DOJ Opinion No. 071, s. 1992

DOJ OPINION NO. 071 , s. 1992 June 3, 1992 Acting Secretary Lilia R. Bautista Department of Trade and Industry 361 Sen. Gen. J. Puyat Ave. Makati, Metro Manila M a d a m : This has reference to your request for opinion on whether or not there is "need for the Philippine Congress to ratify the Agreement on the Common Effective Preferential Tariff (CEPT) scheme for the ASEAN Free Trade Area (AFTA) which was signed during the Meeting of the ASEAN Heads of Government in Singapore on 27-28 January 1992." cdlex You state that on May 13, 1977, former President Marcos ratified the Agreement on the ASEAN Preferential Trading Agreements (PTA); that said agreement provides for the adoption of various instruments on trade liberalization on a preferential basis; that one of these instruments is the CEPT Scheme which is designed to improve the ASEAN PTA; that previous improvements on the ASEAN PTA were achieved with the adoption during the Third ASEAN Summit in Manila in December, 1987 of the Protocol on Improvements of Extension of Tariff Preferences under the ASEAN and the Memorandum of Understanding on Standstill and Rollback of Non-tariff Barriers; that the latter two agreements were not subjected to congressional ratification following an opinion rendered by this Department; and that under the Tariff and Customs Code, the Philippine Government's obligations to reduce its tariff rates can be done administratively. It is your view that the subject agreement need not be ratified by Congress. We agree. The authority of the President to enter into valid and binding international agreements without need of legislative concurrence has long been recognized and upheld by the Supreme Court. In a leading case, the Court said: ". . . the right of the Executive to enter into binding agreements without the necessity of subsequent Congressional approval has been confirmed by long usage. From the earliest days of our history we have entered into executive agreements covering such subjects as commercial and consular relations, most-favored-nation rights, patent rights, trademark and copy-right protection, postal and navigation arrangements and settlement of claims. The validity of these has never been seriously questioned by our courts. xxx xxx xxx "Agreements concluded by the President which fall short of treaties are commonly referred to as executive agreements and are no less common in our scheme of government than are the more formal instruments treaties and conventions. They sometimes take the form of exchanges of notes and at other times that of more formal documents dominated' agreements' or 'protocol'". . . . They cover such subjects as . . . customs matters, and commercial relations generally, . . ." (Commissioner of Customs v. Eastern Sea Trading, 3 SCRA 351, quoting 39 Columbia Law Review, pp. 753-754). An examination of the provisions of the Agreement on the CEPT Scheme reveals that said document merely implements in concrete details the concepts and policies formulated in the Agreement on the ASEAN PTA earlier ratified. It is merely an instrument embodying the guidelines on how trade liberalization on a preferential basis can best be achieved, which is the very goal of the PTA. Such being the case, and in the light of the cited ruling, the subject agreement should likewise be valid and binding upon the Philippine Government even without Senate concurrence. prcd Moreover, as you have correctly alluded to, Section 402 of the Tariff and Customs Code provides additional argument on why Senate concurrence on the subject agreement may be dispensed with. Said section of law provides insofar as relevant: "a.For the purpose of expanding foreign markets for Philippine products as a means of assistance in the economic development of the country, in overcoming domestic unemployment, in increasing the purchasing power of the Philippine peso, and in establishing and maintaining better relations between the Philippines, and other countries, the President, is authorized from time to time: (1) To enter into trade agreements with foreign governments or instrumentalities thereof; and (2) To modify import duties (including any necessary change in classification) and other import restrictions as are required or appropriate to carry out and promote foreign trade with other countries: Provided, however, That in modifying import duties or fixing import quota the requirements prescribed in subsection 'a' of Section 401 shall be observed: Provided further, That any modification of import duties and any fixing of import quotas made pursuant to the Agreement on ASEAN Preferential Trading Arrangements ratified on August 1, 1977 shall not be subject to the limitations of aforesaid section 'a' of Section 401." Finally, this Department has previously cited with approval the view that Section 21, Article VII of the present Constitution which requires ratification by the Senate of "treaties or international agreements" does not envisage executive agreements which may be validly entered into by the President without necessity of legislative concurrence (Sec. of Justice Op. No. 71, s. 1987). Likewise, we have also ruled that whether or not there is need for an international agreement to be ratified after its signature in order to bind the party-signatories thereto would depend upon their intention (Sec. of Justice Opn. No. 71, s. 1988 citing Brownlie, Public International Law and O'Connell, International Law). In the case of the agreement in question, a perusal of its provisions discloses that it becomes "effective upon signing thereof." (See par. 3, Art. 10). It is clear, therefore, that the contracting parties did not intend the agreement in question be subjected to legislative ratification for its consequent binding effect. prcd Please be guided accordingly. Very truly yours, (SGD.) EDUARDO G. MONTENEGRO Acting Secretary