The law according to Justice Feliciano

I felt privileged to have been invited to the inaugural session of "Trade, Investment and International Law: Perspectives for Development" about three weeks ago, sponsored by the University of the Philippines College of Law and the law firm of Sycip, Salazar, Hernandez and Gatmaitan. I got an invitation from retired Supreme Court Justice Florentino Feliciano, a former professor of mine, and one of the most brilliant jurists in the national and the global environment, who performed his national and international responsibilities armed with perspicacity and a rare sharpness of mind. And his integrity has always been unimpeachable!

The occasion also marked the launch of what Supreme Court Chief Justice Art Panganiban called "a compelling book about an illustrious judge" entitled Law in the Service of Human Dignity – Essays in Honour of Florentino Feliciano. Published by the Cambridge University Press, the contributors discuss key issues such as human rights and trade, cases on the environment before the World Trade Organization (WTO), and potential reforms of the WTO dispute system.

The book honors Justice Feliciano, who is a greatly respected international adjudicator, and thus assembles essays from the academic world, and some international jurists and practitioners. Valuable perspectives are given as regards jurisprudence of world trade law, the changing landscape of investment arbitration, and other vital dimensions of international adjudication.

I am proud to have been his student at the UP College of Law, and lucky that he was already serving a professorial stint at the Yale Law School at the time I studied there for my Master of Laws degree. He gave me and five other Filipino classmates of mine valuable insights on the teachings of the late Prof. Myres McDougal on Law, Science and Policy, who was his friend and colleague, at the time we were aspiring to be McDougal disciples.

At the same venue, Lilia Bautista, a former classmate of mine at the UP Law School, was one of the speakers, together with Prof. Rudolf Dolzer and Carolyn Lamm. Lilia was former ambassador, extraordinary and plenipotentiary, permanent representative to the United Nations Office, World Trade Organization. She very competently delivered a paper assessing the current WTO negotiations. She was the chairman of the Securities and Exchange Commission (SEC), her most recent government assignment, and was before that an acting secretary of the Department of Trade and Industry where she had been a career service official.

During the seven years that she served as WTO ambassador, I had been assigned to go, quite a number of times, to Geneva where the WTO was based as head of the Philippine delegation to the International Telecommunications Union (ITU) plenipotentiary conferences. ITU is a United Nations specialized agency also based in Geneva. The collaboration that existed between her office and the Philippine delegation was an excellent one.

Ambassador Bautista, in her presentation captioned "An Assessment of Current WTO Negotiations," started by saying that the Doha Round of Trade Negotiations is the ninth round in the history of multilateral trade negotiations and follows the Uruguay Round, which established the WTO as the forum for these negotiations. According to her, the Doha Round was intended to be a development round in response to the cry of developing countries like the Philippines that the WTO agreements have not fully addressed a basic objective to remove the inequities in world trade. Initially, she said, developed countries wanted to include rules on investment and competition policy, but since not all developed countries wanted their inclusion, and the developing countries were not ready for them, these subjects have been left unaddressed in the meantime.

Bautista structured her presentation as regards the developmental aspects of the Doha Round as set out in the Doha work agenda in the following manner:

1) Agriculture: The developing countries are seeking lower tariffs for products of export interest to them, such as tropical products, and expansion of the quota of products subject to the quota system, i.e. EU quota on tuna.

Since developed countries are likewise seeking tariff reductions and other commitments, the developing countries have proposed the concept of special products, which will not be subject to further commitments because its liberalization can have an effect on rural livelihood and consequently, the food security of developing countries. On the other hand, the EU has proposed the concept of sensitive products, which should not exceed eight percent of the tariff lines on agricultural products. This would be available to developed and developing countries and presumably would be on top of the special products of developing countries. The guidelines on the identification of such products are currently under negotiation.

There are also negotiations on the reduction of domestic support. Developing countries are hoping that there will be a 60 percent reduction of domestic support by developed countries to enable products of developing countries to compete with products of developed countries.

On export competition, the EU has agreed to remove export subsidy by 2013. In the past, there has been internal reform within the EU to cut subsidies, but it has not materialized. The agreed 2013 deadline will enable the EU to push for elimination of export subsidy because it has become an international commitment. Such commitment, therefore, can truthfully be an accomplishment of the Round, which is the most tangible one at this time.

2) NAMA (Non-Agricultural Market Access): On non-agricultural market products, tariffs of developing countries are comparatively higher than developed countries, i.e. 34 percent on the average. On the other hand, applied tariffs of developing countries are much lower than their bound tariffs. Developed countries would like more tariff cuts from developing countries.

Unlike agricultural products, which talk of bands of tariff levels and cuts depending on whether or not one is in the higher, middle or lower band, the Swiss formula currently under discussion for NAMA has the characteristic of cutting more for higher tariffs and cutting less for lower tariffs. This is for harmonization purposes. Our negotiators in Geneva are fighting hard for a different co-efficient for developing countries so that the cuts will not reach our applied rates, which are much lower than the bound tariffs.

The NAMA has reiterated flexibilities for certain tariff lines to be exempt from further liberalization.

3) GATS-Services: With respect to services, since GATS (General Agreement on Trade in Services) provided for progressive liberalization in subsequent rounds on top of what has been offered under GATS, the developed countries are moving for more service areas to be opened. Again, movement of natural persons in services is being pushed by some developing countries, including the Philippines. The importance of services in world trade cannot be understated. For less developed countries (LDCs), it is 44 percent of the GDP (gross domestic product), 57 percent for middle income countries, and 71 percent for higher income countries (World Bank 2002 statistics). Additionally, what is being negotiated are the rules in implementing the services agreement such as emergency safeguards and the like.

(To be continued)

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