TAÑADA​ v. ANGARA, G.R. No.

118295, 02 May 1997

FACTS

The World Trade Organization or WTO was established in Marrakesh, Morocco in 1995.
The Philippines, one of its founding members, joined the Agreement as it would greatly
benefit their economy because they would enjoy access to foreign markets, and
reduction of tariffs on exports. President Fidel V. Ramos also saw numerous
opportunities in joining the Agreement such as new opportunities for the services sector,
the reduction of costs and uncertainty associated with exporting, and the attraction of
more investments into the country. On April 15, 1994, Rizalino Navarro, DTI Secretary,
signed in Marrakesh, Morocco, the Final Act Embodying the Results of the Uruguay
Round of Multilateral Negotiations. On December 14, 1994, the Senate concurred in the
ratification of the President of the Philippines of the Agreement Establishing the WTO
which includes various agreements and associated legal instruments. On December 16,
1994,the President signed the Instrument of Ratification.

ISSUES

Does the Agreement ratifying the WTO contravene the provisions of the Philippine
Constitution?

Does the ratification of the Agreement impair the exercise of sovereignty and other
inherent powers (legislative, judicial) of the Philippines as a state?

Is the concurrence of the Senate, valid?

ARGUMENTS

Petitioners argue that:

(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) the WTO "intrudes, limits and/or impairs" the constitutional powers of both Congress
and the Supreme Court, the instant petition before this Court assails 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.
RULING

The ratification of the Agreement does not impair the exercise of sovereignty and other
inherent powers of the Philippines as a state. Doctrine of incorporation, Section 2 Article
II of the Philippine Constitution, wherein the Philippines adopts the generally accepted
principles of international law and international jurisprudence as part of the law of the
land and adheres to the policy of peace, cooperation, and amity with all nations. By this
doctrine, the country is bound by generally accepted principles of international law,
which are considered to be automatically part of our own laws. The Agreement is also
governed by the oldest and most fundamental rules in international law, ​pacta sunt
servanda ​or international agreements must be performed in good faith. A treaty creates
a legally binding obligation on the parties. A state that contracted such international
obligations is bound to make in its legislation modifications that are necessary to fulfill
the obligations undertaken. Treaties inherently restrict the absoluteness of sovereignty.
Nations may surrender some aspects of their power voluntarily in exchange for benefits
granted by or derived from a convection or pact. This Agreement may be considered as
rules of equality and reciprocity that applies to WTO members. States under this
Agreement agreed to limit the exercise of their otherwise absolute rights.

According to the Supreme Court, We find no "patent and gross" arbitrariness or

despotism "by reason of passion or personal hostility" in such exercise. Hence, the
concurrence of the Senate is valid.
BRITISH AMERICAN TOBACCO v. CAMACHO, G.R. No. 163583, 20 August 2008

FACTS

June 2001, petitioner British American Tobacco introduced and sold Lucky Strike, Lucky
Strike Lights and Lucky Strike Menthol Lights cigarettes w/ SRP P 9.90/pack - Initial
assessed excise tax: P 8.96/pack (Sec. 145 [c])

February 17, 2003: RR 9-2003: Periodic review every 2 years or earlier of the current
net retail price of new brands and variants thereof for the purpose of the establishing
and updating their tax classification

March 11, 2003: RMO 6-2003: Guidelines and procedures in establishing current net
retail prices of new brands of cigarettes and alcohol products

August 8, 2003: RR 22-2003: Implement the revised tax classification of certain new
brands introduced in the market after January 1, 1997 based on the survey of their
current net retail prices. This increased the excise tax to P13.44 since the average net
retail price is above P 10/pack.

ISSUES

1. Does the order pertaining to the classification of goods violate the provisions of the
GATT?

2. Does the classification warrant the resort to dispute settlement mechanisms before
the WTO?

ARGUMENTS

Petitioner contends that RA 8240, as amended by RA 9334, and its implementing rules
and regulations violate the General Agreement on Tariffs and Trade (GATT) of 1947, as
amended, specifically, Paragraph 2, Article III, Part II: “The products of the territory of
any contracting party imported into the territory of any other contracting party shall not
be subject, directly or indirectly, to internal taxes or other internal charges of any kind in
excess of those applied, directly or indirectly, to like domestic products. Moreover, no
contracting party shall otherwise apply internal taxes or other internal charges to
imported or domestic products in a manner contrary to the principles set forth in
paragraph 1.”
It claims that it is the duty of this Court to correct, in favor of the GATT, whatever
inconsistency exists between the assailed law and the GATT in order to prevent
triggering the international dispute settlement mechanism under the GATT-WTO
Agreement.

RULING

We disagree.

The classification freeze provision uniformly applies to all newly introduced brands in
the market, whether imported or locally manufactured. It does not purport to single out
imported cigarettes in order to unduly favor locally produced ones. Further, petitioner’s
evidence was anchored on the alleged unequal tax treatment between old and new
brands which involves a different frame of reference vis-à-vis local and imported
products. Petitioner has, therefore, failed to clearly prove its case, both factually and
legally, within the parameters of the GATT.

At any rate, even assuming arguendo that petitioner was able to prove that the
classification freeze provision violates the GATT, the outcome would still be the same.
The GATT is a treaty duly ratified by the Philippine Senate and under Article VII, Section
2181 of the Constitution, it merely acquired the status of a statute.82 Applying the basic
principles of statutory construction in case of irreconcilable conflict between statutes,
RA 8240, as amended by RA 9334, would prevail over the GATT either as a later
enactment by Congress or as a special law dealing with the taxation of sin products.
Thus, in Abbas v. Commission on Elections,83 we had occasion to explain:

Petitioners premise their arguments on the assumption that the Tripoli Agreement is
part of the law of the land, being a binding international agreement. The Solicitor
General asserts that the Tripoli Agreement is neither a binding treaty, not having been
entered into by the Republic of the Philippines with a sovereign state and ratified
according to the provisions of the 1973 or 1987 Constitutions, nor a binding international
agreement.

We find it neither necessary nor determinative of the case to rule on the nature of the
Tripoli Agreement and its binding effect on the Philippine Government whether under
public international or internal Philippine law. In the first place, it is now the Constitution
itself that provides for the creation of an autonomous region in Muslim Mindanao. The
standard for any inquiry into the validity of R.A. No. 6734 would therefore be what is so
provided in the Constitution. Thus, any conflict between the provisions of R.A. No. 6734
and the provisions of the Tripoli Agreement will not have the effect of enjoining the
implementation of the Organic Act. Assuming for the sake of argument that the Tripoli
Agreement is a binding treaty or international agreement, it would then constitute part of
the law of the land. But as internal law it would not be superior to R.A. No. 6734, an
enactment of the Congress of the Philippines, rather it would be in the same class as
the latter [SALONGA, PUBLIC INTERNATIONAL LAW 320 (4th ed., 1974), citing Head
Money Cases, 112 U.S. 580 (1884) and Foster v. Nelson, 2 Pet. 253 (1829)]. Thus, if at
all, R.A. No. 6734 would be amendatory of the Tripoli Agreement, being a subsequent
law. Only a determination by this Court that R.A. No. 6734 contravenes the Constitution
would result in the granting of the reliefs sought. (Emphasis supplied)