Wigberto Tañada vs Edgardo Angara

G.R. No. 118295 – 338 Phil. 546 – 272 SCRA 18 – Political Law – Constitutional Law – General Principles – Elements of a State – Sovereignty – Doctrine of Auto-Limitation – Treaties; Pacta Sunt Servanda

Declaration of Principles and State Policies – Filipino First Policy; Trade Protectionism; Exceptions

In August 1994, the World Trade Organization was founded in Morroco. One of the founding States was the Philippines. The WTO aims to trim tariffs among member states in order to facilitate freer international trade.

After the Philippines signed the WTO Treaty, the Senate passed a Resolution ratifying the treaty. Sen. Wigberto Tañada, who was not in favor of the treaty, filed a petition before the Supreme Court questioning the constitutionality of the treaty. He argued that the treaty is contrary to the following constitutional provisions:

Sec. 19, Art. II: The State shall develop a self-reliant and independent national economy effectively controlled by Filipinos.

Sec. 10, Art. XII: The Congress shall enact measures that will encourage the formation and operation of enterprises whose capital is wholly owned by Filipinos.

In the grant of rights, privileges, and concessions covering the national economy and patrimony, the State shall give preference to qualified Filipinos.

Tañada argued that the treaty violates our sovereignty.

ISSUE: Whether or not Tañada is correct.

HELD: No. The 1987 Constitution did not intend for an isolationist economy. The Constitution takes into account the realities of the outside world as it requires the pursuit of “a trade policy that serves the general welfare and utilizes all forms and arrangements of exchange on the basis of equality and reciprocity”; and speaks of industries “which are competitive in both domestic and foreign markets” as well as of the protection of “Filipino enterprises against unfair foreign competition and trade practices.”

The Constitution indeed mandates a bias in favor of Filipino goods, services, labor and enterprises, but at the same time, it recognizes the need for business exchange with the rest of the world on the bases of equality and reciprocity and limits protection of Filipino enterprises only against foreign competition and trade practices that are unfair.

The WTO agreement does not infringe upon our sovereignty. Sovereignty has traditionally been deemed absolute and all-encompassing on the domestic level, it is however subject to restrictions and limitations voluntarily agreed to by the Philippines, expressly or impliedly, as a member of the family of nations. Unquestionably, the Constitution did not envision a hermit-type isolation of the country from the rest of the world. In its Declaration of Principles and State Policies, the Constitution “adopts the generally accepted principles of international law as part of the law of the land, and adheres to the policy of peace, equality, justice, freedom, cooperation and amity, with all nations.”

By the doctrine of incorporation, the country is bound by generally accepted principles of international law, which are considered to be automatically part of our own laws. One of the oldest and most fundamental rules in international law is pacta sunt servanda — international agreements must be performed in good faith. “A treaty engagement is not a mere moral obligation but creates a legally binding obligation on the parties x x x. A state which has contracted valid international obligations is bound to make in its legislations such modifications as may be necessary to ensure the fulfillment of the obligations undertaken.” Treaties really limit or restrict the absoluteness of sovereignty. By their voluntary act, nations may surrender some aspects of their state power in exchange for greater benefits granted by or derived from a convention or pact.

In fact, member states of the WTO are at par with each other. Unlike in the UN where major states have permanent seats and veto powers in the Security Council, in the WTO, decisions are made on the basis of sovereign equality, with each member’s vote equal in weight to that of any other. There is no WTO equivalent of the UN Security Council.

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