SC upholds Philippines-Japan economic pact

MANILA, Philippines —  The Supreme Court has upheld the constitutionality of the Japan-Philippines Economic Partnership Agreement (JPEPA), a bilateral trade and investment deal entered into by the two countries during the Arroyo administration and ratified by the Senate in 2008.

In a 95-page decision dated June 13, 2023 but made public only last Jan. 24, the SC dismissed for lack of merit two petitions that challenged the legality of the agreement.

Petitioners claimed the agreement violated provisions of the Charter that guarantee people’s right to health and to a balanced healthful ecology as well as compel government to protect and reserve the use of the nation’s marine wealth and its archipelagic waters and exclusive economic zone exclusively for Filipino citizens.

They also claimed the agreement violated constitutional provisions that reserve certain sectors of economic activities to Filipinos. The agreement, they added, also violated constitutional provisions that mandate the government to pursue trade policies that serve the general welfare and to engage in arrangements based on equality and reciprocity.

The first petition was filed by Initiatives for Dialogue and Empowerment Through Alternative Legal Services Inc., Alliance of Progressive Labor, Ecological Waste Coalition of the Philippines, Mother Earth Foundation, Concerned Citizens Against Pollution, Fisheries Reform, Kilusan Para sa Pagpapaunlad ng Industriya ng Pangisdaan, and Philippine Workers Alliance.

The second petition was filed by the Fair Trade Alliance, Automotive Industry Workers Alliance and several lawmakers and former senators.

The petitions, consolidated by the SC, named as respondents senators of the 14th Congress which approved the agreement as well as several Arroyo administration cabinet members.

JPEPA, according to petitioners, liberalizes trade in goods in a one-sided way as the Philippines opens its market to Japanese goods by reducing 98 percent of tariff lines while Japan is bound to eliminate tariff duties only on 90 percent of tariff lines.

Grossly unfair

The petitioners also described JPEPA as “grossly unfair and disadvantageous” to the Philippines because Japan, as a developed country with less economic vulnerabilities than the Philippines, would have a wider exclusion list.

In a decision penned by Senior Associate Justice Marvic Leonen, the SC ruled the petitioners’ contentions “have no merit.”

On the allegation that JPEPA violates Article XII, Section 2 of the Constitution for failure to reserve the limitations on the use and exploitation of land and resources, as well as use and enjoyment of marine resources in Philippine waters, the SC said it agrees with respondents that the limitation imposed by the provision has been protected in the Philippine list of reservation.

“The same applies to petitioner’s claim that the JPEPA transgresses Article XII, Section 7 of the Constitution on private land ownership,” the decision read.

On petitioners’ claim that reservation on matters of private land ownership is inadequate as it only covers the manufacturing sector, and that foreign corporations engaged in businesses other than manufacturing may be allowed to own private lands, the SC said that JPEPA provides for the reservation on matters relating to private land ownership.

“Granted that the reservation’s sector element only states ‘manufacturing,’ the reservation should be read as a whole, with the measure element prevailing over the other elements. Akin to Reservation No. 17, Reservation No. 3 has for its measure element Article XII of the Constitution, which embodies the mandate of ensuring the protection and conservation of our national economy and patrimony,” it explained.

The SC further said there is no merit in petitioners’ claim that JPEPA violates Article XII, Sections 2 and 7 of the Constitution.

Meanwhile, on the contention that the constitutional limitation concerning the operation of public utilities was not included in the schedule of reservations, thus enabling Japanese investors to own more than 40 percent of a public utility, the SC said that no liberalization commitment was made based on its review of the Trade in Services Chapter of the agreement.

‘Subject to exceptions’

On the supposed violation of Article XII, Section 14 of the Charter, which reserves to Filipino citizens the practice of all professions in the country, the SC ruled that while the Constitution made such restriction “the rule is subject to exceptions introduced by law.”

“A perusal of the specific commitments made by the Philippines on the practice of these professions shows that adequate reservations have been made both for market access and national treatment,” the Court said.

On the contention that JPEPA violates Article II, Sections 15 and 16 of the Constitution, which provide for the people’s rights to health and to a balanced and healthful ecology, the SC said the agreement “does not facilitate the indiscriminate importation of hazardous and toxic wastes into the Philippines.”