Tañada vs. Angara

The constitutional provisions mandating economic nationalism do not prohibit international treaties requiring national treatment of foreign products and services, provided such treaties are founded on equality and reciprocity; and the voluntary assumption of treaty obligations, which inherently limits sovereignty, does not constitute an unconstitutional impairment of legislative or judicial power. The Court held that Section 19, Article II of the Constitution is a non-self-executing principle, and that Sections 10 and 12, Article XII must be interpreted alongside Sections 1 and 13 of the same article, which envision industries competitive in foreign markets and trade policies based on reciprocity.

On April 15, 1994, Department of Trade and Industry Secretary Rizalino Navarro signed the Final Act Embodying the Results of the Uruguay Round of Multilateral Negotiations in Marrakesh, Morocco. By signing the Final Act, the Philippines agreed to submit the WTO Agreement for the consideration of its competent authorities and to adopt the Ministerial Declarations and Decisions. President Fidel V. Ramos submitted the WTO Agreement to the Philippine Senate for concurrence pursuant to Section 21, Article VII of the Constitution. The Senate adopted Resolution No. 97 on December 14, 1994, concurring in the ratification of the WTO Agreement. President Ramos signed the Instrument of Ratification on December 16, 1994.

• Signing of the Final Act: On April 15, 1994, Secretary Navarro signed the Final Act embodying the results of the Uruguay Round. The Final Act contained the WTO Agreement, the Ministerial Declarations and Decisions, and the Understanding on Commitments in Financial Services. By signing, the Philippines agreed to submit the WTO Agreement to its competent authorities for approval and to adopt the Ministerial Declarations and Decisions.
• Presidential Submission: President Ramos transmitted the documents to the Senate via two letters dated August 11, 1994. The second letter clarified that the submission included the Final Act, the WTO Agreement, the Ministerial Declarations and Decisions, and the Understanding on Commitments in Financial Services.
• Senate Concurrence: The Senate adopted Resolution No. 97 on December 14, 1994, concurring specifically "in the ratification by the President of the Philippines of the Agreement Establishing the World Trade Organization."
• The WTO "National Treatment" Clauses: The WTO Agreement includes Annexes 1, 2, and 3 (Multilateral Trade Agreements). Petitioners highlighted provisions requiring "national treatment"—where members must accord products, services, and nationals of other members treatment no less favorable than that accorded to their own—found in the Agreement on Trade-Related Investment Measures (TRIMS), the Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS), and the General Agreement on Trade in Services (GATS).
• Obligation to Conform Laws: The WTO Agreement requires each Member to ensure the conformity of its laws, regulations, and administrative procedures with its obligations under the annexed agreements. It also includes Article 34 of TRIPS, which places the burden of proof on the alleged infringer in process patent disputes under certain conditions.

• Petitioners argued that the "national treatment" and parity provisions of the WTO Agreement contravene the "Filipino First" policy enshrined in Section 19, Article II, and Sections 10 and 12, Article XII of the 1987 Constitution, which mandate a self-reliant and independent national economy effectively controlled by Filipinos and preferential treatment for Filipino labor, domestic materials, and locally produced goods.
• Petitioners maintained that the WTO requirement for members to ensure the conformity of their domestic laws with the agreement unduly limits, restricts, and impairs the legislative power of Congress, particularly the power to tax and the power to enact protectionist economic measures.
• Petitioners contended that Article 34 of the TRIPS Agreement intrudes upon the judicial power of the Supreme Court to promulgate rules concerning pleading, practice, and procedures, specifically rules of evidence.
• Petitioners asserted that the Senate concurrence was defective and insufficient because it concurred only in the WTO Agreement and not in the other documents contained in the Final Act, namely the Ministerial Declarations and Decisions and the Understanding on Commitments in Financial Services.

• Respondents countered that the constitutional provisions invoked by petitioners are not self-executing and merely set out general policies.
• Respondents argued that the nationalistic portions of the Constitution should not be read in isolation but must be related to other relevant provisions of Article XII, particularly Sections 1 and 13, which mandate a trade policy based on equality and reciprocity and encourage industries competitive in both domestic and foreign markets.
• Respondents maintained that the WTO Agreement does not conflict with the Constitution, as it contains sufficient provisions to protect developing countries from the harshness of sudden trade liberalization, such as longer implementation periods and lower tariff reduction rates.
• Respondents asserted that the Senate concurrence was valid because the Final Act itself required only the submission of the WTO Agreement for concurrence, and the Ministerial Declarations were deemed adopted without need of ratification.

• Procedural Issues: Whether the petition presents a justiciable controversy or involves a political question over which the Court has no jurisdiction.
• Substantive Issues: Whether the provisions of the WTO Agreement and its annexes contravene Sections 19, Article II and 10 and 12, Article XII of the 1987 Constitution. Whether the provisions of the WTO Agreement and its annexes unduly limit, restrict, or impair the exercise of legislative power by Congress. Whether the provisions of the WTO Agreement unduly impair or interfere with the exercise of judicial power by the Supreme Court in promulgating rules on evidence. Whether the concurrence of the Senate in the WTO Agreement alone—excluding the Final Act, Ministerial Declarations and Decisions, and the Understanding on Commitments in Financial Services—was sufficient and valid.

• Procedural: The Court ruled that the petition presents a justiciable controversy. When an action of the legislative branch is seriously alleged to have infringed the Constitution, it becomes the right and duty of the judiciary to settle the dispute. The 1987 Constitution explicitly vests judicial power with the duty to determine whether there has been a grave abuse of discretion amounting to lack or excess of jurisdiction on the part of any branch or instrumentality of the government.
• Substantive: The Court held that the WTO Agreement does not contravene the constitutional mandates of economic nationalism. Section 19, Article II is a declaration of principle and state policy that is not self-executing and cannot be the source of a cause of action. Sections 10 and 12, Article XII must be read alongside Sections 1 and 13 of the same article, which set the goals of national economic development and require the pursuit of a trade policy based on equality and reciprocity. The Constitution does not mandate autarky or economic seclusion, but rather envisions industries competitive in both domestic and foreign markets, protecting Filipino enterprises only against unfair foreign competition. The Court held that the WTO Agreement does not unduly impair legislative power. While the requirement to conform domestic laws to WTO obligations limits sovereignty, such limitations are valid when voluntarily assumed. By the doctrine of incorporation, the Philippines adopts generally accepted principles of international law as part of the law of the land. Under pacta sunt servanda, a state that has contracted valid international obligations is bound to make modifications in its legislation to ensure their fulfillment. The Constitution itself envisions limitations on sovereignty through adherence to the policy of cooperation and amity with all nations. The Court held that the WTO Agreement does not impair judicial power. Article 34 of the TRIPS Agreement merely provides for a disputable presumption in process patent infringement cases, which does not unreasonably alter the rules of evidence. This presumption is consistent with due process, the concept of adversarial dispute settlement, and existing Philippine patent law. The Court held that the Senate concurrence was valid and sufficient. A Final Act is not the treaty itself but a summary of the proceedings of a diplomatic conference. The Final Act explicitly directed signatories to submit the WTO Agreement for concurrence. The Ministerial Declarations and Decisions were deemed adopted without need of ratification, and the Understanding on Commitments in Financial Services did not apply to the Philippines. The Senate was well aware of what it was concurring in, as evidenced by its deliberations.

• Non-Self-Executing Constitutional Provisions — Principles and state policies enumerated in Article II of the Constitution are not self-executing and cannot give rise to a cause of action in the courts. They do not embody judicially enforceable constitutional rights but serve as guidelines for legislation and aids for judicial review.
• Pacta Sunt Servanda — International agreements must be performed in good faith. A state which has contracted valid international obligations is bound to make in its legislation such modifications as may be necessary to ensure the fulfillment of the obligations undertaken.
• Sovereignty as Auto-Limitation — Sovereignty is subject to restrictions and limitations voluntarily agreed to by the Philippines, expressly or impliedly, as a member of the family of nations. 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.
• 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 pursuant to Section 2, Article II of the Constitution.

• "Economic self-reliance is a primary objective of a developing country that is keenly aware of overdependence on external assistance for even its most basic needs. It does not mean autarky or economic seclusion; rather, it means avoiding mendicancy in the international community. Independence refers to the freedom from undue foreign control of the national economy, especially in such strategic industries as in the development of natural resources and public utilities."
• "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."
• "While the Constitution indeed mandates a bias in favor of Filipino goods, services, labor and enterprises, 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."
• "As to whether such exercise was wise, beneficial or viable is outside the realm of judicial inquiry and review. That is a matter between the elected policy makers and the people."

• Kilosbayan, Incorporated vs. Morato, 246 SCRA 540 (1995) — Followed. The Court cited this case to support the ruling that the principles and state policies enumerated in Article II are not self-executing provisions and do not embody judicially enforceable constitutional rights.
• Basco vs. Pagcor, 197 SCRA 52 (1991) — Followed. Cited to reinforce the principle that broad constitutional principles need legislative enactments to implement them and are basically not self-executing.
• Manila Prince Hotel vs. GSIS, G.R. No. 122156 (1997) — Distinguished. The Court acknowledged that Section 10, Article XII was held to be self-executing in this case, but clarified that it is enforceable only in regard to grants of rights, privileges, and concessions covering national economy and patrimony, not to every aspect of trade and commerce.
• Oposa vs. Factoran, Jr., 224 SCRA 792 (1993) — Followed. The Court cited the concurring opinion of Justice Feliciano to explain that due process and the lack of judicial authority to wade into social and economic policy-making require that a legal right claimed to have been violated must be a specific, operable legal right rather than a broad constitutional policy.

• Section 19, Article II, 1987 Constitution — Provides that the State shall develop a self-reliant and independent national economy effectively controlled by Filipinos. The Court held this to be a non-self-executing principle that does not mean autarky or economic seclusion.
• Sections 10 and 12, Article XII, 1987 Constitution — Mandate that Congress enact measures encouraging Filipino-owned enterprises and that the State promote the preferential use of Filipino labor, domestic materials, and locally produced goods. The Court held these must be read alongside Sections 1 and 13 of the same Article, which favor equality and reciprocity in trade.
• Section 1, Article VIII, 1987 Constitution — Defines judicial power as including the duty to settle actual controversies and determine whether there has been a grave abuse of discretion amounting to lack or excess of jurisdiction on the part of any branch or instrumentality of the government. The Court relied on this to assume jurisdiction over the petition.
• Section 21, Article VII, 1987 Constitution — Requires that no treaty or international agreement shall be valid and effective unless concurred in by at least two-thirds of all the Members of the Senate. The Court found the Senate complied with this provision via Resolution No. 97.
• Article XVI, Paragraph 4, WTO Agreement — Requires each Member to ensure the conformity of its laws, regulations, and administrative procedures with its obligations as provided in the annexed agreements. The Court held this does not unconstitutionally impair legislative power but is a valid exercise of sovereignty auto-limitation.
• Article 34, TRIPS Agreement — Shifts the burden of proof in civil proceedings for process patent infringement. The Court held this merely creates a disputable presumption consistent with due process and existing patent law.

Narvasa, C.J., Regalado, Davide, Jr., Romero, Bellosillo, Melo, Puno, Kapunan, Mendoza, Francisco, Hermosisima, Jr., and Torres, Jr., JJ., concur. Padilla and Vitug, JJ., concur in the result.