Taada v. Angara G.R. No.

118295 | May 2, 1997

Petitioners: Wigberto Tanada, et al.
Respondents: Edgardo Angara, et al.

Summary: Petitioners assail the constitutionality of the Philippines acceding to the World Trade Organization for
being violative of provisions which are supposed to give preference to Filipino workers and economy and on the
ground that it infringes legislative and judicial power. The WTO, through it provisions on most favored nation
and national treatment, require that nationals and other member countries are placed in the same footing in
terms of products and services. However, the Court brushed off these contentions and ruled that the WTO is
constitutional. Sections 10 and 12 of Article XII (National Economy and Patrimony) should be read in relation to
Sections 1 and 13 (promoting the general welfare). Also, Section 10 is self-executing only to rights, privileges,
and concessions covering national economy and patrimony but not every aspect of trade and commerce. There
are balancing provisions in the Constitution allowing the Senate to ratify the WTO agreement. Also, the
Constitution doesnt rule out foreign competition. States waive certain amount of sovereignty when entering into
treaties.

Facts:
This case questions the constitutionality of the Philippines being part of the World Trade Organization,
particularly when President Fidel Ramos signed the Instrument of Ratification and the Senate
concurring in the said treaty.
Following World War 2, global financial leaders held a conference in Bretton Woods to discuss global
economy. This led to the establishment of three great institutions: International Bank for Reconstruction
and Development (World Bank), International Monetary Fund and International Trade Organization.
However, the ITO failed to materialized. Instead, there was the General Agreement on Trades and
Tariffs. It was on the Uruguay Round of the GATT that the WTO was then established.
The WTO is an institution regulating trade among nations, including the reduction of tariff and barriers.
Petitioners filed a case assailing 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.
It is petitioners position that the national treatment and parity provisions of the WTO Agreement
place nationals and products of member countries on the same footing as Filipinos and local products,
in contravention of the Filipino First policy of the Constitution. They allegedly render meaningless the
phrase effectively controlled by Filipinos.

Issue 1: Does the petition present a justiciable controversy? YES!
In seeking to nullify the Senates act as being unconstitutional, the petition no doubt raises a justiciable
controversy. It becomes not only the right but in fact the duty of the judiciary to settle the dispute

Issue 2: Do the provisions of the WTO Agreement contravene Section 19, Article II and Section 10 & 12, Artilce
XII of the 1987 Constitution? NO!

Petitioners Contentions:
Petitioners argue that the letter, spirit and intent of the Constitution mandating economic nationalism
are violated by the so-called parity provisions and national treatment clauses scattered in parts of
WTO Agreement
o This is in view of the most-favored nation clause (MFN) of the TRIMS (trade-related investment
measures), TRIPS (Trade Related aspects of intellectual property rights), Trade in Services,
and par. 4 of Article III of GATT 1994.
o shall be accorded treatment no less favorable than that accorded to like products of national
origin
Sec. 19, Art II:The State shall develop a self-reliant and independent national economy effectively
controlled by Filipinos.
Sec. 10, Art XII: 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.
Sec. 12, Art XII: The State shall promote the preferential use of Filipino labor, domestic materials and
locally produced goods, and adopt measures that help make them competitive.

Ruling:
These provisions are not self-executing
o Merely guides in the exercise of judicial review and in making laws.
Secs. 10 and 12 of Article XII should be read and understood in relation to the other sections in said
article, especially Sec. 1 and 13:
o A more equitable distribution of opportunities, income and wealth;
o A sustained increase in the amount of goods and services
o An expanding productivity as the key to raising the quality of life
The issue here is not whether this paragraph of Sec. 10 of Art. XII is self-executing or not. Rather, the
issue is whether, as a rule, there are enough balancing provisions in the Constitution to allow the
Senate to ratify the Philippine concurrence in the WTO Agreement. And we hold that there are.
WTO Recognizes Need to Protect Weak Economies
o 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
members vote equal in weight.
Specific WTO Provisos Protect Developing Countries
o Tariff reduction developed countries must reduce at rate of 36% in 6 years, developing 24%
in 10 years
o Domestic subsidy developed countries must reduce 20% over six (6) years, developing
countries at 13% in 10 years
o Export subsidy developed countries, 36% in 6 years; developing countries, 3/4ths of 36% in
10 years
Constitution Does Not Rule Out Foreign Competition
o Encourages industries that are competitive in both domestic and foreign markets
The Court will not pass upon the advantages and disadvantages of trade liberalization as an economic
policy. It will only perform its constitutional duty of determining whether the Senate committed grave
abuse of discretion

Issue 3: Does the text of the WTO and its Annexes limit, restrict or impair the exercise of legislative power by
Congress? NO!
A portion of sovereignty may be waived without violating the Constitution.
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.
The sovereignty of a state therefore cannot in fact and in reality be considered absolute. Certain
restrictions enter into the picture: limitations imposed by the nature of membership in the family of
nations & limitations imposed by treaty stipulations.