THE PHILIPPINES AND THE WTO: SURVEY OF

CURRENT PRACTICES WITH EMPHASIS ON

ANTI-DUMPING, COUNTERVAILING DUTIES
AND SAFEGUARD MEASURES

H. Harry L. Roque∗

ABSTRACT
This paper will present a survey of current Philippine practices
in the WTO and will evaluate the country’s level of compliance
with its treaty obligations under the WTO. It will also examine
some specific WTO issues affecting the country with the endview of
providing a theoretical framework of how to approach, if not
resolve, these issues.

KEYWORDS: anti-dumping; countervailing duties; safeguard measures;

Philippines

∗
Of the Philippine Bar, BA (Mich), LL.B. (UP), LL.M (LSE), Director, Institute of International
Legal Studies and Assistant Professor of Law, University of the Philippines Law Center; Partner,
Roque and Butuyan Law Offices, Makati, Metro-Manila, Philippines.
230 AJWH [VOL. 1:229

I. CONSTITUTIONAL FRAMEWORK

The Philippines is unique among World Trade Organization (WTO)

Members in that it is probably the only jurisdiction worldwide where the
local Supreme Court has had occasion to pronounce on the constitutionality
of the country’s entry into the WTO. In the case of Tanada v. Angara,1 the
primary issues adjudicated upon by the Supreme Court were one, whether
or not the Chief Executive’s decision to ratify the WTO, as well as the
Senate’s concurrence with the Executive decision to ratify, violated the
Filipino first policy enshrined in the Philippine Constitution and thus,
was tantamount to a grave abuse of discretion; and two, whether specific
provisions of the WTO resulted in a derogation of powers exclusively
granted to both the Supreme Court of the Philippines and the Congress of
the Philippines.
Here, the contention of the Petitioners, nationalists all, was that the
WTO provisions, such as the most-favored-nation (MFN) clause, the
national treatment principle and the Agreement on Trade-Related
Investment Measures (TRIMS Agreement) provisions violated Articles II
and XII of the 1987 Constitution.
Article II of the 1987 Constitution reads:

Sec. 19. The State shall develop a self reliant and independent
national economy effectively controlled by Filipinos.

Article XII in turn reads:

Sec. 10. The Congress shall enact measures that will encourage
the formation and operation of enterprises whose capital is
owned by Filipinos. In the grant of rights, privileges and
concessions covering the national economy and patrimony, the
State shall give preference to qualified Filipinos.

....

Sec. 12. The State shall promote the preferential use of Filipino
labor, domestic materials, and locally produced goods, and
adopt measures that make them competitive.

In ruling that the WTO was not in violation of these provisions, the
Court explained that in the first place, both Articles II and XII of the
Constitution are mere declarations of State Policy and are not

1
Tanada v. Angara, 272 SCRA 18 (May 2, 1997). (Phil.)
2006] PHILIPPINE PRACTICE ON IMPORT REMEDIES 231

self-executing provisions, the disregard of which cannot give rise to a cause

of action in court. Accordingly, such provisions are not enforcing
constitutional rights, but mere guidelines for legislation.2
Having said this, the Court nonetheless added that by reading the
Constitution in its entirety, there is a bias in favor of Filipino goods,
services, labor, and enterprises, but only in the grant of rights, privileges,
and concessions covering national economy and patrimony. It does not,
said the Court, provide for an isolationist policy.3 The Court went on to
add that in fact, the Constitution “recognizes the need for business
exchange with the rest of the world on the basis of equality and reciprocity
and frowns only on foreign competition that is unfair.”4 It further ruled that
contrary to the claims of the Petitioners, the WTO will not wipe out local
industries and enterprises, as in fact the WTO has built in protection against
unfair trade practices, such as provision on anti-dumping, countervailing
and safeguard measures against import surges, which developing countries
such as the Philippines may avail of.5
It added that contrary to the arguments of the Petitioners, the MFN
clause, the national treatment principle, and the trade without
discrimination principle cannot be struck down as unconstitutional as they
are rules of equality and reciprocity that apply to all WTO Members. The
Court stated:

Aside from envisioning a trade policy based on ‘equality and

reciprocity,’ the fundamental law encourages industries that are
competitive in both domestic and foreign markets, thereby
demonstrating a clear policy against sheltered domestic trade
environment, but one in favor of the gradual development of
robust industries that can compete with the best in foreign
markets.6

On the issue of derogation of sovereignty, the Court stated that

sovereignty, albeit absolute, may be subject to restrictions and limitations
voluntarily agreed upon by the country. In the words of the Court:
“Unquestionably, the Constitution did not envision a hermit type isolation
from the rest of the world.”7
It then justified that the binding nature of the WTO on the basis of the
principle of pacta sunt servanda, which, as a recognized principle of

2
Id. at 54.
3
Id. at 59.
4
Id.
5
Id. at 61.
6
Id. at 63.
7
Tanada, 272 SCRA, at 66.
232 AJWH [VOL. 1:229

international law, forms part of the laws of the land. According to the Court,
the binding nature of the WTO is “automatic” and “creates the legal
obligation to make in its legislations such modifications as may be
necessary to ensure the fulfillment of the obligations undertaken.”8
In the end, while the Court stated that the Executive’s decision to enter
into the WTO is a matter of treaty obligation which does not contravene
any provision of the Constitution, it nonetheless clarified that it was not for
the Court to rule upon the wisdom of this executive decision, as such was a
matter for which only the sovereign people may decide upon.9 Ironically,
despite the Court’s avowed refusal to pass judgment on the wisdom of
ratifying the WTO, it nonetheless did when it ended its decision as follows:

Notwithstanding objections against possible limitations on

national sovereignty, the WTO remains as the only viable
structure for multilateral trading and the veritable forum for the
development of international trade law. The alternative to the
WTO is isolation, stagnation, if not economic destruction. Duly
enriched with original membership, keenly aware of the
advantages and disadvantages of globalization with its on-line
experience, and endowed with a vision of the future, the
Philippines now straddles the crossroads of an international
strategy for economic prosperity and stability in the new
millennium.10

The decision of the Court was unanimous and quite propitiously,

written by a member of the Court who is more renowned as a businessman
and a prophet of free enterprise, rather than as a member of the legal
professional. Perhaps, the decision may be criticized on the basis that the
Court only considered arguments in support of the WTO without
necessarily examining the antithetical arguments so well articulated in the
streets of Seattle in 1999. Why, for example, did the Court invite no less
than the Philippine Ambassador to Geneva as amicus curiae, a person who
could not be expected to articulate the criticisms against the WTO by the
very nature of her post, without inviting another person from the opposite
perspective to stand as amicus curiae? It is indeed ironical that while
anti-WTO personalities such as our very own Dr. Walden Bello of the
University of Philippines could be invited by no less than the President of
the Czech Republic to participate in a debate on the WTO, Dr. Bello’s own
national Supreme Court was not interested in what he had to say on the
subject. Further criticisms may be made on reliance placed by the Court on

8
Id.
9
Id. at 79.
10
Id. at 81–82.
2006] PHILIPPINE PRACTICE ON IMPORT REMEDIES 233

such works appearing in the Readers Digest,11 rather than on more serious,
intellectual and retrospective works either for or against the WTO.12
These criticisms notwithstanding, the fact remains that as a matter of
treaty obligation, the Philippine Supreme Court has, in the case of Tanada,
removed any doubts as the country’s unequivocal commitment to the WTO:
it is not only constitutional, but is also a treaty obligation which must be
complied with. Its provisions furthermore, are enforceable in the entire
territory of the country as forming part of the law of the land.
It is now in this context this article will now proceed to analyze how the
Philippines has been faring in carrying out its treaty obligations under the
WTO.

II. CASE STUDY ON COMPLIANCE: ANTI-DUMPING,

COUNTERVAILING, AND SAFEGUARD MEASURES

The choice of anti-dumping, countervailing and safeguard measures for

this case study has a specific purpose. In addition to the fact that these
measures constitute the newest field of practice in the legal profession, and
that more than half of all disputes pending before the WTO in Geneva
involve challenges on the validity of these imposed measures, 13 these
measures are more importantly, intended to promote fairness in the regime
of free trade amongst nations. Because the WTO compels Member nations
to reduce tariffs as well as eliminate non-tariff barriers, save for reasons of
Balance of Payments problems and other very specific exceptions,14 the
subject of litigation in the international trade arena has quite obviously
shifted from the imposition of tariffs and non-tariff barriers to ensuring a
level playing field amongst trading nations. This was what our own
Supreme Court had in mind in debunking the claim that free trade will wipe
out our domestic industries. According to the Court, anti-dumping,
countervailing, and safeguard measures may be utilized by developing
countries to counteract unfair trade practices.15

11
Id. at 81.
12
See David Morris, Free Trade – the Great Destroyer, in THE CASE AGAINST THE GLOBAL
ECONOMY 218, 218-228 (Jerry Mander & Edward Goldsmith eds., 1996). See also Herman Daly,
From Adjustments to Sustainable Development - the Obstacle of Free Trade, in THE CASE AGAINST
“FREE TRADE “: GATT, NAFTA, AND THE GLOBALIZATION OF CORPORATE POWER 121, 124-130
(William Greider & Ralph Nader eds., 1993); Edmund G. Brown, Free Trade is Not Free, in THE
CASE AGAINST “FREE TRADE “: GATT, NAFTA, AND THE GLOBALIZATION OF CORPORATE POWER
65, 65-68 (William Greider & Ralph Nader eds., 1993); ROBERT GILPIN, THE POLITICAL ECONOMY
OF INTERNATIONAL RELATIONS 180-183 (1987).
13
See WTO Home Page, http://www.wto.org.
14
General Agreement on Tariffs and Trade 1994, arts. I, X–XI, Apr. 15, 1994, Marrakesh
Agreement Establishing the World Trade Organization, Annex 1A, http://www.wto.org/english/do
cs_e/legal_e/legal_e.htm [hereinafter GATT 1994].
15
Tanada, 272 SCRA at 61.
234 AJWH [VOL. 1:229

What are anti-dumping, countervailing, and safeguard measures?

Simply put, these are duties which may be imposed as tools of fair trade to
correct instances of dumping, unfair advantage because of subsidies, and
surges in imports of commodities.
Article VI of the GATT 1994 provides that dumping occurs when the
“export price of a commodity is less than its normal value in the exporting
state.”16 Under the Agreement on Subsidies and Countervailing Measures
(ASCM), “a subsidy is a financial contribution by a government body or
any public body where there is either a direct fund transfer, a revenue
which otherwise due is foregone or not collected, or when a government
provides goods or services.”17 There a subsidy also exists when a state
maintains any form of income or price support and a benefit is conferred.
Safeguard measures, on the other hand, are resorted to when there is a
dramatic increase in the imports of a particular commodity.18
The WTO does not prohibit the imposition of these duties, merely
regulating the conditions under which they may be imposed. It seeks to
achieve this by requiring Member nations to amend their domestic laws and
regulations to conform to the provisions of the Marrakesh Agreement.19
Substantially, the Agreements seek to achieve consistency in the laws of
Member nations by one, requiring Member nations to observe due process
before these measures are imposed;20 two, requiring Member nations to
have a local body to conduct the required procedure before resorting to the
imposition of these measures;21 three, prescribing the kind of evidence that
it may consider in deciding whether or not it may be imposed;22 and fourth,
the amount of duties that may be imposed. 23 On the merits, the
Antidumping Agreement and ASCM require Member nations to impose the
measures only upon a finding that one, there is either an instance of
dumping, or a subsidy; two, that there was an injury to the domestic
industry; and three, that there is a causal relationship between either the
dumping, or the subsidy. All these three elements must be duly proved at
every stage of the investigation: from its initiation, to the preliminary stage,

16
GATT 1994 art. IV.
17
ASCM art. 1.
18
Agreement on Safeguards, art. 2, Apr. 15, 1994, Marrakesh Agreement, infra note 19
[hereinafter SA].
19
Marrakesh Agreement Establishing the World Trade Organization, Apr. 15, 1994, Final Act
Embodying the Results of the Uruguay Round of Multilateral Trade Negotiations, http://www.wt
o.org/english/docs_e/legal_e/legal_e.htm [hereinafter Marrakesh Agreement].
20
Agreement on Implementation of Article VI of the General Agreement on Tariffs and Trade 1994,
art. 5 , Apr. 15, 1994, Marrakesh Agreement, supra note 19 [hereinafter Antidumping Agreement];
ASCM art. 11; SA art. 3.
21
Antidumping Agreement art. 5; ASCM art. 11; SA art. 3.
22
Antidumping Agreement arts. 5-6; ASCM arts. 11-12; SA arts. 3-4.2(a)
23
Antidumping Agreement arts. 5, 7; ASCM arts. 11,19; SA arts. 3, 5.
2006] PHILIPPINE PRACTICE ON IMPORT REMEDIES 235

and to formal investigation stage.24

Nuisance cases are minimized under the Marrakesh Agreement since
these measures may only be initiated at the instance of a “domestic
industry” whose standing is defined as comprising producers who
collectively account for more than 50% of the total production of the
product alleged to be dumped.25 No action for the imposition of these
measures may be initiated unless it is shown that it is being initiated by at
least 25% of all domestic producers of the commodity involved.26 Under
the de minimis or the negligible rule, the investigation must be terminated
if the dumping, subsidy, or surge in imports is minimal.27 It also enjoins
Member nations to entertain price undertakings, or voluntary undertakings
to raise the export prices of commodities.28 Under the so-called sunset
clause, these measures may not be imposed indefinitely as Member states
are required to review the propriety of these measures every five years.29
Cognizant that these measures may be utilized in furtherance of
protectionist goals, the Agreements limit the period within which the duties
may be imposed, as well as the amount of duties that may be imposed, be it
as a provisional measure or as a final finding. As a provisional duty, neither
an anti-dumping duty nor a countervailing duty may be imposed any sooner
than sixty days from date of initiation of investigation, and its duration may
not exceed four months.30 Here, the amount of the duty should be equal to
the margin of dumping, in the case of an anti-dumping duty,31 and should
not be in excess of the amount of the subsidy found to exist in the case of
countervailing duty.32 In the case of safeguard measures, it must be only to
the extent necessary to prevent or remedy serious injury and to facilitate
adjustment. To ensure that these investigations do not take too long,
specific periods are provided in the Agreements with the end view of
terminating formal investigations within periods specified in the
Agreements.
By way of compliance, the Philippines enacted Republic Act 878233 to
implement the Antidumping Agreement, Republic Act 8751 34 to
24
Antidumping Agreement art. 5.2; ASCM art.11.2.
25
Antidumping Agreement art. 4; ASCM art. 11.4.
26
Antidumping Agreement art. 5.4; ASCM art. 11.4.
27
Antidumping Agreement art. 9.4; ASM art. 11.4.
28
Antidumping Agreement art. 8; ASCM art. 18.
29
Antidumping Agreement art. 11.3; ASCM art. 21.3.
30
Antidumping Agreement art. 7.3; ASCM art.17.3.
31
Antidumping Agreement art. 9.3.
32
ASCM art. 19.4.
33
An Act Providing the Rules for the Imposition of an Anti-Dumping Duty, Amending for the
Purpose Section 301, Part 2, Title II, Book I of the Tariff and Customs Code of the Philippines, as
Amended by Republic Act No. 7843; and for other Purposes, Rep. Act 8752 (August 12, 1999), 96
O.G. 12 No. 1 (January 3, 2000). (Phil.).
34
An Act Strengthening the Mechanisms for the Imposition of Countervailing Duties on Imported
Subsidized Products, Commodities or Articles of Commerce in Order to Protect Domestic
236 AJWH [VOL. 1:229

implement the ASCM, and Republic Act 8800 to implement the AS.35
By way of content, these laws comply substantially with the provisions
of the WTO as in fact; the proceedings during the drafting of these laws do
provide that this was the legislative intent. Note though that there has only
been substantial compliance. Having served as a technical consultant in the
drafting of both the anti-dumping and the countervailing laws, it may be
said that full compliance was impossible given the intense lobby exerted by
protectionist forces in the Congress. In other words, compromises had to be
made if the existing laws were to be amended at all. Given the provisions
of our pre-WTO laws on anti-dumping and countervailing duties, even the
most avid free trade exponent would have to concede that since these
contained provisions grossly inconsistent with the WTO, some compliance
was preferable compared to no compliance at all. It was inevitable thus that
trade-offs had to be made.
Consider the state of the former laws:
1. Dumping and countervailing measures were proper even for
alleged dumpings which might injure or likely to injure the
domestic industry. The WTO requires an actual material
injury and not a mere likelihood;
2. Domestic industry was merely the “major proportion of total
domestic production”;
3. Provisional duties could be issued earlier than 60 days from
date of initiation of the investigation;
4. Dumping duties were twice the dutiable value;
5. The test for like products was merely that it be substantially
the same, a substitute, or serves the same or similar purpose.
Under the WTO, test of like product is only identical in all
respects or characteristics resembling product under
consideration.36
The lobby of protectionist groups was so effective that at one point it
was suggested that then Ambassador Lilia Bautista be asked to write a
memorandum on the repercussions of the provisions that the protectionist

Industries from Unfair Trade Competition, Amending for the Purpose Section 302, Part 2, Title II,
Book I Of Presidential Decree No. 1464, otherwise Known as the Tariff and Customs Code of the
Philippines, as Amended, Rep. Act 8751 (Aug. 7, 1999), Customs Code of the Philippines,
Philippine Tariff Commission. (Phil.)
35
An Act Protecting Local Industries by Providing Safeguard Measures to be Undertaken in
Response to Increased Imports and Providing Penalties for Violation thereof, Rep. Act 8800 (July
19, 2000), 97 O.G. 263 No. 1 (January 1, 2001). (Phil.)
36
Amending Section 301 of Presidential Decree No. 1464 Otherwise Known as the Tariff and
Customs Code of 1978 as amended, Pres. Dec. No. 1999 (Nov. 9, 1985). (Phil.); Rep. Act 8751; An
Act Rationalizing and Strengthening the Provisions on Anti-Dumping, Amending for the Purpose
Section 301, part 2, Title II, Book I of the Tariff and Customs Code of the Philippines, as amended,
Rep. Act 7843 (Dec. 21, 1994). (Phil.)
2006] PHILIPPINE PRACTICE ON IMPORT REMEDIES 237

lobby wanted to enact.37 In addition to the provisions of the old law, this
lobby wanted quite frankly to use these measures not as instruments of fair
trade, but as non-tariff barriers. They could have accomplished this with
proposals such as to authorize the customs commissioner to withhold the
goods at customs, 38 imposing dumping duties which were beyond the
margin of dumping,39 and a process which would not have given the
protestees enough time to defend themselves with such requirements as a
mere ten day period to answer the written questionnaires.40 They also
sought to include a provision that for purposes of satisfying due process,
notice to the importer alone was enough.41 One lobby group even sought to
classify dumping and the grant of subsidies as criminal in nature with
penalties corresponding to those imposed for economic sabotage.42
In the end, Ambassador Bautista complied and, in her letter to then
Secretary Pardo, warned:

I would say that most anti-dumping and countervail disputes in

the WTO today have arisen from the incorrect implementation
of consistent legislation. Should any member successfully
challenge us under WTO dispute policy for an allegedly faulty
investigation and/or inconsistent legislation. At the end XXX
we would be compelled to amend the inconsistent provision of
law XXX I dread to think that by then, sectors and industries
which have benefited from and savored the potency of
anti-dumping and countervail actions would even more
aggressively advocate for the retention of the WTO inconsistent
law.43

The House of Representatives fortunately heeded Ambassador

Bautista’s warning. Nonetheless, protectionist interests did not lose heart as
they had the upper hand in the Senate since most, if not all, of the
objectionable matters as contained in Ambassador Bautista’s letter, were
incorporated in the Senate version of the Bill. This made it even more
imperative for the proponents of the pro-WTO version of the Bills to
compromise with the protectionist lobby. Consequently, the House versions

37
See Letter of Ambassador Lilia R. Bautista to Secretary Jose T. Pardo (Feb. 24, 1999)
[hereinafter Letter].
38
H.B. 22, Cong. sec. D (An Act Providing the Rules for the Imposition of an Anti-Dumping Duty,
Amending for the Purpose Section 301, Part II, Book 1 of the Tariff and Customs Code of the
Philippines, Amending Republic Act No. 7843, and for other purposes). (Phil.)
39
See S.B. 765, 10th Cong. (authored by Senator Juan Ponce Enrile). (Phil.)
40
Id.
41
Id.
42
Position Paper of the Federation of Philippine Industries on House Bills 22 and 553 (Dec. 2,
1998).
43
S.B. 765.
238 AJWH [VOL. 1:229

for both the anti-dumping and countervailing laws were adopted for
purposes of the Bicameral Conference Committee. Several crucial
provisions, by way of compromise, were however inserted. The most
important of which was a provision which shifted the burden of proof and
evidence to the protestee after the Department of Trade and Industry (DTI)
had concluded that there is a prima facie case for anti-dumping or
countervailing measure. 44 Litigators will, of course, know why this is
objectionable. In any proceedings, he who prays for relief must prove his
allegations in support of the relief sought for. While our existing laws
substantially comply with those of the WTO, they nonetheless provide that
it is the protestee that has the burden to disprove that there exists dumping
or a subsidy that materially injures the domestic industry. Other provisions
in our law still inconsistent with the WTO include:

1. The Secretary of either Trade and Industry or Agriculture

may motu propio initiate a preliminary investigation for
dumping and countervailing;45

2. A provision providing for a penalty equivalent to double the

dutiable amount was added, in addition to the anti-dumping
duty.46

By way of a trade-off and to dampen the effects listed above, the

Pro-WTO lobby successfully inserted a provision that required the filing of
a surety bond by the Petitioner to discourage malicious or frivolous
petitions.47
The good news is that despite these compromises, the records of the
Tariff Commission nonetheless show that rather than relying on the legal
presumption on the existence of dumping and material injury, the
Commission seems to have disregarded this presumption and has not only
required the Protestant to prove all the elements required by the WTO; but
more importantly, it has conducted investigations of its own, apart from
evidence submitted by the parties, to satisfy itself that the required elements
concur in the investigations it has thus far conducted.
Since the WTO took effect in 1995, the Tariff Commission had the
opportunity to rule on at least six investigations; to wit: anti-dumping
investigations against Cold Rolled Coils/Sheets (CRC’s) from Taiwan48

44
Rep. Act 8752, sec. 3 (e).
45
Id. sec. 3 (b).
46
Id. sec. 4.
47
Id. sec. 3 (b).
48
Report of Findings on the Anti-Dumping Protest against the Importation of Cold Rolled
Coils/Sheets from Taiwan under Section 301 of the Tariff and Customs Code, as Amended,
Anti-Dumping Invest. No. 00-02 (Tariff C. Apr. 24, 2001) [hereinafter Taiwan CRC] (Phil.).
2006] PHILIPPINE PRACTICE ON IMPORT REMEDIES 239

and Malaysia,49 Steel Billets from Russia,50 figured glass from China,51
and polypropylene resins from Korea.52 Of these cases, it found positive
evidence of dumping against the CRC’s from Malaysia,53 steel billets from
Russia 54 and resins from Korea. 55 In all three cases, though, the
collections of the anti-dumping duties were suspended. In the case of
CRC’s from Malaysia and steel billets from Russia, the collections were
suspended until such time that the Protestant, the moribund National Steel
Corporation, resumes its operations. 56 It is noteworthy that an
anti-dumping duty was levied on CRC’s from Malaysia only by reason of
default since both the Malaysian exporter and the Malaysian Embassy
refused to participate in the investigation.57 In the case of resins from
Korea, the collection of the duty was suspended, in response to
consultations against the duty requested by Korea in Geneva pursuant to
the WTO dispute resolution mechanism. In the other cases, the Tariff
Commission refused to impose the duty even if Protestants in all instances
were able to prove dumping and even material injury. Such refusal was
because the Protestants failed to prove the required causal connection
between dumping and the material injury. In the case filed by the National
Steel Corporation for the imposition of anti-dumping duties against CRC’s
from Taiwan, the Commission rightfully ruled that the injury to it, as the
domestic industry, was due to the other reasons other than the dumping.
There, the Commission reasoned that the injury, in fact the demise of the
Company, was due not to imports, but to the Asian crisis of 1997 and
further attributable to debt servicing, and inefficient and uncompetitive
technology of the National Steel Corporation.58
Safeguard measures are thus controversial for a reason. By its very
nature, the imposition of a safeguard measure has a lower evidentiary
threshold because in the first place, one need not prove dumping or an
49
Report of Findings on the Anti-Dumping Protest against the Importation of Cold-Rolled Steel
Coils (CRC) and Sheets from Malaysia under Section 301 of the Tariff and Customs Code, as
Amended, Anti-Dumping Invest. No. 99-05 (Tariff C. Dec. 27, 2000) [hereinafter Malaysia CRC]
(Phil.).
50
Report of Findings on the Anti-Dumping Protest against the Importation of Steel Billets from
Russia under Section 301 of the Tariff and Customs Code, as Amended, Anti-Dumping Invest. No.
99-01 (Tariff C. Aug. 28, 2000) [hereinafter Russia Steel Billets] (Phil.)
51
Report of Findings on the Anti-Dumping Protest against the Importation of Cleared Figured
Glass from the People’s Republic of China under Section 301 of the Tariff and Customs Code, as
Amended (Tariff C. June. 29, 2001). (Phil.)
52
Report of Findings on the Anti-Dumping Protest against the Importation of Polypropylene
Resins from Korea under Section 301 of the Tariff and Customs Code, as amended by R.A. 8752,
Anti-Dumping Invest. No. 99-04 (Tariff C. Aug. 30, 2000). (Phil.)
53
Malaysia CRC, supra note 49.
54
Russia Steel Billets, supra note 50.
55
Malaysia CRC, supra note 49.
56
Russia Steel Billets, supra note 50; Malaysia CRC, supra note 49; SA art. 2; H.B. 22.
57
Malaysia CRC, supra note 49; GATT 1994 art. IV.
58
Rep. Act 8752, sec. 3(e); Taiwan CRC, supra note 48.
240 AJWH [VOL. 1:229

unfair subsidy. All that is required by the WTO is to prove a surge of

imports either due to unforeseen circumstances or due to the
implementation of the provisions of the WTO such as tariff reduction, and a
serious injury or a threat thereof to the domestic industry.59 Here, it must
be stressed that intentionally, the threshold for safeguards is made lower
than dumping duties and countervailing duties – only a serious injury or a
threat thereof, not material injury, may resort to safeguards temporarily, and
only to accord them the opportunity to compete against these sudden surges
of imports. 60 Here, the temptation to resort to safeguard measures is
tempered at least by two factors: first, that safeguard measures are applied
on commodities regardless of origin; 61 and second, by the stringent
reportorial requirements provided under the Agreement which, unlike in the
cases of dumping and subsidies, require Member nations to report, even the
initiation of a safeguard investigation.62
Safeguard measures, by way of a case study on the Philippines’
compliance with the WTO, are illustrative not because our enabling law
deviates in material terms from the provisions of the SA – in fact, it differs
only on the maximum period that a safeguard measure may be imposed, a
maximum of ten years under our law,63 and eight years under the SA64 –
but in terms of the Philippine State Practice, how much our competent
authorities know about the WTO.
Thus far, our Tariff Commission has decided on two safeguard
investigations: one on Portland cement,65 and the other one on cement
tiles. 66 In the Portland cement investigation, the decision was not to
impose safeguard measures, while in the cement tile investigation, the
decision was to impose safeguard measures. These differing findings were
nonetheless, based on the same criteria: to wit: a finding that a surge in
imports was a result of unforeseen developments and of the effect of
obligations granted under the WTO; 67 a finding that the product in
consideration was being imported in such increased quantities as to cause
or threaten to cause a serious injury, if the domestic product is a like

59
SA art. 2.
60
Id. art. 7.1. Safeguard measures may only be imposed for a maximum period of eight years.
61
Id. art. 2.2.
62
Id. art. 22.1(a).
63
Rep. Act 8800, sec.15.
64
SA art. 2.2.
65
Formal Investigation Report, Cement Industry: Safeguard Action Against Imports (SG
Investigation No. 01-01) 13 March 2002.
66
Formal Investigation Report, Ceramic Tiles Industry: Safeguard Action Against Imports (SG
Investigation No. 01-02) 26 March 2002, http://www.tariffcommission.gov.ph/25March%20Final
%20report%20ceramic%20tiles_public.pdf.
67
Antidumping Agreement art. 4; ASCM art. 11.4.; SA art. 2.2; H.B. 22; SG Invest. No. 01-01,
supra note 65.
2006] PHILIPPINE PRACTICE ON IMPORT REMEDIES 241

product, be it in absolute or relative terms;68 the presence and extent of

serious injury or threat to the domestic industry of the like product; and the
existence of a causal relationship between increased imports and the serious
injury or threat thereof.69
Where the two cases differed drastically was in the issue of whether
there were increased imports of the relevant commodities in the first place
and consequently, in the further elements of serious injury and the causal
relationship. In the ceramic tile case, it was concluded that there was a
dramatic increase in imports in absolute terms from 1.9 M sq. m in 1996 to
8.9 M sq. m in 2001,70 and an increase relative to domestic production
from 17% of total production in 1996 to as high as 68% in 2002;71 and that
the surge commenced in 2000.72 It was also concluded that there was a
decline in the market share of the domestic industry and an erosion of its
competitive position, which taken together constitute serious impairment of
the overall market position for the domestically produced like product.73
This impairment was also shown by the fact that despite constant demand,
industry production and sales lagged behind.74 It was further pointed out
that during the period of the surge, employment decreased, industry
capacity was underutilized, and losses were incurred.75
In the case of Portland cement, while the Commission did determine
the existence of the surge in imports during the period 1996-2000,76 it
concluded that there was no serious injury or a threat thereof to the
domestic industry, and consequently, there was no need to prove a causal
relationship.77 In arriving at this conclusion, the Commission noted that the
decline in domestic consumption, and not the entry of imports, caused the
decline in domestic sales of local like products.78 Further, it noted that:
there were no significant decline in both production and total goods sold,79
and no underutilization of capacity as on the contrary, there was an increase
in utilization during the period of surge. 80 Most importantly, the
Commission noted that there was no uniformity in the financial
performance of the domestic producers during the period of the surge
68
Antidumping Agreement art. 4; ASCM art. 11.4.; SA art. 2.2; H.B. 22; SG Invest. No. 01-01,
supra note 65.
69
Antidumping Agreement art. 4; ASCM art. 11.4.; SA art. 2.2; H.B. 22; SG Invest. No. 01-01,
supra note 65.
70
Antidumping Agreement art. 7.3; ASCM art.17.3; SG Invest. No. 01-02, supra note 66.
71
SG Invest. No. 01-02, supra note 66 at 33.
72
Id.
73
Id. at 45.
74
Id. at 38.
75
Id. at 45.
76
SA art. 2.2; SG Investigation No. 01-01, supra note 65.
77
SG Invest. No. 01-01, supra note 65, at 54.
78
Id. at 48.
79
Id. at 47.
80
Id. at 48.
242 AJWH [VOL. 1:229

because only the petitioning companies incurred losses – their

non-petitioning competitors registered profits during the same period.81
For those who incurred losses, the Commission observed that it was the
result of the company’s debt burdens, foreign exchange losses and other
expenses.82
The decision not to impose safeguard measures was based on positive
evidence that one of the elements required for the imposition of the
measures was lacking. Further, all sixty-one pages of the Commission’s
findings detailed the factual and legal basis for its findings. Despite all
these, no less than the Secretary of our DTI described the decision as wrong
at the very least, although some will swear that he used the term “stupid.”83
Accordingly, the Secretary declared that “he would impose permanent
safeguard measures or extend the provisional duty on cement.”84 When he
was probably informed that such an act would be illegal under our domestic
law – as such a power is instead granted to the Tariff Commission – he
modified his position and this time, he said he was bringing the matter up
to the Cabinet Committee on Tariff Related Matters. Either way, his
proposed acts would have constituted both a violation of the law and the
SA.85
Needless to say, Secretary Roxas’s response to the Portland case was
improper and bereft of legal basis. By way of a case study, it would
probably be fair to state that on the basis of the actuations of no less than
the Secretary of Trade and Industry, much has to be done not just on the
issue of compliance, but even on the level of educating even our highest
ranking competent authorities on our treaty obligations under the WTO.
Secretary Roxas, although disagreeing with the conclusion of the Tariff
Commission that no serious injury was present, promulgated a decision
stating that it was bound by the negative finding of the Tariff Commission
and has no alternative but to abide by the Tariff Commission’s
recommendations. The application for safeguard measures against the
importation of gray Portland Cement filed by the Philippine Cement
Manufacturers Corporation (PHILCEMCOR), the requesting corporation,
was duly denied.
Ten days after its receipt of the decision, PHILCEMCOR filed a
petition for certiorari, prohibition and mandamus with the Court of Appeals.
After receiving the comment of Southern Cross, the importing corporation
of gray Portland Cement, the Court of Appeals granted the writ sought.

81
Id. at 52.
82
Id.
83
http://www.inq7.net/bus/2002/apr/04bus_7-1.htm.
84
http://www.inq7.net/bus/2002/mar/25/bus_2-1.htm.
85
Rep. Act 8800 provides that the DTI Secretary may only increase or decrease final definitive
safeguard measures to take into account the public interest. The Secretary cannot reverse a negative
finding of the Tariff Commission.
2006] PHILIPPINE PRACTICE ON IMPORT REMEDIES 243

Although refusing to annul the factual findings of the Tariff Commission,

the Court of Appeals held that the DTI Secretary is not bound by the factual
findings of the Commission since such findings are merely
recommendatory and fall within the ambit of the Secretary’s discretionary
review.
Southern Cross filed a petition before the Supreme Court,86 alleging
that the decision departed from the accepted and usual course of judicial
proceedings. It argued that the Court of Appeals has no jurisdiction as the
proper remedy being a petition for review with the Court of Tax Appeals
(CTA) conforms to the Safeguard Measures Act. Although the timely filing
prevented the Court of Appeals’ decision from becoming final, the DTI
Secretary issued a new decision that there was no longer any legal
impediment to his decision on PHILCEMCOR’s application for definitive
safeguard measures – he concluded that there was serious injury as a result
of the import surges and thus, a definitive safeguard measure on the
importation of gray Portland Cement in the amount of P20.60/4- kg. bag
for three years on imported gray Portland Cement was imposed.
Southern Cross filed with the CTA a petition for Review, assailing the
DTI Secretary’s Decision. PHILCEMCOR, in return, filed before the
Supreme Court a Manifestation and Motion to Dismiss in regard to
Southern Cross petition.
During the oral arguments before the Supreme Court, counsel for
Southern Cross manifested that due to the imposition of the general
safeguard measures, Southern Cross was forced to cease operations in the
Philippines.
The Supreme Court held that indeed the CTA has the jurisdiction to
review the DTI Secretary’s decision and not the Court of Appeals. First, it
opined that statutory construction leading to split jurisdiction is abhorred.
Second, the interpretation of the provisions of the Safeguard Measures Act
favored vesting untrammeled appellate jurisdiction on the CTA. Third, the
interpretation which PHILCEMCOR proposed would only result to an
absurd interpretation not favored by the Court. Whether to impose or to
impose a safeguard measure was within the CTA’s jurisdiction.
Given that the CTA has jurisdiction and not the Court of Appeals, the
decision of the Court of Appeals is void. Since such was the basis of the
DTI Secretary’s second decision, then his decision is likewise void. The
Court also noted that the DTI Secretary was seeking to enforce a judicial
decision which was not yet final and actually pending review on appeal,
which was described by the Court as an unfortunate spectacle.

86
Southern Cross Cement Corp. v. Philippine Cement Manufacturers Corp., G.R. No. 158540, 434
SCRA 65 (July 8, 2004). (Phil.)
244 AJWH [VOL. 1:229

This case acknowledges the independence of the Tariff Commission

and its factual findings concerning whether (a) a product is being imported
into the country in increased quantities, irrespective of whether the product
is absolute or relative to the domestic production; and (b) whether the
importation in increased quantities is such that it causes serious injury or
threat to the domestic industry, constitute the final determination, which
may be either positive or negative.

III. THE PHILIPPINES AND THE WTO DISPUTE SETTLEMENT

MECHANISM

A survey of Philippine experience with the WTO would be incomplete

without a summary of WTO disputes involving the Philippines, either as a
complainant or as a respondent.
To date, out of a total disputes of 243 pending with the WTO since
1995, the Philippines was a complainant once, in the desiccated coconut
case against Brazil,87 and a respondent to two other disputes where the
complaining countries actually requested for the creation of a panel, to wit:
against the anti-dumping measure imposed by us on resins from Korea,88
and the other against the Car Development Program (CDP), Commercial
Vehicle Developments Program and the Motorcycle Development Program
plan filed against us by the US.89 In addition, we requested consultations
against the US on the latter’s import prohibition of certain shrimp and
shrimp products; 90 while the US requested consultations with the
Philippines on a measure affecting Pork and Poultry.91 Other measures
involving the Philippines that may reach the WTO dispute resolution
mechanisms include: The ban imposed on Philippine bananas by
Australia, 92 and discriminatory tariff rates imposed by the European
Community and the US on Philippine tuna exports.93

87
Constitution of Panel Established at the Request of the Republic of the Philippines, Brazil –
Measures Affecting Desiccated Coconut, WT/DS22/6 (Apr. 18, 1996) [hereinafter Philippine
Panel].
88
Request for Consultations by Korea, Philippines – Anti-Dumping Measures Regarding
Polypropylene Resins from Korea, WT/DS215/1, G/L/428, G/ADP/D29/1 (Dec. 20, 2000)
[hereinafter Korean Request].
89
Request for the Establishment of a Panel by the United States, Philippines – Measures Affecting
Trade and Investment in the Motor Vehicle Sector, WT/DS195/3 (Oct. 13, 2000).
90
Request for Consultations by the Republic of the Philippines, United States – Import
Restrictions of Certain Shrimp and Shrimp Products, WT/DS61/1, G/L/130, G/TBT/D/11,
G/VAL/9 (Nov. 4, 1996).
91
Request for Consultations by the United States, Philippines – Measures Affecting Pork and
Poultry, WT/DS74/1, G/L/158, G/AG/W/31, G/LIC/D/5, G/TRIMS/D/7 (Apr. 7, 1997).
92
Request for the Establishment of a Panel by the Philippines – Revision 1, Australia – Certain
Measures Affecting the Importation of Fresh Fruit and Vegetables, WT/DS270/5/Rev.1 (July 11,
2003).
93
Philippines, Thailand seeking WTO help in EU tuna dispute, ASIAN ECON. NEWS, Apr. 29, 2002,
2006] PHILIPPINE PRACTICE ON IMPORT REMEDIES 245

The desiccated coconut case filed by the Philippines against Brazil

constitutes thus far our biggest knock out defeat at the WTO. The case was
filed by a very confident Philippines delegation shortly after a Filipino,
Justice Feliciano, was elected to be the first ever President of the Appellate
Body of the WTO. The complaint arose from a 121.5% countervailing duty
levied on Philippine desiccated coconut,94 despite the minimal amounts of
coconut exported by the country to Brazil, which incidentally, is another
coconut producing country.
Apparently, Brazil is not only good at football, but at trade litigation as
well. The Philippines never really had a chance after Brazil pointed out a
technicality, namely that the proper venue for the Philippine action was not
the WTO but the GATT95 dispute settlement mechanism since the levy was
imposed under the GATT. In a dismal defeat in both the Panel and the
Appellate Body, the jurisprudence established by the WTO was that the
dividing line between the application of the GATT and the WTO
Agreement is determined by the date on which the application was made
for the duty investigation. Hence, proper recourse for the Philippines was
under the GATT and not the WTO.96
Probably to spare the Filipino President of the Appellate Body from
further embarrassment, the Philippines has since desisted from filing any
further complaints in Geneva, and seem to be satisfied with conducting
bilateral negotiations to resolve its trade disputes with other nations.
Adopting the same practice as some Filipino lawyers with phobias of
the litigation process, since 1995 we have preferred to settle all claims
against us, save perhaps for the car development program which has
reached the point where the US has formally requested that a panel be
constituted, while desisting from filing any further complaints in the WTO.
Thus, the Korean challenge on the anti-dumping duty imposed on resins
was effectively abandoned after we raised the white flag and undertook to
suspend collection of the duty.97 Likewise, we have since abandoned our
matter against American import restraints against shrimp and shrimp
products, opting to stay on the sidelines and allowed India, Malaysia,
Pakistan, Thailand and Japan to continue with their own challenge against
the same US trade restraint. These countries who did stand up for their
rights proceeded to score a victory against the US as this particular restraint
was struck down by the Appellate Body as violation of the chapeau
standard of Article XX (g) of the GATT 1994,98 while the Philippines was

http://www.findarticles.com/p/articles/mi_m0WDP/is_2002_April_29/ai_85096418.
94
Philippine Panel.
95
General Agreement on Tariffs and Trade, Oct. 30, 1947, 61 Stat. A-11, 55 U.N.T.S. 194,
reprinted in GATT B.I.S.D. (Vol. IV) at 1 (1969) [hereinafter GATT].
96
Id.
97
Korean Request.
98
Appellate Body Report, United States – Import Prohibition of Certain Shrimp and Shrimp
246 AJWH [VOL. 1:229

left out in the cold holding unto an empty bag.

The controversy resolved around a US regulation that required
importers of shrimp and shrimp products to certify that the shrimps were
caught under conditions which would exclude turtles. This was not really a
one-of-a-kind restriction as the Americans had a similar restriction in the
case of imported tuna fish as well.
Article XX(g) of the GATT 1994 is an exception applicable to measures
relating to the conservation of exhaustible natural resources if such
measures are made effective in conjunction with restrictions on domestic
production or consumption.
In ruling against the validity of the import restraints, the Appellate Body,
echoing its earlier ruling on the tuna controversy99 and the reformulated
gasoline100 cases, noted that while the measure was indeed one relating to
the conservation of an exhaustible resource, turtles, it was not justified for
the reason that it was not in conjunction with restrictions on domestic
production or consumption and it was imposed only on imported shrimps,
and not on those locally harvested.101
The request for the creation of a panel against our car development
program promises yet to be an embarrassing defeat for the country. To
begin with, decisions that have been rendered by the GATT and the
Appellate Body on similar facts and against similar Trade-Related
Investment Measures, to wit, against Canada102 and Indonesia,103 are so
alike that, despite the fact that rulings of the WTO have no precedential
effect, the WTO will almost certainly rule in the same manner, if only
because of the need to achieve consistency in its pronouncements.
Under Articles III and XI of the GATT 1994, Member nations to the
WTO committed to accord national treatment to imported products, as well
as to eliminate quantitative restrictions. Under the TRIMS Agreement, an
illustrative list of TRIMS inconsistent with both the national treatment
principle and the duty to eliminate tariffs was provided.104 Developed
countries were given two years from date of effectiveness of the WTO to
eliminate these TRIMS, while developing countries like the Philippines
were given five years to do so, and least developing countries seven

Products, WT/DS58/AB/R (Oct. 12, 1998).

99
Report of the Panel, United States – Restrictions on Imports of Tuna, DS/21/R (Sep. 3, 1991),
GATT B.I.S.D. (39th Supp.) at 155 (1993) [hereinafter Tuna] (unadopted).
100
Appellate Body Report, United States – Standards for Reformulated and Conventional
Gasoline, WT/DS2/AB/R (Apr. 29, 1996).
101
Tuna, DS/21/R.
102
Report of the Panel, Canada – Administration of the Foreign Investment Review Act, L/5504
(July 25, 1983), GATT B.I.S.D. (30th Supp.), at 140 (1984).
103
Panel Report, Indonesia – Certain Measures Affecting the Automobile Industry, WT/DS54/R,
WT/DS55/R, WT/DS59/R, WT/DS64/R (July 2, 1998).
104
See TRIMS Annex.
2006] PHILIPPINE PRACTICE ON IMPORT REMEDIES 247

years.105
In 1995, pursuant to the notification requirement of the Agreement, the
Philippine Representative to the WTO gave notice to the WTO Committee
on Trade Related Investment Measures of the existence of the so-called
CDP – according to the notice, the CDP fell squarely under 1(a) and 2(b) of
the illustrative list. In the notification, the Philippines described the CDP as
requiring participant thereto a local input requirement of 40%-45% (1(a) of
illustrative list) and a net foreign exchange requirement ranging from 5 to
75%. In the same notification, it was stated “the authorities envisaged that
these requirements would be terminated by the year 2000 consistent with
the TRIMS Agreement.”106
In the year 2000, however, instead of honoring the terms of the
notification filed in 1995, then President Estrada issued Memorandum
Order No. 95 extending the local content and net foreign exchange earning
requirements in the motor vehicle programs. By way of a legal basis, the
Philippines pointed to the fact that in October 4, 1999, it filed a request
with the WTO Council of Trade in Goods for the extension of the
implementation of the local content and net foreign exchange earnings
requirements until December 31, 2004, citing the Agreement’s provisions
on the possibility of a TRIMS extension. Accordingly, it was declared that
the TRIMS were extended indefinitely or until conclusion of
negotiations.107
The US request for consultation on Pork and Poultry was reported to
have been settled with the amendment of Administrative Order 8.108
The problem of course with this Order is that it did not cite the specific
provision, which allegedly provided for the possibility of a further
extension beyond the periods stipulated in the GATT 1994 and the TRIMS
Agreement. Instead, what we do find are simply instances where Articles
III and XI may be suspended, namely, by reason of balance of payments
crisis.109 Worse, the Philippines filed its claim in the wrong forum, the
Council on Trade in Goods, when pursuant to the Agreement; the relevant
body should have been a Committee on Trade Related Investment
Measures.110 Clearly, the Philippines was not guided by a mistaken belief
that it could negotiate for an extension of the mandatory periods, but rather

105
TRIMS art. 5.3.
106
Notification under Article 5.1 and 5.5 of the Agreement on Trade Related Investment
Measures – Philippines, G/TRIMS/N/1/PHL/1 (Apr. 25, 1995).
107
Memorandum Order No. “Extending the Local Content and Net Foreign Exchange Earnings
requirements in the Motor Vehicle development Programs Under Memorandum Order No. 346
Dated 26 February 1996, as Amended” (Apr. 7, 2000).
108
Philippines – Measures Affecting Pork and Poultry -- Notification of Mutually Agreed
Solutions, WT/DS74/5, WT/DS102/6 (Mar. 13, 1998).
109
TRIMS art. 5.3.
110
TRIMS arts. 5.3, 7.
248 AJWH [VOL. 1:229

by the fact that the local program was serving the national interest since it
has resulted in increasing export revenues, increasing receipt of foreign
exchange, and generating both employment and investments relative to the
metal and engineering industries111 – not that these motivations are bad, in
fact they are commendable. The problem though is as stated in the case of
Tanada,112 WTO obligations have the force of law, self-executing, and
enforceable in the entire territory of the country. Perhaps, President Estrada
and his successor, by insisting on the continuation of the CDP, may, among
others, be held liable of gross violation of the Constitution and of our laws,
insofar as international obligations form part of the laws of our land.
Certainly though, we are sure that the WTO dispute settlement mechanism
will certainly decide against the CDP and thereby inflict yet another blow
to our national pride in the realm of international trade litigation.
The rest of our pending issues involve correcting instances of bias
against the entry of our products into the foreign markets, notably in
Australia, the EU and the US.
A trade war between the Philippines and Australia nearly erupted when
Australia banned the importation of Philippine bananas on the ground that
they contained fruit flies which were thought to be injurious to plant and
animal life in Australia, and also because of the use of the banned pesticide,
ethyldibromide. After negotiations bogged down, the Philippines retaliated
by, for all interests and purposes, prohibiting the entry into the country of
Australian beef products on health reasons (Administrative Order 25)
during the time of then Secretary Edgardo Angara. 113 While the
controversy seemed to have subsided somewhat, since the Philippines has
suspended the effect of Administrative Order 25, Philippine bananas
continue to be banned in Australia for the reasons listed above.
The relevant principle in the resolution of our banana controversy with
Australia is the Agreement on the Application of Sanitary and
Phytosanitary Measures (the SPS Agreement). 114 Under the SPS
Agreement, Member states were granted the right to impose measures to
protect human, animal or plant life or health in the territory of Member
states from risks arising either from:
1. the entry, establishment, or spread of pest or diseases;115
2. risks arising from an additive, contaminant toxin, or disease
causing organism;116

111
Memorandum Order No. 68 dated December 21, 1992, “Approving and Promulgating the
Supplemental Guidelines to the Car Development Program (CDP)”
112
Tanada v. Angara, 272 SCRA 18 (May 2, 1997). (Phil.)
113
http://apec.bworldonline.com/Articles/Nov2000/11212000a.html. See also Media Release,
Mark Vail, Austl. Minister for Trade, Dep’t of Foreign Affairs and Trade, Austl. Gov’t (June 26,
2000), http://www.dfat.gov.au/media/releases/trade/2000/mvt066_00.html.
114
Agreement on the Application of Sanitary and Phytosanitary Measures, supra note 14.
115
SPS Agreement Annex A, ¶ 1(a).
2006] PHILIPPINE PRACTICE ON IMPORT REMEDIES 249

3. from a risk arising from a disease or pest carried by an animal

or plant;117 or
4. to prevent or limit other damages in the territory of Member
states arising from the introduction, establishment or spread of a
pest.118
Like other provisions of the WTO, the recourse to the SPS Agreement
is subject to limitations such as:
1. It may be applied only to the extent necessary to protect
human, animal, or plant life or health;119
2. It must be based on scientific principles and SPS measures
may not be maintained without scientific basis;120
3. It must not be applied in an arbitrary or discriminatory
manner where identical conditions prevail;121
4. It should not be imposed as a disguised restriction on
international trade;122
5. Governments must use relevant international standards in the
imposition of SPS;123 and
6. Governments must ensure that their SPS are based on a risk
assessment to assess the risk against human, animal and plant
life.124
Countries who assert that an SPS constitutes a restraint on trade must
show that there is another measure that is reasonably available to the
country applying the SPS, which alternative measure achieves the level of
protection that is deemed appropriate, and that such a measure is
significantly less restrictive to trade.125
In the settlement of this particular dispute between the Philippines and
Australia, guidance may be derived from the decision of the Appellate
Body in the Beef Hormones case filed by the US against the EC.126
In responding to a long standing ban imposed by the EC on American
beef injected with growth hormones on the ground that such hormones
were dangerous to human life, the US instituted proceedings against the EC
for the reason that such a ban was not based on valid scientific evidence
and constituted an unjustifiable non-tariff trade barrier.

116
Id. ¶ 1(b).
117
Id. ¶ 1(c).
118
Id. ¶ 1(d).
119
SPS Agreement art. 2.2.
120
Id.
121
Id. art. 2.3.
122
Id.
123
Id. art. 3.1.
124
Id. art. 2.2. See id. art. 5.1.
125
See SPS Agreement art. 5.6 n. 3.
126
Appellate Body Report, European Communities – Measures Concerning Meat and Meat
Products (Hormones), WT/DS48/AB/R (Jan. 16, 1998) [hereinafter EC – Hormones].
250 AJWH [VOL. 1:229

The Appellate Body rendered a “draw decisions” granting both parities

partial victories. For the EU, the partial victory was that the immediate
removal of the ban was not ordered;127 and the recognition was made that
the EU had the right to impose more stringent standards so long as the
measures are backed by scientific evidence.128 The Appellate body further
ruled that the EU could base its scientific study on a minority scientific
report because the definition of material is qualitative and not quantitative
science.129 It ruled, however, that a ban based on a minority view is
impermissible unless the product poses a life-threatening risk and perceived
to be a clear and an imminent threat to public health.130
The victory, on the other hand for the US, was that the Appellate Body
found that the EU failed to undertake a risk assessment to support the
import ban. It thus found the ban to be inconsistent with Articles 3.3 and
5.1 of the SPS Agreement for lack of a scientific risk assessment that
include an evaluation of the potential adverse effect on human health.131 It
also pointed out that the EU did not provide a rational basis to sustain the
ban.132 Simply put, the Appellate Body asked the EU to put up or shut up,
or to submit its scientific basis behind its ban within a reasonable time. A
reasonable period, per results of binding arbitration, was said to be fifteen
months.133
Applying these principles to our dispute with Australia, it has been four
years since the inception of our banana controversy and as yet, Australia
still fails to present its own pest risk assessment or import risk assessment
to justify the ban against Philippine bananas. Perhaps, given the definition
of what constitutes a reasonable period of time in the context of the Beef
hormones case, it is now opportune for the Philippines to request the
establishment of a Panel to settle this controversy.
The final controversy that confronts us is not a prohibition against the
admission of our products in the territory of the EU and the US, but a case
of discriminatory treatment towards us in that similar products from
specified countries are given tariff concessions not awarded to our like
products, specifically tuna, and thus violate the MFN clause. Both the EU
and the US allow tuna from some less developed countries to enter their
respective jurisdictions without tariffs, while tuna from the Philippines are
levied a duty of up to 24% in both jurisdictions.134

127
Id. ¶ 247(l).
128
Id. ¶ 245.
129
Id. ¶ 205.
130
Id.
131
Id. ¶ ¶ 207, 209.
132
EC – Hormones, ¶ 208.
133
Communication from the Appellate Body, EC – Measures Concerning Meat and Meat Products
(Hormones), WT/DS26/12, WT/DS48/10 (Jan. 16, 1998).
134
Jowel F. Canuday, US assures protection of Mindanao’s tuna exports, MINDA NEWS, Apr. 28,
2006] PHILIPPINE PRACTICE ON IMPORT REMEDIES 251

While it is not surprising that the EU has this preferential system of

tariffs in favor of its very poor former colonies, it is surprising, to say the
very least, that the US has a similar practice – as in fact, it was the US that
successfully challenged this EC practice of granting preferential tariff
treatment for being discriminatory in the famous Bananas case135 it filed
against the EC.
In this latter case, the EC maintained a scheme where bananas from its
very poor former colonies were granted zero tariffs, while those from other
countries were subject to tariffs at different level. In a resounding victory
for the Dole and Chiquita banana, the Appellate Body ruled that this
preferential tariff scheme was a violation of the MFN and was furthermore
a discriminatory form of quantitative restrictions. 136 I see no reason
therefore why the WTO should not rule in our favor when and if we choose
to challenge the similar preferential tariff scheme on tuna currently being
implemented by the EU and the US.

IV. CONCLUSION

In closing, I find that as a matter of law, our Supreme Court has ruled
that the WTO is both constitutional and that it forms part of the laws of our
land. By and large, our laws, as exemplified by our anti-dumping,
countervailing and safeguard measures, as well as the case law from our
Tariff Commission on these measures, are in substantial compliance with
our treaty obligations except insofar that some compromises had to be
made in the drafting of our enabling legislation.
In terms of our actual participation in the dispute settlement mechanism
of the WTO, ours has been a case of non-exercise of treaty rights since we
have but once resorted to this mechanism, despite the fact that case law
seem to be in our favor in some other controversies confronting us, such as
the banana case against Australia, and the case against the EU and the US
for their respective preferential tariff schemes for tuna.
This failure to resort to enforcement of treaty rights under specific
mechanisms under the WTO may have been due in part to our stunning
defeat in the first and only case that we have filed thus far, the desiccated
coconut case against Brazil; and probably, by way of an acknowledgement
that our laws until recently, were not in consonance with the WTO, as may
have been the case in our decision to suspend collection of anti-dumping
duties against Korean resin, a case decided under our old anti-dumping law,

2002, http://www.mindanews.com/2002/05/1st/biz-tuna.html. See also http://www.genderandtra

de.net/Asia/Asia_Tuna.pdf.
135
Appellate Body Report, European Communities – Regime for the Importation, Sale and
Distribution of Bananas, WT/DS27/AB/R (Sept. 9, 1997).
136
Id. ¶ 255.
252 AJWH [VOL. 1:229

although already initiated and imposed after the effectiveness of the WTO.
Further, there has been a propensity to resort to retaliatory measures instead
of availing of the dispute settlement procedures, as exemplified by our knee
jerk reaction against Australia in the banana controversy. There is, finally,
either an intentional misreading of our treaty obligations as a basis for
persisting with a program inconsistent with the WTO such as in the case of
the CDP, or a simple ignorance of what the WTO is all about, as
exemplified by the reaction of no less than the Secretary of the Department
of Trade and Industry to a refusal by the Tariff Commission to impose
safeguard measures on Portland Cement.