Jpepa remand to Executive eyed

By Butch Fernandez
Published frontpage in the October 9, 2007 issue of the BusinessMirror

THE Senate foreign relations committee conducting the ratification hearings on the Japan-Philippines Economic Partnership Agreement (Jpepa) will likely recommend that it be sent back to Malacañang for renegotiation amid findings of “constitutional infirmities” in the accord.

Since the Senate could not introduce amendments to correct the Jpepa’s defects, Sen. Miriam Santiago conceded there may not even be enough votes among senators sitting in the committee to bring the agreement to the floor for plenary consideration.

“I confess I won’t be able to defend the Jpepa on the Senate floor [as it stands today],” Santiago, committee chair, stated.

“We may [just] recommend sending it back to the Executive for renegotiation [without rejecting it],” Santiago told reporters after presiding over the penultimate ratification hearing, which ended with the senator instructing proponents and opponents of the accord to submit written memoranda justifying their positions before the panel decides the fate of the treaty by the end of October.

Sen. Mar Roxas II, chief of the trade and commerce committee cited the testimonies at Monday’s hearing by former senator Wigberto Tañada, former Justice Florentino Feliciano and UP Law Dean Merlin Magallona. They noted several legal “infirmities” in a number of provisions contained in the accord which, if allowed, would lead to violations of the Philippine Constitution.

Tañada, lead convenor of the Fair Trade Alliance, suggested to Santiago’s committee that “instead of ratifying it, the Jpepa must be remanded to the negotiating table to purge its imbalances.”

“The prudent action of the Senate is to withhold concurrence on Jpepa and [let the Executive] make the correction now and get back to the negotiating table to make our relations with Japan a fair, just, balanced and a sustainable one,” Tanada said.

Specifically, Tanada pointed to Article 12, Section 13 of the 1987 Constitution which provides that the State shall pursue a trade policy that serves the general welfare and utilizes all forms of arrangements on the basis of equality and reciprocity.

“Fair Trade believes that there are huge imbalances in Jpepa and these imbalances should first be purged if we want to grow economically and reduce poverty in our country,” he added.

As a constitutional law student, Senator Santiago admitted being gravely concerned “by what the eminent constitutional law experts have said. They were very strong in their view that the Jpepa is unconstitutional.”


“I have already emphasized that the constitutional issue is a threshold question because in a hypothetical case, even if the committee reports the treaty favorably to the plenary session in the Senate; and the Senate, by a minor miracle, approves it, the opposition, who is very emotional and committed to their cause, will certainly bring a case to the Supreme Court,” she said.

“If the Supreme Court decides that the Jpepa is unconstitutional, it will become unnecessary to discuss all other points.”

Santiago conceded that “if we go by the objective analysis of these independent experts, the Jpepa is dead.”
She explained that the power of the Senate is confined merely to ratification or rejection. “We cannot possibly amend the treaty. What we can do is send back the treaty to the executive branch for renegotiation for amendment, addition, or exclusion as we shall see fit in the Senate floor. But of course, they will take my recommendation as chair of the committee into full significance.”

Summing up the arguments raised at the hearing, Santiago said it was pointed out that the Philippine Constitution is one of the few in the world that has a nationality provision. “In other words, we consider that, as a matter of Filipino nationalism, certain areas of business, trade and industry should be reserved only for Filipino citizens or corporations that has at least a majority or controlling share is owned by Filipinos.”

“According to these experts, the Jpepa, if implemented, will violate these nationality provisions. Under the treaty, only Japanese entities

may invest in the Philippines. However, there is a practice in international trade law where, to get around that requirement, they can form a corporation which would be the “grandfather,” and that corporation can form another one, and so on, until it reaches point where the registered Japanese corporation is no longer controlled by the Japanese but might be controlled by Americans, Europeans or whoever. There is actually a backchannel or loophole in that provision, that is why it might be unconstitutional on that ground,” she added.

Senator Roxas agreed that the very foundation of the Jpepa is anchored on the constitutionality of the treaty. “And if it’s seen that there are infirmities here, then we need not go into the other provisions because, being unconstitutional, everything else that is part of it will also be ruled as unconstitutional,” he said.

According to Roxas, the accord’s “unconstitutionality” was argued well by Tañada, Feliciano and Magallona, “who are really legal heavyweights.” He added that even the committee chairman, Senator Santiago, “saw the clarity of the presentation of these three oppositors and, to be fair, she asked the government panel to answer them.”

For instance, Roxas listed the constitutional infirmities warned against by the legal resource persons. “For example, it removed the prerogative of the government to craft national development policy that will spell out requirements for hiring of Filipinos, for technology transfer and for export minimal content. Per the Jpepa, the government can no longer impose these, and as a result, it will lose its right to shape a nationalistic development policy.

Second, he added, the legal experts warned that the tariff-setting powers provided in the Constitution as purely a legislative function will be violated.

“There’s an interpretation that under this treaty, there will be no setting of tariffs as a tool for national development, since this will be fixed at zero percent tariff.”

Third, Roxas noted that from a legal point of view, “the treaty lists reservations by governments that should not be touched. The list of the Japanese is very long; the Philippine list is very short, virtually none. This is with respect to reservations on existing law or laws to be formed in the future in order for the Philippine government to precisely shape national development. If we don’t list our reservations, the Japanese may eventually enter all sectors.”

Like Santiago, Senator Roxas did not rule out the possibility that the senators may simply “recommend that it be renegotiated.”

“As for myself, on the trade and goods issue, the sum total is still vague. What advantage do we get in contrast to what we will give up?

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