WTO case: Philippine taxes on distilled spirits

is the subject of my Trade Tripper column in this Friday-Saturday issue of BusinessWorld:

As we mentioned, after the country’s historic win at the WTO in the Thai Cigarettes case, the Philippines is again before a WTO panel tangling this time with the European Commission. The EC’s complaint points to GATT Article III, the "national treatment" provision, and alleges that the Philippine tax structure (under RA 9334) on distilled spirits discriminates against imported products. The United States later filed its own separate complaint, with Australia, China, India, Mexico, Thailand, and Chinese Taipei coming in as third-party complainants.

The case is formally lodged as Philippines -- Taxes on Distilled Spirits (docketed as DS396; with DS403 being the US complaint). Interestingly enough, when consultations for this case began in October 2009, the EC and Uruguay had just announced settlement of their own WTO case. The EC’s claim centers on the allegation that Uruguay imposed a discriminatory excise tax on imported Scotch whisky. Uruguay agreed to amend its laws, thus averting WTO litigation.

National treatment is one of two foundational principles that run through the WTO Agreements (the other being the "most favored nation" principle, more popularly known as "mfn"). Both, though appearing to be quite simple, are rather complex in application and have given rise to a large number of problems in interpretation and implementation. Figuring highly in these discussions is the term "like products," a highly complex term as well and actually the focal point of the deliberations in the three previous WTO alcoholic beverage cases involving respondents Japan, Korea, and Chile, respectively. All three cases had the EU and US as complainants and all three resulted in wins for them.

The problem with the national treatment principle is that its enforcement leaves a lot of room for varying interpretations and approaches. On the whole, such ambiguity seems to have favored those asking for implementation of the same. WTO panels (as well as free trade agreements) have applied standards such as "intent," "likeness" (or "regulatory purpose"), "necessity," and "discriminatory treatment." This fact seems to be very much on the mind of the EC when it filed its first submission last November:

"105. In the light of the above, it is useful to recall once again that the vast majority of imported products are subject to the higher tax rates whereas all (or most of) local products enjoy the lower tax rate. It has just to be pointed out that the fact that few imported products (e.g. ‘Bacardi’) may also enjoy the lower tax rate does not exclude that the measures violate Article III:2. As the Panel in Argentina -- Bovine Hides made it clear: ‘Article III:2, first sentence, is applicable to each individual import transaction.’ It is thus sufficient to establish a breach of that provision that some (or even one) imported product is taxed in excess of a like domestic product."

From the above, one can see that the EC is leaving no room for chance, essentially making (as far as I can make it out) a play for the "likeness" and "discriminatory treatment" standards. As a commentator puts it, the EC claim effectively lays "the different options for non-discrimination standards in front of the panel."

The US seems to be taking the same approach as well, staking a claim on "intent," "likeness," and "discriminatory treatment." The US (judging from its Nov. 17, 2010, opening statement) is obviously unimpressed with the Philippine submission:

"7. While the facts and the law in this dispute are quite straightforward, the Philippines has attempted, through its lengthy first submission, to add confusion and complexity. The United States will not describe in detail each of the Philippines’ attempts to complicate the facts or law before the Panel. Instead, we will respond to several of the main arguments raised by the Philippines."

"42. In its submission, the Philippines takes issue with some aspects of the U.S. evidence, but it cannot wipe away the picture they show: Philippine spirits are made and marketed specifically to compete directly with imported products. The United States has more than met the complainant’s burden of making a prima facie case on the question of ‘like product’."

"43. Regarding the second element of a case under the first sentence of Article III:2, the Philippines offered no rebuttal to the information that the United States provided confirming that imported products are taxed in excess of domestic products. As is plain from the Philippines’ law and regulations, the tax applied to brands not made from local raw materials -- namely, imports -- is from about 10 to 40 times greater per proof liter than the rate applied to domestic brands."

Clearly, it would’ve been nice to discuss how the Philippines argued back on the foregoing. But, unlike the easily available EC and US documents (Australia’s as well; their governments’ transparency is such a nice thing indeed), it’s just quite difficult to find the Philippine submissions on the Internet. If ever it was posted at all, that is.


Do the right thing: oppose RH bill

is the subject of my Trade Tripper column in this Friday-Saturday issue of BusinessWorld:

The disappointing (yet unsurprising) thing about the twisting of the Pope’s words on condoms by the pro-RH advocates and some newspapers (probably the same thing; but this does not include BusinessWorld) is how incredibly sloppy it was done and how easy it was for them to resort to outright lying. The Pope never said anything even remotely near to what some of the local headlines hysterically screamed -- he never said condoms are permitted even to prevent AIDS, he never said condoms are the lesser evil, and he never said anything that effected even a slight shift on Church stand on contraception.

The Pope also did not impliedly agree to the "if one can’t be good then be safe" argument in relation to the "male prostitute" example. What he merely meant was: by using the condom, there’s a "basis" for thinking that the male prostitute is beginning to think of others rather than only of himself. It’s like teenagers settling for oral sex to avoid getting pregnant or bank robbers bringing guns to scare people but without bullets to avoid the possibility of killing others. Both indicate that the subject participants are starting to think of others rather than selfishly about themselves. But is the Church recommending people engage in illicit oral sex or to rob banks with guns without bullets? No. It’s saying, for the love of God and each other, stop all such activities. Period. The Pope, reverting to his teaching role, simply illustrated the possibility of a glimmer of hope that from the dregs of sin there could be "a first step in a movement toward a different way, a more human way."

So, fine, it’s clear that the Pope did not change Church stand on condoms and contraception. But what does this have to do with the economy and trade, for which the Trade Tripper is supposed to be focused on? The simple answer: A LOT.

Contraceptives (according to international research) ruin female health, particularly causing dangers such as cancer (specifically breast cancer), stroke, and heart disease. Condoms also give a false sense of security (condoms fail at least 5% of the time), encouraging the illusion of "safe sex," thus increasing the possibility of AIDS or unwanted pregnancies (proven by international studies as well). Aside from, therefore, ruining the social fabric, contraceptives pose an imminent drain on our workforce and divert scarce government resources to attend to the damages that contraception brings.

Also, we know that our primary competitive advantage is our services sector, with the OFWs propping up our economy. Other countries, such as Japan and several European countries (and perhaps Singapore too), are having economic and social problems due to their ageing populations (i.e., not having enough healthy babies being born). Other countries, like China, are concerned about their scarcity of women. For the Philippines, having a healthy, youthful, dynamic workforce, to want to shoot itself on the foot and be like our competitor countries is idiotic.

Furthermore, we know that the best economic policy is good education. We also know that our government finances are limited. So why are we spending almost a billion pesos of our budget (as the RH bill will require) to distribute and promote contraception to our people? This is hundreds of millions that could have been better spent elsewhere, particularly on medicines, labor training, infrastructure, or -- most importantly -- education. And yet, while our government is willing to spend millions on contraception, it significantly reduced our education budget.

Finally, the RH bill goes against our Constitution. Note that there’s no law banning the private purchase of contraceptives. The Constitution does, however, prohibit discriminatory treatment against any single religion. The RH Bill discriminates against Catholics by forcing them to support (by mandatory promotion of contraceptives or through the duty to pay taxes) something they believe is immoral. The RH bill also goes against those constitutional provisions upholding the family as a cherished institution, as well as the rights of women and children.

Never mind the surveys. So what if 69% allegedly support contraception? Our government has strangely similar approval numbers considering that, in a span of only five months, it saw the worst killing of tourists in history, embarrassment in Vietnam by louts, wasted P5 million on a stupendously stupid tourism campaign, an unresolved fuel leak, peace negotiators rude to members of Congress, worsening traffic, increased terrorist warnings, Supreme Court rejection of the "Truth Commission," all topped off by this government’s obvious lack of direction.

So ignore the surveys. There’s a difference between what’s popular (or mentally incapacitated) and what’s right. Set aside religious doctrines, on definite and vital health, social, educational, labor, economic, and constitutional grounds alone, to oppose the RH bill is clearly the right thing to do.

For those reasons, Trade Tripper urges everybody to write or talk to their congressman and make them do the right thing: to vote against the RH bill.


Why we must fight the RH bill our way

Condom confused

The disappointing thing surrounding the present debate on the RH bill (and there are actually many) is how easy it is for the pro-RH side, the so-called "free thinkers", to resort to lies, misleading statements, or even intellectual laziness in expressing their positions.

Case in point is the Pope's comments on condoms. Nowhere in his interview with Peter Seewald did he indicate a shift in Church position, impliedly agree to the lesser evil argument, impliedly agree to the "if you can't be good then be safe" position, or that condoms are permissible in relation to AIDS. And yet, the pro-RH advocates make it out as if there was a major shift in Church thinking. Or worse, they use it to declare that the Church is being inconsistent or confused. All this without even bothering to get the explanations of those really well-versed on the subject or, worse, without referring to the Pope's actual words (even going to the extent of inventing words he did not even say).

The Church is not inconsistent or confused; it is the pro-RH advocates who are. To anybody who actually read Light of the World (I did), far from the Pope showing inconsistency or confusion, he actually gave a vision full of hope and optimism, as well as a clear eyed view and understanding of the human condition. This is a Pope (and a Church) that understands. And this should encourage us, Christians, to have a better understanding as well.

This article is not about the Pope's comments (better explained in other articles by far better writers than I am) but rather as to how the nature of the debate on the RH bill, I believe, is to be conducted. None of what I am about to say is original. They have been culled from teachings stretching all the way from the most modern of saints to the early Church fathers to our lord Jesus Christ. Any error is mine and should not be attributed to the Church and its truthful doctrines. The important thing that I just hope to seek to emphasize is that for those (particularly Catholics) who are against the RH bill and are for a better, humane way of life is that they should always remember the correctness of our position ... and what, more importantly, that actually means.

Better right than popular

Listen to the pro-RH group and it is easy to spot the lack of logic, the inconsistencies, the shallowness of their arguments. Once in a while, they do come up with an argument that seems, on the surface, valid. But which, on closer examination, actually supports the argument against the RH bill and contraception even more.

On the other hand, the Catholic position in this regard is substantive, unified, logical, and cohesive. It is also incredibly rational: from the perspective of health, female and children's rights, labor, trade, the economy, social sciences, and the constitution, the position of the Church is solid. And this is without even reference to the religious doctrinal arguments at its disposal. No survey or popularity rating can or should distract us from this fact.

The arguments against the RH bill have been written extensively in other articles and by other writers and we need not repeat them here. What I am merely trying to stress at this point is the strength of our position, the truth that lies at the core of Church teachings.

And the pro-RH advocates (at least those smart enough to study on the matter) know this even though they won't admit it. That is why they repeatedly exhort and congratulate themselves on their supposed efficient use of public relations and marketing to advance their agenda, and why they mock the Church for it's supposed ineptness in the PR game. But even that betrays their fundamental lack of understanding, either of the consequences of what they are saying or of the Church and it's teachings.

By their heavy reliance on PR, they do not realize that they themselves are exhibiting acts of faith, albeit not faith in a god or higher being but faith in a shallower sense, faith in a very human, very transitory, practice or creation - public relations. And by their faith in the power of PR, they essentially destroy their own arguments in which they allegedly celebrate humanity and free will. By inadvertently framing the debate on who can make a more judicious, creative use of PR, they essentially view people as controlled and acting under mere compulsions and stimuli - that with a few choice words or pictures properly timed, any person can be made to decide in a certain way.

This is precisely what the Church is arguing against, the notion that people are slaves to compulsions and desires. Instead, it is the Church that believes that people have the free will to make a choice and that they have the ability to choose the right choice. And that is why, although it must be said that public relations, advertising, marketing, etc., are all honorable occupations, all of such are merely to be viewed as instruments for the truth. And when the instrument is overriding the very purpose for which it was created, then an imbalance of priorities is there, indicating that something wrong has gone in the process. The Church is staking its position on the correctness and truth of its teachings. Not on how cool, sexy, creative it is but on it simply being the truth, which by itself is powerful enough as it is. Perhaps the case would be different if there are competing truths on the matter, whether it be the better detergent, toothpaste, or politician. Then advertising matters as it does, spin would have the relevance it might have. But this is not the case in this regard. There is one truth and it is the Church that holds it.

Truth is as truth does

Of course, there will be the howls of protest about that last sentence. But indeed Catholics should not be ashamed of that fact. While other religions, denominations, etc., are free to believe what they believe and we respect them for that, we Catholics should not shirk from proclaiming that our faith possesses the complete and actual truth. Theologians can give a better explanation than I could but let me just put it this way: if we didn't have possession of that complete and actual truth, then why believe in the Catholic faith? We believe it, we fight for it, precisely because we believe our faith is true. Other faiths may possess portions of that truth (hence a good reason for us to respect and exercise tolerance for that) but our Church teaches us that the Catholic faith solely contains that perfect truth.

Having said that, then it all becomes the more obvious how disappointing it is that fellow Catholics should be acting the way they did. While clearly it is understandable for people in certain situations to lose their temper or act in a manner less than becoming, we should perhaps reflect again on what it means to be Christian, to be Catholic, particularly in dealing with the issues that we are confronted with today.

For certainly, we are in for a fight: a fight against the RH bill, a fight against an unhealthy form of secularism, a fight against a relativism that holds no respect for values or morals. These certainly are fights worth fighting. But our faith requires us to fight these fights as Christians, as Catholics.

The way, the truth, and pro-life

It is definitely no accident that Jesus referred to his teachings as "the Way" and, in fact, the term "Christians" would only come much later after His death. This means that Jesus' teachings, the tenets of our faith, is not limited to mere church attendance on Sundays but rather for every day and every moment of our lives. The way we eat, sleep, relate to other people, dress up, study or work – these should all be guided by the points of our faith. Christianity is not a mere religion, it is a way of life. And that life is one that is bound to struggles. Jesus never promised a smooth sailing in our earthly lives but he did teach us how to give meaning to the struggles we face everyday, to give sanctification to whatever ups or downs we encounter in our daily existence. Ultimately, what Jesus taught us is a way of living a better life, not only in this Earth, but also of a way of reaching our final and true purpose: to be with God.

Translated in relation to the debate relating to the RH bill, it means that before we act or say anything, such should be done with the consideration that God is always (as it should be) in the equation. Thus, it would be of the utmost help that our instinctive first step before doing anything is to pray. Pray for guidance, to offer to Him whatever actions we will do, to pray that our actions are in line with His will, to pray for grace, in thanksgiving, and to pray that our own wretched sins be forgiven.

The last is quite important. We should have the humility to recognize that we are all sinners. That nothing much is separating us from the pro-RH advocates except for the grace granted to us by God and which we don't deserve were it not for His generosity. Having made that recognition, we should then take the time to make acts of mortification and atonement. This is vital as it opens us all the more to properly being closer to His will. It also enables us to strengthen our faith and temper our actions with humility.

After that (and only then) do we act. For we should be incredibly and utterly careful not to fall into the trap of being self-righteous, which is but another disguise for arrogance. It is simply not Christian to insult others (no matter how insulting those others may be) and definitely very un-Christian for us to wish harm on others (even if those others wish that upon us). It would be a huge waste indeed if instead of turning people towards right we instead turn them off because we ourselves turned wrong by not practicing what we preach. I confess that I myself have resorted to teasing and at times have gotten carried away with that teasing, particularly in the heat of an argument (mea culpa, mea culpa, mea maxima culpa …). But to call others as "Satanas" or to have hoped that "their mothers should have aborted them" is quite a bit over the edge. Albeit, it is quite understandable to lose one's temper in the midst of people who are apparently acting with malice and hypocrisy (pretending to join a pro-Life prayer meeting to "merely listen" while wearing shirts with slogans offensive to pro-lifers and distributing pro-RH pamphlets is not only rude but also not a very smart thing to do). And I mention this not to put undue reproach or blame. The past is past, and is only good to learn from but not to dwell in. The point here is this: we, specially from now on, when our struggle takes the point of being crucial, should always keep in mind who we are: Christians.

Yoda was right: not only is anger not good as it leads to hate (which leads to suffering), anger is also a manifestation of fear. We exhibit anger out of the fears we have. But a Christian should never have fear, should never fear anything. The reason is simple: we are God's children and God is our Father. The technical theological term for this is "Divine Filiation." But by however way you call it, in Christianity we have been called with Christ to share in his sonship and thus are able to call God as our Father. This should tell us one thing that should fill us with assurance: there's no way we can ever lose because our Father never loses because He is God.

In the context of the RH bill debate, this tells us that we should never let the fear or frustration that we might get beaten by the pro-RH people get to us because, simply put, they won't win. First of all, if the RH bill gets defeated, it did so not because of us but despite us. It was God working His will through us, His highly flawed instruments. Any victory attained was achieved by the Hand who wielded the instruments and not by the instruments themselves. If the RH bill gets passed it's because He allowed it, for reasons only He knows, but then we know that He allows things to happen because it will be to our good, because with God all is for the good, because God is good. If the RH bill is passed, let us not lose our peace because His will was done and to do His will is what we are here for. His will being done, let us be thankful, pray to understand His will better, and be happy. The point is, as children of God, we can never lose and this is our faith.

This does not mean that we do not give our best in defeating the RH bill. We should do our best for the simple reason that our acts are opportunities to be closer to God and we therefore offer our works (actually everything: our joys, sorrows, thoughts, words, etc.) to him, to praise Him, honor Him, and to give thanks to Him, and to bring, through our works, the world closer to oneness with God. We thus give our best because one simply does not offer mediocrity to God. In the same way we offer the best gifts we can give to the best of our abilities to our loved ones, then we offer the best to our ultimate love and that is God.

This means that in our efforts to combat the RH bill, it behooves us that we don't do it sloppily or half-heartedly. St. Peter tells us that we should always be ready to defend our faith. So we study well the theological and scriptural reasons why the Church teaches as it does, we study how we deliver that message, and we exhibit discipline in forwarding that message. It means that we be organized and methodical in our approach, that our arguments arise from deliberate study and research (and not mere religious motherhood statements or illogical appeals to emotions), and that we be very conscious and intelligent in the manner that we deliver and expound on our arguments. It also leads us to proceeding with perseverance, caring not who gets the credit, and that we always act with confidence. There is no reason for us to give up or be insecure for the reason that we believe that God, our Father, is guiding us and caring for us. Finally, it also means that we regularly and with great discipline read the Bible, particularly the New Testament, preferably on a daily basis. As St. Augustine said, "when we read, God talks to us." So we do this, even for short bursts during the day, regularly and with discipline, asking the Lord for the grace to appreciate His words better.

You bet your life

But the best way to fight against the RH bill is to live our faith. One of the interesting things when one reads the early accounts by pagan writers (e.g., Josephus, the Letter to Diognetus, etc.) on the first Christians is how impressed they were on the way the Christians lived their lives. For at that time, the behavior of the early Christians was quite unique: they were quite joyful and treated each other with the utmost charity and love. Joy, the ability to be cheerful even in the face of difficulties, is what truly set the Christian apart. Almost every other passage in the New Testament, from the Gospels to the Epistles to Revelations, encourages us to live our faith with joy. We are talking here not of the psychological joy brought about by hormones or drugs but the supernatural joy that comes – again, you guessed it – from the fact that we are indeed the children of God. We should be cheerful in our daily lives, in the way we treat each other, relate to each other, in how we do our work or study. We should be joyful because that is what it means to be Christian.

The other aspect is that we live the life of charity, that we demonstrate our love, to those who are our friends and to those who are not yet our friends. We should not fight this fight like others do; we should not fight this fight by being like them: we should not resort to hating, to spite, to bitterness, to anger, to pride. Because again all that betrays a fear that should not be present in a Christian who should be filled with the confidence of one who is a child of God. We should fight the good fight as who we are; we should fight the good fight as Christians.

In fact, for practical and historical reasons alone, we should not be quick to judge and dismiss those who do not share our faith, even to those who appear to us to be immoral. Remember St. Augustine. We should lament their state, strive to correct them gently, but never hate. We should also note that the pro-RH people aren’t even trying to kill us (or at least I think so). So think about this and remember St. Paul (who earlier on tried to kill the first Christians and see how that turned out for him). With God's grace anything is possible. And for every ferocious opponent we meet now could be that most staunch and effective ally tomorrow.

So we treat the other side (and each other) with charity, with cheerfulness, love, provide understanding in response to their refusal or inability (so far) to understand the wonderful teachings of our faith. We do this because that is what Christians do.

Defense, our way

William Perkins once wrote, "God does not look at the excellence of the accomplishment but at the heart of the worker." In all the heat and passions involved in the debate relating to the RH bill, we Catholics should take the time to reflect on what it means to live our lives within the Christian faith. The fight against the RH bill has nothing to do with our intelligence, talents, ego, education, or credentials. We give our best but the outcome has nothing to do with winning or losing. The outcome we pray for is that God's will be done. And with that we know we cannot lose. But what this debate does give us is an opportunity to demonstrate to all the others what our faith truly means. The "free thinkers" believe that they know how to lead the sophisticated, creative, vibrant life. They have no idea what they're talking about. We know we have the better way, the "way" taught to us by Jesus. Right is on our side. That should give us the security, confidence, cheerfulness, and charity in dealing with others and with this RH debate. Definitely, as St. Peter tells us, we should always be ready to defend our faith. But with the caveat that St. Peter also provided: such defense must always be done with "respect and gentleness" (1 Pet. 3:15).


Trade with Australia and Philippine safeguards

Apparently, trade between Philippines and Australia rose because of the ASEAN-A/NZ trade agreement (click here for BusinessWorld article). This is according to Ross Bray, "Australia’s senior trade commissioner for the Philippines and Micronesia". Questions are:
- what is the value of the trade between Philippines and Australia;
- what is the extent of Australian imports to the Philippines; and
- isn’t the alleged increase Philippine exports to Australia just a return to normalcy from pre-2009 (i.e., pre-crisis) levels?

Note must be made that the reported 25% usage of Philippine exporters to Australia essentially mirrors the around 20% utilization by Philippine exporters of the AFTA.

The point is, the alleged benefits of the FTA should be further examined. And definitely all the more if a bilateral Philippine-Australia FTA is being proposed.

In other news, the Philippines was identified by the WTO as being a heavy user of safeguard measures (click here for BusinessWorld article). But this is strange when you consider that Philippine imports dropped in 2008, at record levels in 2009, and have been quite unsteady in 2010. This is the most likely period of review for the safeguards investigations. Where could the import surge have come from then? And some "expert" says it’s "legal". The interesting thing here is that neither the DTI nor the FPI deny the considerably high number (or percentage) of safeguard measures identified by the WTO as being either imposed or proceedings instituted by the Philippines. Weird. Either the domestic numbers presented to us by the government or the WTO figures is wrong. So who is giving the correct numbers? Interesting ...

Looks more that politics rather than economics is at work (and, more disturbing, sloppily thought out at that). Interesting that we haven’t received any WTO dispute query or complaint about this.


WTO win on cigarettes

is the subject of my Trade Tripper column in this Friday-Saturday issue of BusinessWorld:

Lost amidst the Manny Pacquiao fight and the marvelously ridiculous twisting of the Pope’s words by the pro-RH group, is the Philippine win at the WTO in case DS371, otherwise known as Thailand -- Customs and Fiscal Measures on Cigarettes from the Philippines. The case was initiated by the Philippines in February 2008, under the able stewardship of then DTI Undersecretary Tom Aquino and Assistant Secretary Tong Buencamino, and that early the case was tagged among international trade lawyers as Thai Cigarettes II (a landmark trade case during the GATT days relating to health measures). The WTO panel released its report on the case last Nov. 15, 2010 (and if you’re interested, you can view a copy of the 426 page report at http://www.wto.org/english/tratop_e/dispu_e/371r_e.pdf).

The case had to do with Thai taxes imposed on imported cigarettes, with Philippine total exports of our cigarettes significantly declining for the two years prior to the filing of the complaint. Notably, Philip Morris Philippines Manufacturing Inc.’s shipments to Thailand have been described as making up to 95% of its total exports, with the alleged cause of the slowdown said to be the Thai measures. As alleged in the Philippine complaint, the Thai government does control a major tobacco company, the Thai Tobacco Monopoly, which "is the only business entity authorized by Thai law to produce cigarettes in Thailand." The main cause of action of the Philippine complaint, therefore, is whether Thailand is violating WTO national treatment provisions.

Or, more accurately, the complaint revolved on whether violations or inconsistencies exist between the Thai measures and various provisions of the Agreement Implementing Article VII of GATT 1994 and the GATT itself. This would cover the areas of customs valuation, excise tax, health tax, TV tax, VAT regime, retail licensing requirements, and import guarantees, along with the national treatment provisions of the WTO.

An interesting aspect of the case is the Philippine allegation that "Thailand requires that tobacco and/or cigarette retailers hold separate licenses to sell domestic and imported cigarettes, respectively." The question, therefore, is how the dual licensing requirement leads to discriminatory treatment against the imported cigarettes and thus a violation of Article III.4 of the GATT.

In the end, the panel did reject Philippine claims under Article X:3(a) of the GATT, as well as Articles 4 and 7.1 of the Customs Valuation Agreement. But the panel did find that the Thais acted inconsistently with the provisions of Articles 1.1, 1.2, 1.2(a), 7.1, 7.3, 10, and 16 of the Customs Valuation Agreement; and Articles III.2 and III.4, as well as X.1, X.3(a), and X.3(b) of the GATT. The panel found also that "Thailand does not maintain or apply a general rule requiring the rejection of the transaction value and the use of the deductive valuation method."

At this point, the Thais have 10 days prior to the DSB meeting at which the panel report is to be considered with which to object to the report. Within 60 days after the date of circulation of a panel report to the members, the report shall be adopted at a DSB meeting unless the Thais (or even the Philippines in relation to the portions of its claim not considered by the panel positively) formally notify the DSB of its decision to appeal. If an appeal is made, it shall be before the Appellate Body, which may then uphold, modify or reverse the legal findings and conclusions of the panel. The appeal shall be limited to issues of law covered in the panel report and legal interpretations developed by the panel.

This is a pretty nice victory for the country, particularly considering that the livelihood of hundreds, if not thousands, of Filipino farmers were at stake. For Filipino lawyers, it also represents the first time that the country won in an international dispute at the State-to-State level (there was previously the ICSID case involving the NAIA3 contract that the Philippines also won as well but that was on a State-to-private company level dispute). Previous to DS371, the Philippines had eight previous cases at the WTO, none of which resulted in a win. So I hope I be permitted in saying that I’m quite happy to at least have a small participation in this case as then legal adviser to the Philippines.

I’ll devote articles in the future to parse through some of the more interesting analysis and findings of the panel. If and when an appeal is made, your friendly Trade Tripper shall report on that as well. For the moment, a win is a win. Although, it would be interesting to see how the other WTO case (DS396 and DS403) turns out, this time involving the EC’s and the US’ complaint that Philippine excise taxes on distilled liquor discriminate against imported whiskey.

Hopefully, the whiskey case is as well managed and argued as the cigarette case was. It would be really interesting to see if a victory drink is forthcoming.


Pope Benedict and the condom question

by Fr. Joel O. Jason, SThL

This article seeks to clarify the perceived confusion and surprise that greeted the whole Catholic as well as non-Catholic world. International as well as local journal headlines read:

“Pope says condoms are justified in fight against HIV”

“Pope says condoms are acceptable in some cases”

“Pope softens on teaching on Condoms, Aids and Contraception”

“Pope: Condom use OK for fight against AIDs”

The whole controversy started from a supposed “leaked” German interview the Pope granted to journalist Peter Seewald in an upcoming book yet to be released entitled “Light of the World: The Pope, The Church and the Signs of the Times”. For the sake of intellectual integrity, let us see what the Pope really said from this excerpt of the transcript of the interview connected with the condom question:

Here is that portion in its entirety:

From Chapter 11, “The Journeys of a Shepherd,” pages 117-119:

Peter Seewald:

On the occasion of your trip to Africa in March 2009, the Vatican’s policy on AIDs once again became the target of media criticism. Twenty-five percent of all AIDs victims around the world today are treated in Catholic facilities. In some countries, such as Lesotho, for example, the statistic is 40 percent. In Africa you stated that the Church’s traditional teaching has proven to be the only sure way to stop the spread of HIV. Critics, including critics from the Church’s own ranks, object that it is madness to forbid a high-risk population to use condoms.

Pope Benedict:

The media coverage completely ignored the rest of the trip to Africa on account of a single statement. Someone had asked me why the Catholic Church adopts an unrealistic and ineffective position on AIDs. At that point, I really felt that I was being provoked, because the Church does more than anyone else. And I stand by that claim. Because she is the only institution that assists people up close and concretely, with prevention, education, help, counsel, and accompaniment And because she is second to none in treating so many AIDs victims, especially children with AIDs.

I had the chance to visit one of these wards and to speak with the patients. That was the real answer: The Church does more than anyone else, because she does not speak from the tribunal of the newspapers, but helps her brothers and sisters where they are actually suffering. In my remarks I was not making a general statement about the condom issue, but merely said, and this is what caused such great offense, that we cannot solve the problem by distributing condoms. Much more needs to be done (emphasis mine)
. We must stand close to the people, we must guide and help them; and we must do this both before and after they contract the disease.

As a matter of fact, you know, people can get condoms when they want them anyway. But this just goes to show that condoms alone do not resolve the question itself (emphasis mine). More needs to happen. Meanwhile, the secular realm itself has developed the so-called ABC Theory: Abstinence-Be Faithful-Condom, where the condom is understood only as a last resort, when the other two points fail to work. This means that the sheer fixation on the condom implies a banalization of sexuality, which, after all, is precisely the dangerous source of the attitude of no longer seeing sexuality as the expression of love, but only a sort of drug that people administer to themselves (Emphasis mine)
. This is why the fight against the banalization of sexuality is also a part of the struggle to ensure that sexuality is treated as a positive value and to enable it to have a positive effect on the whole of man’s being.

There may be a basis in the case of some individuals, as perhaps when a male prostitute
uses a condom, where this can be a first step in the direction of a moralization, a first assumption of responsibility, (The preceding is the only sentence the secular media focused on to reach their conclusions) on the way toward recovering an awareness that not everything is allowed and that one cannot do whatever one wants. But it is not really the way to deal with the evil of HIV infection. That can really lie only in a humanization of sexuality (Emphasis mine).

(The next question and answer was totally ignored by the secular media)

Peter Seewald:

Are you saying, then, that the Catholic Church is actually not opposed in principle to the use of condoms?

Pope Benedict:

She of course does not regard it as a real or moral solution (Emphasis mine)
, but, in this or that case, there can be nonetheless, in the intention of reducing the risk of infection, a first step in a movement toward a different way, a more human way, of living sexuality (Emphasis mine).

So with the full text in question now presented, what conclusions can we derive?

First things first. There is a principle in Biblical interpretation that goes: “A text, out of context, is pretext.”
It means that every text of the Bible should be understood in its integral context: in the unity of the whole message of a chapter, of a series of books, of the theology of the writer, and even the unity of the whole Biblical message. Taken in isolation, a text in the Bible can be reduced to a pretext, i.e., a half-truth or at worst, a misleading misinterpretation.

The headlines we read above, regarding the supposed change Benedict proposes on the
consistent sexual ethics of the Church connected with condoms and HIV, are clear examples of a text taken out of context. As you can see, Pope Benedict gave a long answer to a rather short question. I highlighted the parts that spell out clearly Benedict’s convictions as well as that of the Church’s. What some interpreters took out in isolation was that part where it says, “There may be a basis in the case of some individuals, as perhaps when a male prostitute uses a condom, where this can be a first step in the direction of a moralization, a first assumption of responsibility...”. They did not even finish the whole sentence.

With these laid out, so what now did Pope Benedict NOT say?

1. First of all, this is a personal interview. Pope Benedict is not speaking here in his capacity as the Supreme Teacher of the Catholic faith. What you find in the book is not proposed as official teaching nor pronouncement being sent out to the Catholic faithful. Some of the things we can read here can even fall in the category of personal opinions and therefore do not and cannot present themselves as official Magisterial teachings. If the Pope wants to hold out a new teaching based on his reasoned discernment as the
Successor of Peter, a personal interview is not the place to do it. Everyone who knows basic Catechism understands this, much more the Pope. And so headlines claiming, “Pope changes teaching on Condoms, Contraception and HIV”, or “Pope: Condoms OK in fight Against AIDS” are totally way out of line.
2. Nowhere in the text of Pope Benedict’s response can we find a summary justification of the morality of condom use. This is clear in the texts I highlighted. Let me highlight them once again: “...that we cannot solve the problem by distributing condoms. Much more needs to be done,” ; “...But this just goes to show that condoms alone do not resolve
the question itself” ; “ This means that the sheer fixation on the condom implies a banalization of sexuality, which, after all, is precisely the dangerous source of the attitude of no longer seeing sexuality as the expression of love, but only a sort of drug that people administer to themselves”; “...But it is not really the way to deal with the evil of HIV infection. That can really lie only in a humanization of sexuality.”

I don’t see how the quotes above translate to “Pope OKs Condom Use”. On the contrary, the above quotations reflect the consistent conviction of the Church regarding condom use vis a vis HIV/AIDs: that condoms are not the solution. If at all, they contribute to the perpetuation of the problem. Condoms can only reduce the risk of infection. And with the fatally serious threat of HIV/AIDs, risk reduction is not acceptable. Prevention is the only acceptable option. And prevention is only served by abstinence (for the unmarried) and monogamy and fidelity (for the married).

In the first place, Pope Benedict’s response was not even a direct commentary on the possible moral justification of condom use, clearly not for contraception. He was making a moral speculation on what may be going on in the heart of one (a male prostitute) who uses the condom in a homosexual or heterosexual sex act.

What did Pope Benedict intend to say?

Pope Benedict was specific in his response. He spoke of a “male prostitute” who uses a condom. What the Pope stressed was not that condom use is OK in the case of a male prostitute engaged in heterosexual or homosexual acts. He merely said that “this can be a first step in the direction of a moralization, a first assumption of responsibility...” Perhaps an analogy can help us appreciate what the Pope is saying (for this point I will modify a principle I picked up from lay moral theologian Janet Smith).

There are two robbers. One uses a real knife with a real intent to kill and harm. The other uses a plastic knife because he has no real intention of killing. He only intends to frighten and intimidate. Both men will be committing an evil act. But obviously, between the two, it is the one who employs a toy knife that shows at least a hint, a semblance, a little amount of moral responsibility which hopefully, can still mature to a real and correct kind of moral responsibility that will let him realize that robbing people is an evil option to take. Does this mean the Church will teach that it is “OK” and moral to rob people using a fake knife? No. The Church simply says that between the two, the one with the fake knife is the one that manifests a semblance of an “assumption of responsibility”, immature it may be.

The same logic can be applied to Pope Benedict’s example. Obviously, the mere fact that the person used a condom indicates a “semblance of responsibility.” One who engages in prostituted sex without a condom, shows a total absence of moral responsibility, for himself or for the other. Compared to this one, one who uses a condom at least shows a hint of “assuming a responsibility” which Benedict hopes can be a “first step in the direction of a moralization” i.e., hopefully it can develop to a more correct kind of responsibility, not in the direction of regular condom use, as secular interpreters assumed, but, as Benedict finished his sentence, (which the secular media left out), “on the way toward recovering an awareness that not everything is allowed and that one cannot do whatever one wants. But it is not really the way to deal with the evil of HIV infection. That can really lie only in a humanization of sexuality.”

As we see here, Pope Benedict is too deep a theologian and a thinker to be presented from a shallow and surface level interpretation. The Pope and the Church’s consistent ethical teachings deserve more than that. We pray that the media may also assume responsibility in reporting matters related to faith and morals. We pray that intellectual integrity and professionalism may not be sacrificed for the sake of ideology, sensationalism and paper sales.

(Fr Joel is a diocesan priest of the Archdiocese of Manila. He is currently Dean of Studies at San Carlos Seminary in Guadalupe Makati and teaches Fundamental Moral Theology, Sexuality and Integrity and Bioethics. He also heads the Commission on Family and Life of the Archdiocese of Manila)