The People’s Constitutional Right to Know the Full Texts of Treaties and Executive Agreements: The Case of JPEPA
Introduction
In the latter part of 2005, the cause-oriented AKBAYAN, et. al., filed a petition for prohibition and mandamus, under Rule 65, before the Supreme Court, against the government, represented by HON. THOMAS G. AQUINO, in his capacity as Chairman and Chief Delegate of the Philippine Coordinating Committee for the Japan-Philippines Economic Partnership Agreement, et . al., seeking to compel the government to disclose the full text of the Japan-Philippines Economic Partnership Agreement (JPEPA) and seeking the issuance of a temporary restraining order against its final negotiation. The substance of the petition is digested hereinbelow, for legal research purposes of the readers.
The World Trade Organization (WTO) operates the global and liberalized multilateral trading system on the following foundational principles:
(1) non-discrimination, which is operationalized among trading partners through the “most-favored-nation” or “MFN” principle (i.e., a special favor extended to one trading partner must be extended to all other trading partners in the WTO) and the “national treatment” principle (i.e., foreigners should be treated the same way as locals);
(2) freer trade by lowering trade barriers through negotiations among trading partners;
(3) predictability through binding of tariffs and transparency in trade rules; and
(4) promotion of competition.
Liberalization refers to the freeing of trade, investment, and capital flows between countries.
Globalization refers to the integration of product and financial markets facilitated by liberalization, as well as the integration of production facilities in different countries under the aegis or ownership of multinational corporations. opened up the Philippine economy to foreign competition on a massive scale, through the various trade commitments undertaken by the Philippines unilaterally through the Tariff Reform Program,4 multilaterally as a member of the World Trade Organization,5 and regionally as a member of the ASEAN Free Trade Area (“AFTA”).6 The effects of these trade commitments on the average Filipino have been manifold, affecting not just prices on agricultural and industrial products, but more importantly, the job security and employment of the Filipino workers who make them, the household income of the families who rely on them, and the continued viability of the local industries who employ them. Moreover, these trade commitments determine to a large extent the flow of revenues into the national treasury, and shape how our economy is run, what economic policies are adopted, what legislation is passed, and in more extreme cases, how the Philippine Constitution and existing legislation is to be amended or revised.
A free trade area refers to a group of countries that adopt free trade (i.e., zero tariffs and no other trade restrictions) among themselves, without necessarily changing the trade barriers that each member has for countries outside the group. The AFTA was implemented in 1992 via the Common Effective Preferential Tariff Scheme, which requires ASEAN countries to systematically reduce their tariffs until full liberalization is achieved. The AFTA is targeted to be fully implemented by 2010.
In a sense, the trade commitments of the Philippines, which is a founding member of the WTO, determine the state of its economy and the lives of all Filipinos who are part of that economy.
Overview and Nature of JPEPA
The JPEPA is a bilateral preferential trade agreement between Japan and the Philippines that seeks to remove barriers to trade, and to promote a freer trans-border flow of the trade of goods, persons, services, and capital between the two countries, resulting in a free trade area between the two countries. The JPEPA is being negotiated in the context of an ASEAN-Japan Comprehensive Economic Partnership (“CEP”), which was proposed by Prime Minister Koizumi to ASEAN in January 2002. The JPEPA will constitute the Philippine component of such Japan-ASEAN CEP. The JPEPA will inevitably affect much of the Philippine economy given its wide coverage. The JPEPA will cover (1) trade in goods, (2) rules of origin, (3) customs procedures, (4) paperless trading, (5) emergency measures, (6) trade in services; movement of natural persons, (8) investment, (9) mutual recognition, (10) competition policy, (11) intellectual property, (12) government procurement, (13) bilateral cooperation, (14) improvement of the business environment, and (15) dispute avoidance and settlement.
Trade in goods covers substantially all of the 11,000++ tariff lines of the Tariff and Customs Code, encompassing agricultural and food products (Chapters 1-24), mining products (Chapters 25-26), and manufactured and industrial products (Chapters 27-97). This section of the JPEPA consists primarily of the reduction of tariff rates, with full tariff liberalization (i.e., reduction of tariffs to 0%) to take effect in 2010. It must be noted that the JPEPA stands to affect the country’s MFN tariff rates, which, as previously mentioned, are governed by the country’s unilateral trade commitments under the TRP, and its multilateral trade commitments under the WTO.
After almost a year of indecision as to whether the JPEPA is a mere executive agreement or a full treaty, the DFA finally announced in October 2005 that JPEPA is a treaty that will require the concurrence of the Senate.
The JPEPA is a “first” for the Philippines in many respects. As the first bilateral free trade agreement that the Philippines will be entering into, the JPEPA will necessarily set a precedent for all future trade negotiations that the country will embark on. Also, as the first possible Economic Partnership Agreement (“EPA”) within ASEAN
As revealed by Philippine trade law experts Justice Florentino Feliciano and Prof. Ma. Lourdes Sereno – who have been given privileged access to the full text of the JPEPA29 - during the hearings of the Special Committee on Globalization of the House of Representatives (the “Committee”) on 31 August 2005 and 12 October 2005, the JPEPA is not just any other ordinary bilateral trade agreement, but a “mega-treaty.”
Reportedly an amalgam of a Bilateral Investment Treaty and a Bilateral Free Trade Agreement, the JPEPA adopts many key features of the North American Free Trade Agreement between the United States, Canada and Mexico, which took ten (10) years to negotiate before finally being signed in its eleventh year into a bilateral agreement, it must be because they think it will benefit them. Justice Feliciano and Prof. Sereno have warned that such a combined treaty would have difficulties that are “twice as large, twice as formidable” than if they were negotiated separately, and thus, the Philippine government needs to be “twice as awake, twice as vigilant” in determining whether the country is indeed ready to undertake a treaty of this nature. Prof. Sereno stated that the implications of JPEPA are “very far-reaching”, and may possibly require full-bodied legislation and/or amendments to existing legislation. She thus warned that the Philippine government should not be rushed into concluding and ratifying the JPEPA. Despite its enormous implications on the Philippine economy and national life, however, the issue of the JPEPA has unfortunately not been sufficiently publicized so as should not at all be hurried, but must be afforded all the scrutiny possible not only because of its impact on legislation, and that is one very big portion already on the existing legislation, but also because of the administrative and financial resource requirements in order that the Philippines can manage this now very complicated obligation and relationship it will have vis-Ã -vis Japan. So it may also require therefore that there be budgetary apportioning to handle these complications. So it is not a simple question of whether we are recognizing ordinary investor rights, but it may take on the nature of finding out the state of readiness that we have in administering a NAFTA-type treaty.”
In his testimony during the Committee hearing on 12 October 2005, Justice Feliciano stated:
“x x x Sir, the JPEPA is an amalgam of two (2) distinct agreement. It is an amalgam of a BIT, a Bilateral Investment Treaty and a Bilateral Free Trade Agreement. So it is a combination of both. What that means, Sir, into (sic) my personal view, is that you must be twice as awake, twice as vigilant, make sure that you are able to examine very carefully the provisions of the agreement.
“Let me mention that this is the first so-called economic protection agreement combining a BIT with a Bilateral Free Trade Agreement that Japan is seeking to enter. All the other agreements with the ASEAN countries are BIT or are Bilateral Free Trade Agreements. But we are the first one and I think they are experimenting with us to see how we will react to a combined treaty. I say, the difficulties are twice as large, twice as formidable.
“The example I have in mind is the NAFTA. NAFTA is the North American Free Trade Agreement. That, Sir, is a combination of an investment agreement and a free trade agreement. There are only three (3) countries who are members of the NAFTA. That’s the US, Canada and Mexico. And that agreement took ten (10) years to negotiate. It was signed on the 11th year. And the US did not sign it until it came out with a statute, an act of Congress, identifying the requirements of … and the positions of the United States.
“So, if USec Aquino will forgive an unsolicited piece of advice, we should try to separate the two (2) because each one is already sufficiently difficult to deal with. Let’s not make life too hard for ourselves. Let’s do it one by one.” to come within the scope of popular public perception. On the few occasions that it has managed to receive coverage in the newspapers, it is usually relegated to an inconspicuous corner of the business pages. “
The petition assailed the government for its failure to disclose the full text of the JPEPA, even to members of Congress, citing the following provisions of the 1987 Constitution: Article III, Section 7, which guarantees the right of the people to information on matters of public concern; Article II, Section 28, which provides that the state adopts and implements a policy of full public disclosure of all its transactions involving public interest; Article XI, Section 1, which provides that public officers and employees must at all times be accountable to the people; and Article XIII, Section 16, which guarantees the right of the people and their organizations to effective and reasonable participation at all levels of social, political, and economic decision-making. It also cited Article VII, Section, which provides 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.
Statement of Facts Showing the Refusal of Government
To Disclose the Text of the Agreement
In January 2002, Japanese Prime Minister Junichiro Koizumi visited the Philippines and four (4) other ASEAN countries. During this visit, he proposed the “Initiative for Japan-ASEAN Comprehensive Economic Partnership”.
In May 2002, during her visit to Japan, President Gloria Macapagal Arroyo proposed to Prime Minister Koizumi that a working group be set up to study the possibility of establishing an economic partnership agreement between the Philippines and Japan.
In June 2002, then DTI Secretary Manuel Roxas III wrote to Japanese Minister Takeo Hiranuma to put in place a mechanism by which bilateral discussions could commence between the Philippines and Japan on the possibility of forging a JPEPA.
In August 2002, informal consultations were held in Tokyo to discuss the modalities for proceeding with the bilateral consultations. It was agreed that a Working Group on the JPEPA would be established. The Terms of Reference of such Working Group were agreed upon as well.
In October 2002, the Working Group on the JPEPA was officially formed. Consisting of representatives from concerned government agencies of Japan and the Philippines, the Working Group was tasked with studying the possible content, substance, and coverage of a mutually beneficial economic partnership between the two countries, including the possibility of forming a free trade area (FTA).
On 28 May 2003, the Philippine Coordinating Committee (“PCC”), which was tasked to study and negotiate the proposed JPEPA, was created under Executive Order No. 213. The PCC would be composed of representatives from eighteen government agencies, and would be co-chaired by the DFA Undersecretary for International Economic Relations and the DTI Undersecretary for International Trade. The PCC was tasked to formulate recommended Philippine positions for the meetings and negotiations with the Japanese counterpart, conduct consultations with concerned government and private sector representatives, and draft a proposed framework for the JPEPA and its implementing agreements.35
During the 5th Working Group meeting held on June 8-9, 2003, the Working Group indicated that both countries were ready to proceed to the next level of discussions and thus concluded its work. The Joint Coordinating Team (JCT) for JPEPA was then created; it held its inaugural meeting on September 26-27, 2003.
In October 2003, ASEAN signed the Framework Agreement for a Comprehensive Economic Partnership (CEP) with Japan. It is envisioned that the ASEAN-Japan CEP will be fully realized by 2012 for the original six (6) ASEAN member countries, including the Philippines.
On 11 December 2003, Prime Minister Koizumi and President Arroyo agreed that the Japanese and Philippine governments should start negotiations on JPEPA.
Formal JPEPA negotiations commenced in February 2004.
In their meeting on November 29, 2004, Prime Minister Koizumi and President Arroyo confirmed that both sides had reached agreements in principle on major elements of the JPEPA, and that they would expeditiously proceed with work to finalize the JPEPA, including negotiations on the text.
In January 2005, Cong. Lorenzo R. Tanada III and Cong. Aguja jointly filed House Resolution No. 551, calling for an inquiry into the bilateral trade agreements currently being negotiated by the Philippine government, particularly the JPEPA.
On 28 February 2005, the House Special Committee on Globalization (the “Committee”) held its first hearing on House Resolution No. 551. During this hearing,
PCC Chairman and DTI Undersecretary Thomas G. Aquino admitted that:
(a) This is the first time that the Philippines is entering into an agreement as comprehensive as this;
(b) Under the JPEPA, tariffs on industrial, agricultural, forest, and fishery products will be eliminated or reduced within ten (10) years;40 and
(c) There are costs to entering into the JPEPA, including foregone revenues resulting from tariff reduction.
Upon being questioned as whether the JPEPA was a treaty or an executive agreement, USec Aquino said that it would “still be decided upon later on by the Department of Foreign Affairs.”
On 03 May 2005, the day before the scheduled hearing of the Committee – and 65 days after the request for JPEPA-related documents and information had been made during the first Committee hearing - USec Aquino transmitted to the Committee a list of trade and investment agreements signed by the Philippines, together with prototypes of said agreements. However, with respect to the JPEPA, only the list of the members of the PCC was transmitted.
During the Committee hearing on 04 May 2005, USec Aquino revealed that the PCC was targeting to have the JPEPA negotiations completed by June 2005.
On 10 May 2005, Cong. Teves wrote to Executive Secretary Eduardo Ermita, requesting that the Committee be furnished all documents on the JPEPA, including the latest drafts of the agreement, as well as the requests and offers. Cong. Teves also requested for clarification on whether the JPEPA is being treated as an executive agreement or as a treaty.
On 31 May 2005, the Tariff Commission (“TC”) conducted a public hearing on the JPEPA, ostensibly to elicit reactions on the proposed tariff reduction schedule contained in the “Philippine offer.” However, only the “Philippine offer” was discussed during said public hearing. In response to questions of various attendees as to whether they would be given an opportunity to comment on the Japanese offer, TC Chairman Edgardo Abon stated that the Japanese offer is not being made available to the public.
In a letter to Cong. Teves dated 23 June 2005, Executive Secretary Eduardo R. Ermita informed him that the DFA would be unable to furnish the Committee all documents on the JPEPA since the proposed Agreement “has been a work in progress for about three years”. Sec. Ermita stated that a copy of the draft JPEPA would be forwarded to the Committee “as soon as the text thereof is settled and complete.” He likewise stated that the Committee would be informed of the nature of the JPEPA “once the legal review of the complete draft text is finished.”
On 25 October 2005, Cong. Aguja wrote to the individual members of the PCC, reiterating the Committee’s request for an update on the status of the JPEPA negotiations, the timetable for the conclusion and signing of the agreement, and a copy of the latest JPEPA working draft.60 Cong. Aguja also wrote to the Department Heads of the government agencies that were members of the PCC. None of the individual members of the PCC and department heads of the PCC member agencies provided Cong. Aguja with the requested draft of the JPEPA.
During the DTI Budget Hearing at the House of Representatives held on 10 November 2005, Cong. Aguja interpellated DTI Secretary Favila and USec Aquino regarding the JPEPA negotiations and the DTI’s repeated refusal to furnish Congress a copy of the full text of the JPEPA. USec Aquino refused to divulge the contents of JPEPA, saying that it would be necessary to secure the permission of the President.
As of the date of the filing of the Petition, the PCC has still refused to provide any official documents or information regarding the proposed date of signing for the JPEPA. Based on newspaper reports, however, the Philippine government expected to sign the JPEPA this December 2005.
Relief
In fine, the petition sough an order from the Supreme Court to compel the governmentot disclose the full text of the JPEPA citing relevant constitutional provisions: Article III, Section 7, which guarantees the right of the people to information on matters of public concern; Article II, Section 28, which provides that the state adopts and implements a policy of full public disclosure of all its transactions involving public interest; Article XI, Section 1, which provides that public officers and employees must at all times be accountable to the people; and Article XIII, Section 16, which guarantees the right of the people and their organizations to effective and reasonable participation at all levels of social, political, and economic decision-making; and Article VII, Section, which provides 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.
By:
Atty. Manuel J. Laserna Jr.
LCM Law, Las Pinas City, Philippines
Email - lcmnlaw@gmail.com
November 6, 2007
Acknowledgment: My friend Mr. Virgilio “ Bro. Boy” Hernandez, of Las Pinas City, recently provided me with a copy of the full text of the 2005 Akbayan petition.
