(lecture given at the Ateneo in 2005)
There is this comment commonly known to all and that is that “all politics is local” . A seeming corollary to this is the comment made by Professor John Jackson that “all economics is international”. It is in these two statements - specifically on what they imply - that a lot of the tension has arisen with regard to the development of “jurisprudence” on international economic law and the present developments in the multilateral trading system.
This tension is essentially distilled into one word and that is: sovereignty. It is this word, this concept, by which the present rules on international trade are most shaped, by which jurisprudence struggles with, and by which the World Trade Organization is in the shape that it is in right now.
The interesting thing about this concept is that it has all been written off by international legal scholars as a mere “nuisance”. Just the other day I have heard - again - a comment by an eminent legal personality that sovereignty is not the thing that it once was, so far removed is it from the original 17th century Westphalian concept of the same.
That may all be well and good but when you see the developments happening in all the other parts of the globe that you see that the comments and observations of intellectuals, as is sometimes the case, registers a disconnect with what happens in the real world. Thus, you see France trying to block the entry of foreign players into its domestic business environment, the EC doing the same to a number of American firms, all under the guise of security or upholding of competition policy laws. While not discussing the merits of the said grounds the fact still remains that foreign investment and trade is being hampered. If one still does not see the possibility of a strong reliance on the concept of sovereignty, as pushed by an increased nationalism, on the part of nations, particularly the developed countries, one only has to look at Chinese and Vietnamese shoes intended to be exported to Europe to get the point.
So, the fact still remains that, far from being an “eroded” concept, sovereignty is still strongly relied upon by politicians, activists, lawyers, and government officials of individual States. The problem here is that, what exactly is sovereignty that so many are relying on? When you listen to our elected representatives, trade activists, musicians and artists, pundits, and even your law professors, what exactly is this concept of sovereignty?
The fact is that the concept of sovereignty is highly ambiguous and this is essentially why there is this tension between international trade and domestic laws, between national rights and the multilateral trading system. If there is a indeed a defined concept of sovereignty then that definition - as experience would show and this lecture seeks to discuss - would most probably be only in the mind, with only the most tenuous link to reality.
Thus, unless this thing, this “sovereignty”, is resolved, there would only be continuing problems in the multilateral trading system, from implementation of the rules to the carrying out of an effective dispute settlement system.
We discuss and elaborate on all these points in order:
A. Ambiguity of sovereignty in Philippine law
Every law student has memorized in his or her head the definition of sovereignty as written in the textbooks. Thus, Justice Isagani Cruz writes in his political law that sovereignty is the “supreme and uncontrollable power inherent in a State by which that State is governed”. According to Justice Cruz, there are two kinds of sovereignty: legal and political,
“Legal sovereignty is the authority which has the power to issue final commands whereas political sovereignty is the power behind the legal sovereign, or the sum total of the influences that operate upon it. In our country, Congress is the legal sovereign, while the different sectors that mold public opinion make up the political sovereign.
Sovereignty may also be internal or external. Internal sovereignty refers to the power of the State to control its domestic affairs. External sovereignty, which is the power of the State to direct its relations with other States, is also known as independence.
Sovereignty is permanent, exclusive, comprehensive, absolute, indivisible, inalienable, and imprescriptible.”
Dean Mariano F. Magsalin, Jr., in his book, discusses sovereignty as follows:
“Sovereignty: The supreme power of the State to command and enforce obedience, the power to which all interests are practically subjected and all will subordinate. It is also defined as freedom from outside control in the conduct of internal and external affairs.
Dual Aspect. Internal sovereignty is the supremacy of a person or body of persons in a State over the individuals or association of individuals within the area of its jurisdiction. External sovereignty is the absolute independence of one State as a whole with reference to other States.
Kinds. Legal sovereignty is the possession of unlimited power or authority that by law involves the power to issue final commands. Political sovereignty is the sum total of all the influences in a State which lie behind the law. It is also described as the power of the people.
Characteristics.
Permanence. Sovereignty continues to exist without interruption as long as the State itself exists.
Exclusiveness. There can be but one supreme power in the State legally entitled to the obedience of the inhabitants.
Comprehensiveness. Sovereign power extends over all persons, associations, and things within territorial limits.
Inalienability. The State cannot cede away any of its essential elements without self-destruction.
Imprescriptibility. The powers of the State cannot be lost as a consequence of its non-assertion or non-exercise through a period of time.
Unity. The power cannot be divided without producing another State.
Those definitions, concepts, and enumerations of characteristics and attributes are all pretty well and good for the law student to study and memorize, in preparation for exams (most particularly the Bar exam), and in essence such are the intentions anyway of the authors. However, in practice, the said definitions do nothing by way of guidance.
Going back again to the definition of sovereignty: “supreme and uncontrollable power inherent in a State by which that State is governed”. The words, while high sounding and majestic, as befits the concept they are supposed to define, are hard to actually put down in the messy world of reality.
Sovereignty is supreme? Supreme as to whom? Definitely not as against other States. Supreme over the people? What then of the concept called the political sovereign? Even then, as our one of two important Supreme Court case on sovereignty shows, the same is not supreme and could be bargained away as is necessary. It is “uncontrollable”. What does uncontrollable mean? How in practice can this uncontrollability be illustrated? Even then, our Supreme Court cases show a sovereignty that is manageable not uncontrollable.
We leave the third clause and focus on the fourth first: “by which that State is governed”. This does not make sense. The State is not governed by sovereignty, sovereignty is an attribute of the State. If not, then this would be contrary to the concept of the legal sovereign and of internal sovereignty.
Again leaving the third clause and moving first to the attributes of sovereignty, one can see that again the same leaves no cause for guidance. The attributes were culled from the Supreme Court case of Laurel vs. Misa, by which it is enumerated as follows: permanent, exclusive, comprehensive, absolute, indivisible, inalienable, and imprescriptible.
Perhaps no discussion is possible on the attribute of permanent and exclusive. Note, however, that with the concept of pacta sunt servanda, exclusivity is a little bit mitigated because if the State itself is obligated to comply with its international obligations then indirectly so does it citizens. With regard to the attribute of comprehensive (“sovereign power extends over all persons, associations, and things within territorial limits”) this isn’t exactly accurate as persons or organizations granted State immunity (as differentiated from diplomatic immunity or immunity from the jurisdiction of local courts) are not exactly under the sovereign powers of a State. As to the “absolute” attribute and “indivisible”, what do they exactly mean? They have not been defined either by jurisprudence or by that of legal commentators. If “indivisible” would such have a bearing if our republic becomes a federal society? What, in practice, could be mean? It is interesting to note that in Tanada vs. Angara , the Supreme Court uses the following words: “By their inherent nature, treaties really limit or restrict the absoluteness of sovereignty. By their voluntary act, nations may surrender some aspects of their State power in exchange for greater benefits granted by or derived from a convention or pact.” And it continues: “[As illustrated by numerous existing treaties of which the Philippines is a party to], the Philippines has effectively agreed to limit the exercise of its sovereign powers of taxation, eminent domain and police power. The underlying consideration in this partial surrender of sovereignty is the reciprocal commitment of the other contracting States in granting the same privilege and immunities to the Philippines, its officials and its citizens.” Of “inalienable”, what is the extent of this “inalienability” as can be seen vis-à-vis the case of Tanada?
We go now to the third clause and this is most interesting: “inherent in a State”. This presupposes that sovereignty is that which is necessary to be there in order for a State to be considered as such. So we go now to a discussion on what is a State.
“States”, as defined by Cruz: is a group of people, living together in a fixed territory, organized for political ends under an independent government, and capable of entering into international relations with other states.
The following is what the definition of a State is as enunciated by the Supreme Court: “A community of persons, more or less numerous, permanently occupying a definite portion of territory, independent of external control, and possessing a government to which a great body of inhabitants render habitual obedience.”
The foregoing definitions, presumably, were culled from the provisions of Article 1 of the 1933 Montevideo Convention on Rights and Duties of States: “the state as a person of international law should possess the following qualifications: permanent population, defined territory, government, and capacity to enter into relations with other states”.
Two things: the Montevideo Convention didn’t exactly define what a State is, it merely described what are the attributes that a State should have. Secondly, the Montevideo Convention has traditionally been accepted as reflecting generally the requirements of statehood under customary international law
For our purposes this evening, we will not discuss the other three attributes (people, territory, government) and, instead, focus on the fourth: the capacity to enter into relations with other States. This is not exactly the concept of sovereignty. What this fourth requirement actually denotes is an attribute of independence. In order to conduct relations with other states, a State must be legally independent from the authority of any other State.
The concept of sovereignty is different from the concept of independence. This much alone is admitted by the writings of two of our legal experts. Justice Cruz goes on in his International Law that:
“Independence has been described as the external aspect or manifestation of sovereignty, that is, the power of the State to direct its own external affairs without interference or dictation from other States. The degree of its freedom in this regard determines the status of the State as an international person.”
Father Bernas goes on to define as sovereignty in the following sense:
“Sovereignty means independence from outside control. The Montevideo Convention expresses this in positive terms as including the ‘capacity to enter into relations with other States’. This latter element of sovereignty, however, is dependent on recognition.”
So note must be made that Cruz says that “independence has been described as the external aspect or manifestation of sovereignty”. Bernas, elaborating on his first sentence, states that “capacity to enter into relations with other States”, is an “element of sovereignty”.
The point is, independence is different from the concept of sovereignty. Sovereignty is not the “capacity to enter into relations with other States”. Taking the foregoing with the above dissection of the accepted local definitions of sovereignty and its Supreme Court enunciated attributes, do we really have any practicable workable idea of what sovereignty is? The seemingly inescapable conclusion is: none.
We move our discussion to how sovereignty is explored by international law writers working either in foreign jurisdictions or in the international arena.
B. Sovereignty as an international law concept
Notably, the intellectual origins of international law run concurrently with the development of sovereignty. Two leading figures were Hugo Grotius and Gentillus, both theologians by training. Their thesis simply was that international law was municipal law writ large. However, note that boundaries of nations do not move as the boundaries of private estates do. The doctrine of equality of States was introduced into the theory of international law by the naturalist writers. Thus:
“By nature all nations are equal the one to the other. For nations are considered as individual free persons living in a state of nature. Therefore, since by nature all men are equal, all nations too are by nature equal the one to the other.”
This doctrine sees equality despite differences in size, power, wealth, etc. See Art. 2(1) of UNC: the organization is based on the principle of the sovereign equality of all its members.
Due to the problems of the concept of equality, the better view however is to equate equality with independence. The following are the legal consequences of sovereign equality:
Prima facie jurisdiction over a territory and the population living there
States have a duty of non-intervention in the area of exclusive jurisdiction of other states
- No state can claim jurisdiction over another
- The courts of one state cannot question official acts of another state taking effect within the latter’s jurisdiction
- Municipal courts will not exercise jurisdiction over a foreign sovereign in his public capacity
Jurisdiction of international tribunals depend on the consent of parties
- In the Eastern Carelia Case of 1923 , PCIJ ruled: it is well established in international law that no state can, without its consent, be compelled to submit its disputes with other states either to mediation or to arbitration or to any kind of pacific settlement
- Finally, note that international law has no concept of stare decisis
As to the concept of domestic jurisdiction, it is the principle that certain matters are within the exclusive competence of States and are not subject to international obligations (i.e. granting of nationality, treatment of nationals). Thus, as provided for under the UNC, Article 2, paragraph 7: “Nothing contained in the present Charter shall authorize the United Nations to intervene in matters which are essentially within the domestic jurisdiction of any State or shall require the Members to submit such matters to settlement under the present Charter; but this principle shall not prejudice the application of enforcement measures under Chapter VII.”
In practice, however, Art. 2(7) has been given a narrow interpretation, UN organs taking the position that if a matter is contrary to principles and purposes or peace and security, UN may override domestic jurisdiction considerations. “The corollary of the independence and equality of States is the duty on the part of States to refrain from intervention in the internal or external affairs of other States. x x x The general position is that the ‘reserved domain’ is the domain of State activities where the jurisdiction of the State is not bound by international law: the extent of this domain depends on international law and varies according to development.” “The relativity of the concept of the reserved domain is illustrated by the rule that a State cannot plead provisions of its own law or deficiencies in that law in answer to a claim against it for an alleged breach of its obligations under international law.” This limitation of the concept of domestic jurisdiction is also well illustrated by the power of a State to impose customs tariffs, which is presumably a purely domestic concern but nevertheless is regulated as well by international law.
Going back to sovereignty, there seems to be a consistent lack of unanimity even as to international law commentators in other jurisdictions as to what sovereignty is. Thus, for Glahn, sovereignty is the “ability to regulate its internal affairs without outside interference or control.” This, however, is very much suspiciously akin to the concept of independence, which, as we’ve seen, is an element of sovereignty.
Shaw focuses instead on the Montevideo Convention, particularly the phrase “capacity to enter into relations with other States”. For Shaw the “essence of such capacity is independence. This is crucial to Statehood and amounts to a conclusion of law in the light of particular circumstances. It is a formal statement that the State is subject to no other sovereignty and is unaffected either by factual dependence upon other States or submission to the rules of international law.” This is seconded by Harris: “When the Montevideo Convention refers to ‘capacity to enter into relations with other States’ as a requirement of statehood it is referring to independence.” This refers to “factual, as well as legal, independence from other States.”
Nevertheless, Shaw makes several important points: “The capacity to enter into relations with other States is an aspect of the existence of the entity in question as well as an indication of the importance attached to recognition by other countries. It is capacity not limited to sovereign nations, since both international organizations and non-independent States can enter into legal relations with other entities under the rules of international law. But it is essential for a sovereign State to be able to create such legal relations with other units as it sees fit. Where this is not present, the entity cannot be an independent State.” From this statement alone, one can see that capacity to enter into relations, independence, and sovereignty are three distinct concepts.
Now Brownlie approaches the discussion in another way: “Another perspective is provided by the notion of sovereignty as discretionary power within areas delimited by law. x x x Yet in all these cases the exercise of the power is conditioned by the law.” “In application of rules or in case of an absence of rules, the presumption is that States have legal competence or is one of incompetence. In the Lotus case, the Court decided the issue of jurisdiction on the basis that ‘restrictions upon the independence of States cannot be presumed’. However, there is no general rule, and in judicial practice issues are approached empirically.” Nevertheless, again, this seems to blur distinctions between independence and sovereignty and, this time around, talking as he does of “discretionary power within areas delimited by law”, of jurisdiction. He does interestingly point out that “in all these cases the exercise of the power is conditioned by the law.” The point here is that, whether he was actually talking of jurisdiction or of sovereignty, the implications are large, more so if he was indeed talking of the latter, talking as he does of the supremacy of international law (which is unacceptable in the domestic sphere).
This blurring between sovereignty and jurisdiction can also be seen in the following, by comparing Brownlie’s two paragraphs quoted immediately below:
“Sovereignty is also used to describe the legal competence which states have in general, to refer to a particular function of this competence, or to provide a rationale for a particular aspect of the competence. Thus, jurisdiction, including legislative competence over national territory, may be referred in the terms ‘sovereignty’ or sovereign rights’.
“Jurisdiction refers to particular aspects of the general legal competence of States often referred to as ‘sovereignty’. Jurisdiction is an aspect of sovereignty and refers to judicial, legislative, and administrative competence.”
Finally, you have John H. Jackson, who is, presumably from his writings, not that big a fan of sovereignty. For him, sovereignty is essentially a question of “power allocation”, although he does mention a legal commentator who calls it “organized hypocrisy”. In any event, he cites in one article the following types of sovereignty: “Domestic sovereignty [is the] organization of public authority within a State and to the level of effective control exercised by those holding authority; interdependent sovereignty [refers to the] ability of public authorities to control trans-border movement; international legal sovereignty [is the] mutual recognition of States or other entities; Westphalian sovereignty [is the] exclusion of external actors from domestic authority configurations.” However, Jackson does make a crucial point which is in a way a peripheral theme of this lecture and that is there seems to be no inherent or definite understanding of what sovereignty is and that the same seems to be dependent on custom and on the practice of each individual State.
If that were so, then the concept of sovereignty as understood here, is as good as any and thus it is to this concept, whatever it is, that we return.
C. Sovereignty, Tanada vs. Angara, and the WTO
Tanada vs. Angara was filed in 1994, heard in 1996, and in 1997 - or three years after the case was filed and two years after the WTO came into being – it was finally decided.
We will not discuss the details of the case and instead focus on the matters relevant to this lecture. Relevant is the contention by the Petitioners that our entry into the WTO violates Article II, Section 19 of the Constitution, which reads:
“The State shall develop a self-reliant and independent national economy effectively controlled by Filipinos.”
Also Article XII:
“Section 10. x x x The Congress shall enact measures that will encourage the formation and operation of enterprises whose capital is wholly 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.”
“Section 12. The State shall promote the preferential use of Filipino labor, domestic materials and locally produced goods, and adopt measures that help make them competitive.”
I’m surprised they didn’t make reference to Section 13: “The State shall pursue a trade policy that serves the general welfare and utilizes all forms and arrangements of exchange on the basis of equality and reciprocity.”
While the petitioners didn’t refer to Article III.1 of the GATT , which I think was relevant, they did make reference to the TRIMS:
“Article 2 - National Treatment and Quantitative Restrictions
1. Without prejudice to other rights and obligations under GATT 1994, no Member shall apply any TRIM that is inconsistent with the provisions of Article III or Article XI of GATT 1994.
2. An illustrative list of TRIMs that are inconsistent with the obligation of national treatment provided for in paragraph 4 of Article III of GATT 1994 and the obligation of general elimination of quantitative restrictions provided for in paragraph 1 of Article XI of GATT 1994 is contained in the Annex to this Agreement.”
Most crucially, the petitioners made reference to Article XVI.4 of the Marrakesh Agreement Establishing the World Trade Organization:
“Each Member shall ensure the conformity of its laws, regulations and administrative procedures with its obligations as provided in the annexed Agreements.”
Thus, in Tanada: “It is petitioners’ position that the foregoing ‘national treatment’ and ‘parity provisions’ of the WTO Agreement ‘place nationals and products of member countries on the same footing as Filipinos and local products,” in contravention of the ‘Filipino First’ policy of the Constitution.”
The Supreme Court, nevertheless, ruled against the petitioner:
“… while sovereignty has traditionally been deemed absolute and all-encompassing on the domestic level, it is however subject to restrictions and limitations voluntarily agreed to by the Philippines, expressly or impliedly, as a member of the family of nations. Unquestionably, the Constitution did not envision a hermit-type isolation of the country from the rest of the world.”
“By their inherent nature, treaties really limit or restrict the absoluteness of sovereignty. By their voluntary act, nations may surrender some aspects of their State power in exchange for greater benefits granted by or derived from a convention or pact. After all, States, like individuals, live with coequals, and in pursuit of mutually covenanted objectives and benefits, they also commonly agree to limit the exercise of their otherwise absolute rights.”
“[As illustrated by numerous existing treaties of which the Philippines is a party to], the Philippines has effectively agreed to limit the exercise of its sovereign powers of taxation, eminent domain and police power. The underlying consideration in this partial surrender of sovereignty is the reciprocal commitment of the other contracting States in granting the same privilege and immunities to the Philippines, its officials and its citizens.”
This ruling is not without logic and it’s reasoning in fact is supported by international law literature. Thus, Brownlie states that: “The institutional aspects of organizations of States result in an actual, as opposed to a formal, qualification of the principle of sovereign equality. x x x Of course it can be said that on joining the organization each member consented in advance to the institutional aspects, and thus in a formal way the principle that obligations can only arise from the consent of States and the principle of sovereign equality are satisfied.”
Furthermore, international trade law commentators Trebilcock and Howse indeed agrees that: “All international treaties, whether relating to nuclear disarmament, human rights, the environment, the law of the sea, or trade, constrain domestic political sovereignty through the assumption of external obligations. x x x … trade treaties that structure relations by reference to durable, well-defined substantive norms and objective dispute resolution procedures reduce the risks of larger countries exploiting raw economic power to bully smaller countries, by subjecting power relations to some form of legal ordering. In addition, smaller countries typically stand to gain disproportionately from trade liberalization.”
The Catholic Church’s doctrine, enunciated in Number 435 of the Compendium of the Social Doctrine of the Church, seems to be in agreement with the reasoning in Tanada vs. Angara: “National sovereignty is not, however, absolute. Nations can freely renounce the exercise of some of their rights in view of a common goal, in the awareness that they form a ‘family of nations’ where mutual trust, support and respect must prevail.”
In terms of logic and reasoning, there is indeed nothing much one can say with which the Supreme Court met the concerns of the petitioners, at least those which we pointed out and leaving others to another time. However, it is the philosophical implications of the Supreme Court’s ruling that is of interest to us here and bears worth further examination.
Essentially, what the Supreme Court laid bare in the case of Tanada is a concept of “sovereignty” that is seemingly in keeping with the concept as apparently understood by international law commentators, albeit with its ambiguities, that at the same time is seemingly different from the concept of an absolute, indivisible, inalienable sovereignty, a sovereignty that is supreme and uncontrollable that had been the hallmark of previous or traditional national understanding of sovereignty.
In his annotation to the Tanada case in the SCRA, Jorge Coquia stated that: “It is obvious that the term “sovereignty” has now lost the meaning attributed to it in the past centuries. States may still be described as ‘sovereign States’ but their sovereignty is under the law to which they have bound themselves by the UN Charter. It is sovereignty in the fields of national law or domestic jurisdiction that lie outside the newer areas controlled by international law.”
This reading of the concept of sovereignty obviously jives with the reading of sovereignty by the Supreme Court in Tanada. Inasmuch as the judiciary and apparently the greater body of the legal academe is in agreement with this present understanding of sovereignty, the question that remains is whether perhaps such understanding is shared by the greater Philippine community.
D. Conclusion
“The erosion of the concept of ‘sovereignty’ in international affairs has been much commented on. Perhaps in no context more than international economic affairs has this erosion actually occurred.” Thus so says John Jackson, thus so says the Philippine Supreme Court. That statement seems to have been proven most true in the Philippines with the ruling in Tanada. Having said that, a cursory survey of the statements and declarations of other members of the body politic, from politicians and trade activists, NGOs and members of the general academe, the concept of sovereignty is still invoked with passion and resolute reliance.
The reason being is the undeniable ambiguity that the concept of sovereignty has. Whether it is ambiguity in the Philippine context or in the greater realm of international law study (by which our present legal understanding of sovereignty seems to be anchored on), sovereignty is still - in a workable, practicable, categorical sense - undefined.
This concern is furthered by the fact that there is a seeming acceptance, even favor, to this continued ambiguity. For bureaucrats because of the available policy space it creates, to activists and legal practitioners because of the wide parameters within which to shape advocacies, to politicians because its vagueness lends itself easily to rhetoric.
So what are the implications for the situation that we are currently in? For the WTO, the implication is a continued danger for the multilateral trading system. Member countries will continue to pull and tug at the provisions and the rulings of the DSB in a manner that may eventually derail the WTO both as a negotiating forum and as a venue for justiciable disputes. The probability has been forwarded that the WTO as a negotiating forum could be rendered naught but with its DSB still in full form. This I believe needs to be further examined because if the WTO as a negotiating forum is rendered meaningless, the lack of new trade rules that will reflect present trade realities will eventually render the WTO dispute settlement system futile. Now, some suggested remedies for this admittedly dire (perhaps) scenario are a) for the realm of public international law to find a solution to this definitional conundrum of sovereignty, b) for the WTO Members to come to an agreement that will circumvent this conundrum, or c) for the WTO Members to voluntarily desist from giving in to “sovereignty arguments”. All three remedies are highly difficult to achieve, particularly the last two for the reasons stated above.
For the Philippines the implication would be the continuation of the status quo, which is both a bane and a boon. Taking the positive side first, the ambiguity allows the Philippines a wide policy space within which to interpret the economic provisions of the Constitution and at the same time within which to formulate trade policy. On the minus side, the ruling in Tanada does paint the Philippines in a legal corner. For having conceded to a mitigated power of sovereignty and, if the writings of Coquia are of influence (which they are), a narrower scope of sovereignty (to mere domestic jurisdiction - which it must be remembered is narrowly getting construed by international law), then the Philippines may have just given itself a weaker legal justification for an aggressive trade policy if it so decides in the future. On a wider view, the lack of a determined compass within which to guide ambiguities in our trade future would certainly have to be engaged sooner or later.
I think I shall stop here.
