1994, the present petition was filed. Aftercareful deliberation on respondents comment andpetitioners reply thereto, the Court resolved on December12, 1995, to give due course to the petition, and the partiesthereafter filed their respective memoranda. The Courtalso requested the Honorable Lilia R. Bautista, thePhilippine Ambassador to the United Nations stationed inGeneva, Switzerland, to submit a paper, hereafter referredto as Bautista Paper,

9 for brevity, (1) providing a

historical background of and (2) summarizing the saidagreements.

During the Oral Argument held on August 27, 1996, theCourt directed:

the petitioners to submit the (1) Senate Committee Reporton the matter in controversy and (2) the transcript ofproceedings/hearings in the Senate andthe Solicitor General, as cou n s el for res ponden ts , tofile (1) a list of Philippine treaties signed prior to thePhilippine adher

______________

8 Page 6 rollo p. 261.9 I n compliance, Ambassador Bautista submitted to the Court on August 12,

1996, a Memorandum (the Bautista Paper) consisting of 56 pages excludingannexes. This is the same document mentioned in footnote No. 1.

44


ence to the WTO Agreement, which derogate from Philippinesovereignty and (2) copies of the multivolume WTO Agreement



A.

B.

C.

D.

E.

F.

and other documents mentioned in the Final Act, as soon aspossible.

After receipt of the foregoing documents, the Court said itwould consider the case subm itted for resolution. In aCompliance dated September 16, 1996, the SolicitorGeneral submitted a printed copy of the 36volumeUruguay Round of Multilateral Trade Negotiations, and inanother Compliance dated October 24, 1996, he listed thevarious bilateral or multilateral treaties or internationalinstruments involving derogation of Philippinesovereignty. Petitioners, on the other hand, submittedtheir Compliance dated January 28, 1997, on January 30,1997.

The Issues

In their Memorandum dated March 11, 1996, petitionerssummarized the issues as follows:

Whether the petition presents a political question or isotherwise not justiciable.Whether the petitioner members of the Senate whoparticipated in the deliberations and voting leading to theconcurrence are estopped from impugning the validity ofthe Agreement Establishing the World TradeOrganization or of the validity of the concurrence.Whether the provisions of the Agreement Establishing theWorld Trade Organization contravene the provisions ofSec. 19, Article II, and Secs. 10 and 12, Article XII, all ofthe 1987 Philippine Constitution.Whether provisions of the Agreement Establis hing theWorld Trade Organization unduly limit, res trict andimpair Philippine sovereignty specifically the legislativepower which, under Sec. 2, Article VI, 1987 PhilippineConstitution is vested in the Congress of the Philippines.Whether provisions of the Agreement Establishing theWorld Trade Organization interfere with the exercise ofjudicial power.Whether the respondent members of the Senate acted ingrave abuse of discretion amounting to lack or excess ofjurisdiction

45



1.

2.

3.

4.


when they voted for concurrence in the ratification of theconstitutionallyinfirm Agreement Establishing the World TradeOrganization.

G. Whether the respondent members of the Senate acted ingrave abuse of discretion amounting to lack or excess ofjurisdiction when they concurred only in the ratification of theAgreement Establishing the World Trade Organization, and notwith the Presidential submission which included the Final Act,Ministerial Declaration and Decisions, and the Understanding onCommitments in Financial Services.

On the other hand, the Solicitor General as counsel forrespondents synthesized the several issues raised bypetitioners into the following:

10

Whether or not the provisions of the AgreementEstablishing the World Trade Organization and theAgreements and Associated Legal Instruments included inAnnexes one (1), two (2) and three (3) of that agreementcited by petitioners directly contravene or undermine theletter, spirit and intent of Section 19, Article II andSections 10 and 12, Article XII of the 1987 Constitution.Whether or not certain provisions of the Agreementunduly limit, restrict or impair the exercise of legislativepower by Congress.Whether or not certain provis ions of the Agreementimpair the exercise of judicial power by this HonorableCourt in promulgating the rules of evidence.Whether or not the concurrence of the Senate in theratification by the President of the Philippines of theAgreement establishing the W orld Trade Organizationimplied rejection of the treaty embodied in the Final Act.

By raising and arguing only four issues against the sevenpresented by petitioners, the Solicitor General haseffectively ignored three, namely: (1) whether the petitionpresents a political question or is otherwise not justiciable(2) whether petitionermembers of the Senate (Wigberto E.Taada and Anna Dominique Coseteng) are estopped fromjoining this

_______________



(1)

(2)

(3)

10 Memorandum for Respondents, p. 13 rollo, p. 268.

46


suit and (3) whether the respondentmembers of theSenate acted in grave abuse of discretion when they votedfor concurrence in the ratification of the WTO Agreement.The foregoing notwithstanding, this Court resolved to dealwith these three issues thus:

The political question issuebeing veryfundamental and vital, and being a matter thatprobes into the very jurisdiction of this Court tohear and decide this casewas deliberated upon bythe Court and will thus be ruled upon as the firstissueThe matter of estoppel will not be taken up becausethis defense is waivable and the respondents haveeffectively waived it by not pursuing it in any oftheir pleadings in any event, this issue, even ifruled in respondents favor, will not cause thepetitions dismissal as there are petitioners otherthan the two senators, who are not vulnerable tothe defense of estoppel andThe issue of alleged grave abuse of discretion on thepart of the respondent senators will be taken up asan integral part of the disposition of the four issuesraised by the Solicitor General.

During its deliberations on the case, the Court noted thatthe respondents did not question the locus standi ofpetitioners. Hence, they are also deemed to have waivedthe benefit of such issue. They probably realized that graveconstitutional issues, expenditures of public funds andserious international commitments of the nation areinvolved here, and that transcendental public interestrequires that the substantive issues be met head on anddecided on the merits, rather than skirted or deflected byprocedural matters.

11

To recapitulate, the issues that will be ruled uponshortly are:



(1)

(2)

(3)

(4)

(5)

______________

11 Cf. Kilosbayan, Incorporated vs. Morato, 246 SCRA 540, July 17,1995 for a discussion on locus standi. See also the Concurring Opinion ofMr. 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.

47


DOES THE PETITION PRESENT A JUSTICIABLECONTROVERSY? OTHERWISE STATED, DOES THEPETITION INVOLVE A POLITI CAL QUESTION OVERWHICH THIS COURT HAS NO JURISDICTION?DO THE PROVI SI ONS OF THE WTO AGREEM ENTAND ITS THREE ANNEXES CONTRAVENE SEC. 19,ARTICLE II, AND SECS. 10 AND 12, ARTICLE XII, OFTHE PHILIPPINE CONSTITUTION?DO THE PROVISIONS OF SAID AGREEMENT AND ITSANNEXES LIMIT, RESTRICT, OR IMPAIR THEEXERCISE OF LEGISLATIVE POWER BY CONGRESS?DO SAID PROVISIONS UNDULY IMPAIR ORINTERFERE WITH THE EXERCISE OF JUDICIALPOWER BY THIS COURT IN PROMULGATING RULESON EVIDENCE?WAS THE CONCURRENCE OF THE SENATE IN THEWTO AGREEMENT AND ITS ANNEXES SUFFICIENTAND/OR VALID, CONSIDERING THAT I T DID NOTINCLUDE THE FI NAL ACT, MINISTERIALDECLARATIONS AND DECISIONS, AND THEUNDERSTANDING ON COMMITMENTS INFINANCIAL SERVICES?

The First Issue: Does the Court Have Jurisdiction Over the Controversy?

In seeking to nullify an act of the Philippine Senate on theground that it contravenes the Constitution, the petition nodoubt raises a justiciable controversy. Where an action ofthe legislative branch is seriously alleged to have infringed



the Constitution, it becomes not only the right but in factthe duty of the judiciary to settle the dispute. The questionthus posed is judicial rather than political. The duty (toadjudicate) remains to assure that the supremacy of theConstitution is upheld.

12 Once a controversy as to the

application or interpretation of a constitutional provision israised before this

_______________

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.

48


Court (as in the instant case), it becomes a legal issuewhich the Court is bound by constitutional mandate todecide.

13

The jurisdiction of this Court to adjudicate the matters14

raised in the petition is clearly set out in the 1987Constitution,

15 as follow s:

Judicial power includes the duty of the courts of justice to settleactual controversies involving rights which are legallydemandable and enforceable, and to determine whether or notthere has been a grave abuse of discretion amounting to lack orexcess of jurisdiction on the part of any branch or instrumentalityof the government.

The foregoing text emphasizes the judicial departmentsduty and power to strike down grave abuse of discretion onthe part of any branch or instrumentality of governmentincluding Congress. It is an innovation in our politicallaw.

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 anyof its officials has acted without jurisdiction or in excess ofjurisdiction or so capriciously as to constitute an abuse ofdiscretion amounting to excess of jurisdiction. This is notonly a judicial pow er but a duty to pass judgment onmatters of this nature.

As this Court has repeatedly and firmly emphasized in



many cases,18 it w ill not shirk, digress from or abandon its

sacred duty and authority to uphold the Constitution inmatters that involve grave abuse of discretion broughtbefore it in

________________

13 Guingona, Jr. vs. Gonzales, 219 SCRA 326, 337, March 1, 1993.14 See Tanada 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 newprovision gives the Supreme Court a duty to intrude into the jurisdictionof the Congress or the President.

17 I Record of the Constitutional Commission 436.18 Cf. Daza vs. Singson, 180 SCRA 496, December 21, 1989.

49


appropriate cases, committed by any officer, agency,instrumentality or department of the government.

As the petition alleges grave abuse of discretion and asthere is no other plain, speedy or adequate remedy in theordinary course of law, we have no hesitation at all inholding that this petition should be given due course andthe vital questions raised therein ruled upon under Rule 65of the Rules of Court. Indeed, certiorari, prohibition andmandamus are appropriate remedies to raise constitutionalissues and to review and/or prohibit/nullify, w hen proper,acts of legislative and executive officials. On this, we haveno equivocation.

We should stress that, in deciding to take jurisdictionover this petition, this Court w ill not review the wisdom ofthe decision of the President and the Senate in enlistingthe country into the WTO, or pass upon the merits of tradeliberalization as a policy espoused by said internationalbody. Neither will it rule on the propriety of thegovernments economic policy of reducing/removing tariffs,taxes, subsidies, quantitative restrictions, and otherimport/trade barriers. Rather, it will only exercise its



constitutional duty to determine whether or not there hadbeen a grave abuse of discretion amounting to lack orexcess of jurisdiction on the part of the Senate in ratifyingthe WTO Agreement and its three annexes.

Second Issue: The WTO Agreement 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 economicnationalism are violated by the socalled parityprovisions and national treatment clauses scattered invarious parts not only of the WTO Agreement and itsannexes but also in the Ministerial Decisions andDeclarations and in the Understanding on Commitments inFinancial Services.

Specifically, the flagship constitutional provisionsreferred to are Sec. 19, Article II, and Secs. 10 and 12,Article XII, of the Constitution, which are worded asfollows:

50


Article II

DECLARATION OF PRINCIPLES AND STATE POLICI ES

xx xx xx xxSec. 19. The State shall develop a selfreliant and independent

national economy effectively controlled by Filipinos.xx xxxxxx

Article XII

NATIONAL ECONOM Y AND PATRIMONY

xxxxxxxxSec. 10. x x x. The Congress shall enact measures that will

encourage the formation and operation of enterprises whosecapital is wholly owned by Filipinos.

In the grant of rights, privileges, and concessions covering the



1.

2.

national economy and patrimony, the State shall give preferenceto qualified Filipinos.

xx xx xx xxSec. 12. The State shall promote the preferential use of Filipino

labor, domestic materials and locally produced goods, and adoptmeasures that help make them competitive.

Petitioners aver that these sacred constitutional principlesare desecrated by the following WTO provisions quoted intheir memorandum:

19

a) In the area of investment measures related to trade in goods(TRIMS, for brevity):

Article 2

National Treatment and Quantitative Restrictions.

Without prejudice to other rights and obligations under GATT1994, no Member shall apply any TRIM that is inconsistent withthe provisions of Article III or Article XI of GATT 1994.An Illustrative list of TRIMS that are inconsistent with theobligations of general elimination of quantitative re

_______________

19 Memorandum for Petitioners, pp. 1416 rollo, pp. 204206.

51


strictions provided for in paragraph I of Article XI of GATT1994 is contained in the Annex to this Agreement. (Agreement onTradeRelated Investment Measures, Vol. 27, Uruguay Round,Legal Instruments, p. 22121, emphasis supplied). The Annexreferred to reads as follows:

ANNEX

Illustrative List

1. TRIMS that are inconsistent with the obligation of nationaltreatment provided for in paragraph 4 of Article III of GATT 1994include those which are mandatory or enforceable under domesticlaw or under administrative rulings, or compliance with which is



(a)

(b)

(a)

(b)

(c)

necessary to obtain an advantage, and which require:

the purchase or use by an enterprise of products of domesticorigin or from any domestic source, whether specified in terms ofparticular products, in terms of volume or value of products, or interms of proportion of volume or value of its local production orthat an enterprises purchases or use of imported products belimited to an amount related to the volume or value of localproducts that it exports.

2. TRIMS that are inconsistent with the obligations of generalelimination of quantitative restrictions provided for in paragraph1 of Article XI of GATT 1994 include those which are mandatoryor enforceable under domestic laws or under administrativerulings, or compliance with which is necessary to obtain anadvantage, and which restrict:

the importation by an enterprise of products used in or related tothe local production that it exports

the importation by an enterprise of products used in or related toits local production by restricting its access to foreign exchangeinflows attributable to the enterprise orthe exportation or sale for export specified in terms of particularproducts, in terms of volume or value of products, or in terms of apreparation of volume or value of its local production. (Annex tothe Agreement on TradeRelated Investment Measures, Vol. 27,Uru

52


guay Round Legal Documents, p. 22125, emphasis supplied).

The paragraph 4 of Article III of GATT 1994 referred to isquoted as follows:

The products of the territory of any contracting party imported into theterritory of any other contracting party shall be accorded treatment noless favourable than that accorded to like products of national origin inrespect of laws, regulations and requirements affecting their internalsale, offering for sale, purchase, transportation, distribution or use. Theprovisions of this paragraph shall not prevent the application ofdifferential internal transportation charges which are based exclusivelyon the economic operation of the means of transport and not on the



2.

3.

nationality of the product. (Article III , GATT 1947, as amended by theProtocol Modifying Part II, and Article XXVI of GATT, 14 September1948, 62 UMTS 8284 in relation to paragraph 1(a) of the GeneralAgreement on Tariffs and Trade 1994, Vol. 1, Uruguay Round, LegalInstruments, p. 177, emphasis supplied).

b) In the area of trade related aspects of intellectual propertyrights (TRIPS, for brevity):

Each Mem ber shall accord to the nationals of other Members treatmentno less favourable than what it accords to its own nationals with regardto the protection of intellectual property . . . (par. 1, Article 3, Agreementon TradeRelated 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 conditionsand qualifications set out therein, each Member shall accord to servicesand service suppliers of any other Member, in res pect of all measuresaffecting the supply of services, treatment no less favourable than itaccords to its own like services and service suppliers.

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A Member may meet the requirement of paragraph I by accordingto services and service suppliers of any other Member, eitherformally identical treatment or formally different treatment tothat it accords to its own like services and service suppliers.Formally identical or formally different treatment shall beconsidered to be less favourable if it modifies the conditions ofcompletion in favour of services or service suppliers of theMember compared to like s ervices or service suppliers of anyother Member. (Article XVII, General Agreement on Trade inServices, Vol. 28, Uruguay Round, Legal Instruments, p. 22610emphasis supplied).

It is petitioners position that the foregoing nationaltreatment and parity provisions of the WTO Agreementplace nationals and products of member countries on thesame footing as Filipinos and local products, incontravention of the Filipino First policy of the



Constitution. They allegedly render meaningless thephrase effectively controlled by Filipinos. Theconstitutional conflict becomes more manifest when viewedin the context of the clear duty imposed on the Philippinesas a WTO member to ensure the conformity of its laws,regulations and administrative procedures with itsobligations as provided in the annexed agreements.

20

Petitioners further argue that these provisions contraveneconstitutional limitations on the role exports play innational development and negate the preferentialtreatment accorded to Filipino labor, domestic materialsand locally produced goods.

On the other hand, respondents through the SolicitorGeneral counter (1) that such Charter provisions are notselfexecuting and m erely set out general policies (2) thatthese nationalistic portions of the Constitution invoked bypetitioners should not be read in isolation but should berelated to other relevant provisions of Art. XII, particularlySecs. 1 and 13 thereof (3) that read properly, the citedWTO clauses do not conflict with the Constitution and (4)that the WTO

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20 Par. 4, Article XVI, WTO Agreement, Uruguay Round of MultilateralTrade Negotiations, Vol. 1, p. 146.

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Agreement contains sufficient provisions to protectdeveloping countries like the Philippines from theharshness of sudden trade liberalization.

We shall now discuss and rule on these arguments.

Declaration of Principles Not SelfExecutingBy its very title, Article II of the Constitution is adeclaration of principles and state policies. Thecounterpart of this article in the 1935 Constitution

21 is

called the basic political creed of the nation by DeanVicente Sinco.

22 These principles in Article II are not

intended to be selfexecuting principles ready for



enforcement through the courts.23 They are used by the

judiciary as aids or as guides in the exercise of its pow er ofjudicial review, and by the legislature in its enactment oflaws. 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 XIIare not selfexecuting provisions, the disregard of whichcan give rise to a cause of action in the courts. They do notembody judicially enforceable constitutional rights butguidelines for legislation.

In the same light, we held in Basco vs. Pagcor 25 that

broad constitutional principles need legislative enactmentsto implement them, thus:

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21 Also entitled Declaration of Principles . The nomenclature in the1973 Charter is identical with that in the 1987s.

22 Philippine Political Law, 1962 Ed., p. 116.23 Bernas, The Constitution of the Philippines: A Comm entary, Vol. II,

1988 Ed., p. 2. In the very recent case of Manila Prince Hotel vs. GSIS,G.R. No. 122156, February 3, 1997, p. 8, it was held that A provisionwhich lays down a general principle, such as those found in Art. II of the1987 Constitution, is usually not selfexecuting.

24 246 SCRA 540, 564, July 17, 1995. See also Tolentino vs. Secretary ofFinance, G.R. No. 115455 and consolidated cases, August 25, 1995.

25 197 SCRA 52, 68, May 14, 1991.

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On petitioners allegation that P.D. 1869 violates Sections 11(Personal Dignity) 12 (Family) and 13 (Role of Youth) of Article IISection 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 ofprinciples and policies. As such, they are basically not selfexecuting, meaning a law should be passed by Congress to clearlydefine and effectuate such principles.

In general, therefore, the 1935 provisions were not intended to be selfexecuting principles ready for enforcement through the courts. They wererather directives addressed to the executive and to the legislature. If the



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