G.R. No.

118295 May 2, 1997

WIGBERTO E. TAÑADA, Et. Al, petitioners,

vs.
EDGARDO ANGARA, Et. Al., respondents.

PANGANIBAN, J.:

TOPIC & PRINCIPLE:

Relationship between international and Philippine domestic law.

International Law: While sovereignty has traditionally been deemed absolute and all—
encompassing on the domestic level, it is however subject to restrictions and limitations
voluntarily agreed to by the Philippines, expressly or impliedly, as a member of the family of
nations.

Doctrine of Incorporation: By the doctrine of incorporation, the country is bound by generally

accepted principles of international law, which are considered automatically part of our own
laws.

Treaties: 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.

Treaties; World Trade Organization; The Senate Act, after deliberation and voting, of voluntarily
and overwhelmingly giving its consent to the WTO Agreement thereby making it “a part of the
law of the land,” is a legitimate exercise of its sovereign duty and power.

FACTS:
On April 15, 1994, the Philippine Government represented by its Secretary of the Department of
Trade and Industry signed the Final Act binding the Philippine Government to submit to its
respective competent authorities the WTO (World Trade Organization) Agreements to seek
approval for such. On December 14, 1994, Resolution No. 97 was adopted by the Philippine
Senate to ratify the WTO Agreement.

Petitioners prayed for the nullification, on constitutional grounds, of the concurrence of the
Philippine Senate in the ratification by the President of the Philippines of the Agreement
Establishing the World Trade Organization and for the prohibition of its implementation and
enforcement through the release and utilization of public funds, the assignment of public officials
and employees, as well as the use of government properties and resources by respondent-heads
of various executive offices concerned therewith.
The WTO opens access to foreign markets, especially its major trading partners, through the
reduction of tariffs on its exports, particularly agricultural and industrial products. Thus, provides
new opportunities for the service sector cost and uncertainty associated with exporting and more
investment in the country. These are the predicted benefits as reflected in the agreement and as
viewed by the signatory Senators, a “free market” espoused by WTO.

Petitioners contended that WTO agreement violates 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” as

1. 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.

ISSUE:
Whether provisions of the Agreement Establishing the World Trade Organization unduly limit,
restrict and impair Philippine sovereignty specifically the legislative power which, under Sec. 2,
Article VI, and 1987 Philippine Constitution is ‘vested in the Congress of the Philippines.

RULING:
The Court DISMISSED the petition. It sustained the concurrence of the Philippine Senate of the
President’s ratification of the Agreement establishing the WTO.

The WTO agreement does not unduly limit, restrict, and impair the Philippine sovereignty,
particularly the legislative power granted by the Philippine Constitution. The Senate was acting
in the proper manner when it concurred with the President’s ratification of the agreement.
While sovereignty has traditionally been deemed absolute and all-encompassing on the domestic
level, it is however subject to restrictions and limitations voluntarily agreed to by the Philippines,
expressly or impliedly, as a member of the family of nations. Unquestionably, the Constitution
did not envision a hermit-type isolation of the country from the rest of the world. In its
Declaration of Principles and State Policies, the Constitution “adopts the generally accepted
principles of international law as part of the law of the land, and adheres to the policy of peace,
equality, justice, freedom, cooperation and amity, with all nations.” 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. A state which has contracted valid international obligations is bound to
make in its legislations such modifications as may be necessary to ensure the fulfilment of the
obligations undertaken.”

By their inherent nature, treaties really limit or restrict the absoluteness of sovereignty. By their
voluntary act, nations may surrender some aspects of their state power in exchange for greater
benefits granted by or derived from a convention or pact. After all, states, like individuals, live
with coequals, and in pursuit of mutually covenanted objectives and benefits, they also
commonly agree to limit the exercise of their otherwise absolute rights. Thus, treaties have been
used to record agreements between States concerning such widely diverse matters as, for
example, the lease of naval bases, the sale or cession of territory, the termination of war, the
regulation of conduct of hostilities, the formation of alliances, the regulation of commercial
relations, the settling of claims, the laying down of rules governing conduct in peace and the
establishment of international organizations. The sovereignty of a state therefore cannot in fact
and in reality be considered absolute. Certain restrictions enter into the picture: (1) limitations
imposed by the very nature of membership in the family of nations and (2) limitations imposed
by treaty stipulations. As aptly put by John F. Kennedy, “Today, no nation can build its destiny
alone. The age of self-sufficient nationalism is over. The age of interdependence is here.”

The WTO reliance on “most favored nation,” “national treatment,” and “trade without
discrimination” cannot be struck down as unconstitutional as in fact they are rules of equality
and reciprocity that apply to all WTO members. Aside from envisioning a trade policy based on
“equality and reciprocity,” the fundamental law encourages industries that are “competitive in
both domestic and foreign markets,” thereby demonstrating a clear policy against a sheltered
domestic trade environment, but one in favor of the gradual development of robust industries that
can compete with the best in the foreign markets. Indeed, Filipino managers and Filipino
enterprises have shown capability and tenacity to compete internationally. And given a free trade
environment, Filipino entrepreneurs and managers in Hongkong have demonstrated the Filipino
capacity to grow and to prosper against the best offered under a policy of laissez faire.