Republic of the Philippines
HOUSE OF REPRESENTATIVES

Quezon City j 28 yl 2010
FIFTEENTH CONGRESS t S96 fy

First Regular Session Y flats
1892

HOUSE BILL NO.

Introduced by Rep. KARLO A. B. NOGRALES.

EXPLANATORY NOTE

Globalization has re-shaped the world economy in a manner that is so
expansive rendering national boundaries useless. It is the objective of each nation to
penetrate other countries’ markets and optimize the benefits from world trade. The
Philippines is laggard in terms of economic growth. Investments are much less than
what our neighbors generate.

Over the years, the Philippines has entered into 37 Bilatural Investment

Promotion and Protection Agreements, 38 Bilateral Agreemems end other
multilateral and regional trade agreements while other agreements a°e still in the
process of negotiations. The combined impact of all agreements is yet to be
appreciated as there is no singular entity principally responsible for monitoring and
more importantly maintaining a cohesive and coherent trade policy vis-4-vis our
national interest. With the potential increase in the number of trade negotiations, it is
imperative that the Philippines is equipped with the necessary resources and
capability to engage in all trade discussions. More importantly, it is necessary that
there is one institution that effectively formulates and carries out the country's trade
policies in order for us to efficiently promote our own products and protect our own
‘economy and domestic market from unfair trade practices. Our country cannot afford
to have loose, divergent and incoherent policy in addressing the demands of
international trade.

To establish coherence, greater predictability, accountability and transparency
in trade and investment policy making, it is imperative to establish a specialized and
dedicated agency and officers that will

- Formulate domestic and national priorities

- Come up with final trade positions

- Be responsible for all trade negotiations

- Coordinate with other branches of government in order to come up with a

whole, cohesive cross-industry trade strategy in accordance to our
country's development goals, and

- Authoritatively represent the country in all agreements it wish to enter.

Immediate passage of this bill is therefore earnestly sought.

RLO A. B. NOGRALES


Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City

FIFTEENTH CONGRESS
First Regular Session

HOUSE BILL NO 1892

Introduced by Rep. KARLO A. B. NOGRALES

AN ACT

CREATING THE PHILIPPINE TRADE REPRESENTATIVE OFFICE,
APPROPRIATING FUNDS THEREFOR AND FOR OTHER PURPOSES

Be it enacted by the Senate and House of Representatives of the Philippines in
Congress assembled:

SECTION 1. Title. - This Act shall be known as the “Charter of the Philippine
Trade Representative Office."

SEC. 2. Declaration of Policy. - \t is hereby declared the policy of the State to
pursue a trade policy that serves the general welfare, creates jobs, ensures food
security and rural and industrial development, among others and utilizes all forms and
arrangements of exchange on the basis of fair trade Market access in itself is not the
end goal of trade negotiations.

It is also the declared policy of the State to ensure the right of the people and their
organizations to be duly informed on matters of public concern and the right to
effectively and reasonably participate in economic decision making.

Congress has the power to regulate commerce, including commerce with foreign

nations, and has the power to re-organize the bureaucracy in order to make it more
responsive to the needs of alll the stakeholders in the Philippine economy and the
exigencies of international economic relations. Any international economic, commercial,
or trade agreement entered into by the Government constitutes regulation of commerce

and will affect the different stakeholders in our economy. Hence, it is essential that any


agreement is harmonized with our existing domestic commercial laws and our
constitution.

Moreover, Congress, as one of the three (3) political branches of the Government,
has power over foreign relations, especially international economic relations.

For this purpose, and pursuant to the power of Congress to regulate commerce,
the State shall ensure that a single office shall, with competence and accountability,
direct, formulate, and coordinate government agencies towards formulating cohesive
policies, positions and measures, and conduct regular stakeholders consultations with
respect to international trade and investment relations and negotiations

SEC. 3. Definition of Terms. -

a) “Ambassador” refers to a diplomatic official accredited to a foreign sovereign or
government, or to an international organization, to serve as the official representative of
his or her own country. In everyday usage it applies to the ranking plenipotentiary
minister stationed in a foreign capital. The host country typically allows the ambassador

control of specific territory called an embassy, whose territory, staff, and even vehicles
are generally afforded diplomatic immunity from most laws of the host country;

b) "Civil Society” refers to the totality of voluntary civic and social organizations and
institutions that form the basis of a functioning society as opposed to the formal
institutions and structures of a state;

c) Commerce” refers to the entire range of activities connected with the
production, manufacturing, accumulation, gathering, mining, raising, harvesting,
exchange or buying and selling of something of economic value such as agricultural
products, minerals, goods, services, information, debt instruments, shares of stock or
equity, derivatives, and money. It also includes capital formation, either through debt or
equity; savings; and investments. Finally, it likewise includes the obligations, rights, and
duties of all economic entities such as natural persons, corporations, partnerships, and
governmental entities;

d) “Consultation mechanism” refers to the means by which stakeholders and
sectors could participate effectively and meaningfully in the governmental process of


drawing up our international trade policy, and in coming up with all other policies and
rules affecting all aspects of international trade;

e) "Fair trade” refers to a trading partnership, based on dialogue, transparency and
respect, that seeks greater equity in international trade. It contributes to sustainable
development by offering better trading conditions to, and securing the marginalized
producers and workers;

f) “Investment” refers to the act of putting money to a business, either by directly
buying or leasing assets, hiring personnel, and entering into a whole gamut of contracts
needed to run an on going concern, or by buying equity in a business — typically in the
form of shares of stock;

g) “Legal’ refers to the characterization of an act that is not contrary to Philippine
laws, including international commercial agreements to which the Philippines is a party,
and the accession of the parties to a trade and/or investment agreement;

h) “Multisectoral” refers to a grouping of different sectors of the economy;

i) ‘Non-Government organizations” refer to non-stock, non-profit corporations
organized under the laws of the Republic of the Philippines doing charitable,
educational, religious, social, economic, and other not-for-profit endeavors;

}) ‘Private sector” refers to that sector of the economy that is owned by or is
composed of private individuals, including natural persons doing business in their
personal capacities;

k) "Research" refers to the study of the potential or actual economic implications of
a proposed or existing trade agreement and the validation of its findings among the
stakeholders;

!) Sectors refer to the different economic or commercial groups composed of
members with substantially common commercial interest, including business, labor,
peasants, farmers, fisherfolk, consumers, private sector, public sector, service sector,

and manufacturing sector;
m) “Stakeholders” refer to persons or groups of persons with legitimate interest in

commerce or whose economic well-being will be affected by any government policy or
law affecting commerce — either as factors in the production, sale, or distribution of

goods and services, or as consumers or beneficiaries thereof,


n) “Trade” refers to the voluntary exchange of goods, services and all things of
economic value, whether or not across national borders;

0)"Trade and investment agreement or International trade and investment
agreement" refers to an accord whereby two or more countries bind themselves to a set
of rules that govern the commercial and investment transactions of persons originating
from any of the parties to the agreement. When it is just between two countries, it is
called a Bilateral Agreement. On the other hand, if it involves more than two countries,
then it is called a Multilateral Agreement. Regional Agreements are those among
countries within the same geographical area as contemplated by the agreement,
Plurilateral Agreements are specialized agreements included in a multilateral
agreement, and where the parties have the option of acceding; and

p) “Trade dispute" refers to a disagreement between two or more countries to a
trade agreement that arises when at least one country adopts a trade policy measure or
takes some action that one or more fellow members consider to be a breach of the
agreement, or a failure to live up to obligations under the agreement.

SEC. 4. Creation. — There is hereby created the Philippine Trade Representative
Office, hereinafter referred to as the “Trade Office”, that shall be attached to the Office
of the President.

The Trade Office shall be headed by the Philippine Trade Representative who
shall be appointed by the President and confirmed by the Commission on
Appointments. He/she shall hold a Cabinet rank with a fixed term of six (6) years.

Further, the Trade Office shall have three (3) Deputy Philippine Trade
Representatives who shall be appointed by the President upon the’ endorsement of
various stakeholders and shall have the rank of Senior Undersecretary.

The Deputies shall have a term of six (6) years each and can be re-appointed for
No more than a second term. Of those first appointed under this Act, one deputy shall
serve for six (6) years, another deputy for four (4) years and another deputy for two (2)
years.

SEC. 5. Qualifications and Limitations on Appointments. —

a) Qualifications. - The Philippine Trade Representative and Deputy Trade
Representatives must be natural-born citizens of the Philippines, and must be at least



forty (40) and thirty-five (35) years of age, respectively, of good moral character,
unquestionable integrity, and known probity and patriotism, and should possess the
academic training, experience, and competence in business, economics, international
trade law and policy or trade negotiations.

The Philippine Trade Representative and Deputy Trade Representatives shall not,
during their tenure in office, engage in the practice of any profession, or intervene
directly or indirectly in the management or control of any private enterprise which may,
in any way, be affected by the functions of their office, nor shall they be financially
interested, whether directly or indirectly, in any contract with the Government, or in any
franchise, or special privilege granted by the Government or any subdivision, agency or
instrumentality thereof, including government-owned or controlled corporations or their
subsidiaries. They shall strictly avoid conflicts of interest in the conduct of their office.

b) Limitations on Appointments; Disqualifications. — No person shall be appointed
Philippine Trade Representative or Deputy Trade Representative if he/she has directly
represented, aided, or advised a foreign entity in any trade and/or investment
negotiation or trade dispute against the Philippines.

Likewise, the Philippine Trade Representative, Deputy Trade Representatives, and
all members of the research and legal staff of the Office of the Philippine Trade
Representative shall not be allowed to be employed, commissioned, or retained by
foreign entities, or to do any kind of consultancy or related work for foreign clients on
trade and investment issues within two (2) years after the expiration or termination of
their service with the Office of the Philippine Trade Representative. They shall likewise
maintain at all times the confidentiality of all matters that they have handled during their
service with the Office of the Philippine Trade Representative.

SEC. 6. Functions and Responsibilities of the Philippine Trade Representative
Office. — The Philippine Trade Representative Office shall:

a) Negotiate trade and investment agreements on the basis of the Philippine
Constitution and other laws;

b) Coordinate with different line agencies of government in formulating harmonized
and coherent Philippine trade and investments policies based on a_ national


development agenda that is a product of regular and meaningful consultation with
stakeholders ;

c) Advise the President and Congress on international trade and investments
policies and their implications on the domestic economy and the impact of domestic
policies on international trade and investments commitments.;

d) Report to Congress and to the Multi-Sectoral Advisory Committee as herein
created any intention to negotiate any economic treaty, be it bilateral, regional or
multilateral, At the minimum, the report shall contain the subject matter for negotiations
and the general objectives of the Government. The Office shall update Congress and
the Multi-Sectoral Advisory Committee on the negotiations, including the offers and
counter-offers of all the parties. The Office shall also notify Congress and the Multi-
Sectoral Advisory Committee of any tentative or final agreement of the parties;

) Coordinate with departments and agencies on basic issues of policy and
interpretation arising in the exercise of international trade and investments functions
including, but not limited to the World Trade Organization, regional, bilateral and
plurilateral negotiations to the extent necessary to assure the coordination of
international trade and investment policy and its consistency with any other law;

f) Conduct research and legal studies related to trade and investments that will
enhance trade policy formulation;

g) Obtain, collate and maintain a database that shall include, but not be limited to,
trade and investments statistics, trade and investment -related laws, policies, trade and
investments agreements, and initiatives which have implications on the development of
the Philippine negotiating position in trade and investment agreements, and which shall
be accessible to the stakeholders;

h) Conduct or facilitate the conduct of trainings and courses for the benefit of the
technical staff of the Office and other government personnel directly or indirectly
engaged in trade and investment policy work in order to build, improve and enhance
their capacity and competence in trade and investments negotiations;

i) Report directly to the President, Congress and the Multi-Sectoral Advisory
Committee regarding the implementation, operation and effectiveness of any trade and


investments agreement entered into including the status of on-going trade and
investment negotiations, in which the Philippines participates;

j) Undertake consultations with stakeholders in all aspects of trade policy
formulation and negotiation. Stakeholders must also be directly involved in formulating
positions related to trade and investment negotiations in line with the national
development agenda;

k) Subject to Civil Service Commission rules, elect, appoint, employ and fix the
compensation in accordance with the existing compensation laws of such officers and
employees as are necessary and prescribe their authority and duties;

|) Promulgate such rules and regulations as may be necessary to carry out the
functions, powers and duties vested herein;

m) Enter into and perform such contracts, leases, cooperative agreements, or
other transactions as may be necessary in the conduct of the work of the Office and on
such terms as the Philippine Trade Representative may deem appropriate with any
agency or instrumentality of the Philippine government or with any public or private
person, firm, association, corporation or institution;

n) Provide the necessary staff support for the Multi-Sectoral and Sub-sectoral
Advisory Committee and the Inter-Agency Coordinating Committee; and

0) Adopt an official seal.

SEC. 7. Functions of the Philippine Trade Representative. - The Philippine Trade
Representative shall:

a) Serve as the chief trade negotiator of the Philippines in international trade and
investment agreements, including, but not limited to, the World Trade Organization,
regional, bilateral and plurilateral negotiations, in which the Philippines participates, and
shall be responsible for the conduct of such;

b) Head the Philippine Trade Representative Office and exercise control and
supervision over all its functions and activities and including its organization;

¢) Participate in economic summits and other international meetings at which
international trade and investment are major topics;

d) Chair the Inter-agency Coordinating Committee on international trade and

investments ;


e) Co-chair the multisectoral advisory committee in their regular and special
meetings; and

f) Report at least twice a year and as needed to Congress and Multi-Sectoral
Advisory Committee on the developments of any international trade and investments
negotiations and/or agreements.

SEC. 8. Functions and Responsibilities of Deputy Trade Representatives. — The
Deputy Trade Representatives shall:

a) Lead the negotiations for their respective sectors and/or areas of concern;

b) Convene and chair the Sub-Sectoral Advisory Committees and the Inter-Agency
Coordinating Sub-Committee for their respective sectors and/or areas of concern;

c) Ensure proper coordination among the various government agencies involved in
their specific sectors of concern, and harmonize conflicting negotiating positions;

d) Prepare sector-specific proposals and negotiating positions and strategies; and

e) Perform all other functions as may be delegated by the Philippine Trade
Representative, or as may be required by the nature or exigencies of their foregoing
functions and responsibilities.

SEC. 9. Inter-Agency Coordinating Committee and Sub-Committees. - In
connection with the performance of his/her functions, the Philippine Trade
Representative shall, to the extent necessary for the proper administration and
execution of the trade and investment agreements of the Philippines, draw upon the
expertise of, and consult with national agencies.

The Philippine Trade Representative shall consult with concerned agencies and
any other agency on trade and investment policy issues, without prejudice to the
exercise by the Bangko Sentral ng Pilipinas of its authority as an independent central
monetary authority under the Constitution and Republic Act No. 7653 or the New
Central Bank Act. All agencies consulted by the Philippine Trade Representative shall
participate actively, cooperate fully, and promptly provide to the Philippine Trade
Representative all documents and information requested.

Further, there is hereby created Inter-Agency Sub-Committees to provide inputs

and support to the Deputy Trade Representatives.


SEC. 10. The Multi-sectoral Advisory Committee. — The Philippine Trade
Representative shall seek information and advice from representatives of the private
sector, non-government organizations and members of Congress working on trade and
investment policy based on a national development agenda aimed at balancing the
interests of various stakeholders with respect to:

a) negotiating objectives and bargaining positions before entering into a trade and
investment agreement;

b) the operation, implementation, and monitoring of any trade and investment
agreement once entered into ;

©) trade remedies, dispute settlements, non-compliance and/or violations to any
trade and investment agreement; and

d) other matters arising in connection with the development, implementation and
administration of the trade and investment policy.

On the other hand, the Multi-Sectoral Advisory Committee shall:

a) provide the Philippine Trade Representative overall policy advice on trade
matters;

b) prior to any trade negotiation, be an active participant in the development of the
negotiation objectives and bargaining positions of the country;

c) at the conclusion of negotiations for each trade agreement entered into, provide
a report to the President and Congress. The report of the Committee shall include an
assessment and evaluation of whether and to what extent the agreement promotes the
economic interest of the Philippines and achieves the applicable overall and principal
negotiating objectives set forth; and

d) be allowed to accompany the Philippine delegation in trade and investment
negotiation missions in an observer capacity.

The Committee will meet as needed at the call of the Committee Chairman or the
Philippine Trade Representative depending on various factors such as the level of
activity of trade negotiations.

Further, there is hereby created Sub-Sectoral Advisory Committees, to be defined
by the Philippine Trade Representative for trade and investment policy formulation and
negotiations. These Committees shall be broadly representative of the key sectors and

9


groups of the economy, particularly with respect to those sectors and groups which are
affected by trade and shall consist of representatives of industry, academe, agriculture,
fisheries, labor, small business, service industries, retailers, consumer interest and
other stakeholder groups. Members from both Houses of Congress who are Chairs and
Vice-Chairs of the relevant Committees in Congress shall have the option to join the
Sub-Sectoral Advisory Committees during the conduct of consultations and in the
course of the Trade Representative's reportorial duties.

Members of the Committee and Sub-committees shall be appointed by the
Philippine Trade Representative upon the endorsement of various non-government
organizations and stakeholders. Members of the committee shall serve without either
compensation or reimbursement of expenses.

The Chairman of the Committee and Sub-Committees shall be elected by its

members.

SEC. 11 Joint Congressional Oversight Committee on Trade and Investment
Matters. - There shall be a Joint Congressional Oversight Committee on Trade and
Investment Matters to which the Philippine Trade Representative Office shall seek a
priori negotiating mandate, parameters and authority with respect to trade and
investment agreements. The oversight committee shall be composed of the
Chairpersons of the Committees on Trade and Industry, Agriculture, Foreign Affairs,
Economic Affairs, Labor, Environment and Natural Resources and Special Committee
‘on Globalization of both Houses of Congress.

The Oversight Committee shall conduct a periodic review and evaluation of the
performance of the Philippine Trade Representative Office, including its officials, every
three (3) years. An independent pane! composed of experts to be appointed by the
Committee shall review the activities and performance of the Philippine Trade
Representative Office and shall make recommendations, based on its findings, to the
Congressional Oversight Committee. The independent panel of evaluators shall likewise
conduct consultations with stakeholders in the conduct of the review

SEC. 12. Trade Research Services, Data Collection, Analysis and
Dissemination. — The Office shall improve and strengthen its capacity on research, data


collection, analysis, and dissemination of trade and investments statistics, laws and
policies, agreements and other related information.

The trade and investment research under the Office of the Philippine Trade
Representative shall have the following specific functions and responsibilities:

a) Generate, maintain, and update records/files of comprehensive national and
international trade statistic, tariff and non-tariff measures, and investment-related data;

b) Conduct sectoral and macrolevel impact assessment and/or potential effects of
the country’s trade negotiating positions or an eventual trade agreement and validate
such studies;

¢) Provide the general public access to trade data and information and other
relevant documents through online databases, journals, publications, etc.

d) Collaborate with government and non-government research institutions in
research concerning trade and investments policies and programs in relation to the
national development program;

e) Tap the foreign trade service corps to get market intelligence information with
regard to commercial, industrial and general economic conditions, as well as non-
economic conditions, affecting Philippine products both in the export and domestic
markets; and

f) Perform other functions as may be provided by law or assigned by the Trade
Representative or Deputy Trade Representative.

SEC. 13. Legal Services and Programme. — The Office shall have a Legal
Services arm with the following functions:

a) Provide legal advice to the Office of the Philippine Trade Representative,
including legal advice on trade and investment negotiations;

b) Interpret laws and rules affecting the operation of the Office;

c) Prepare contracts and instruments to which the Office is a party, and interpret
provisions of contracts covering work performed for the Office by private entities;

d) Assist in the promulgation of rules governing the activities of the Office;

e) Prepare comments on proposed legislation concerning the Office;


f) Assist the Solicitor General in suits involving the Office or its officers or
employees, or act as their principal counsel in all actions taken in their official capacity
before judicial or administrative bodies;

g) Assist the Office in ensuring compliance by the Republic of the Philippines with
its obligations in the World Trade Organization agreements, other multilateral trade,
regional, plurilateral and bilateral trade and investment agreements;

h) Represent the Republic of the Philippines in any dispute settlement before the
World Trade Organization, other multilateral trade agreements, bilateral trade
agreements, or in any other suit involving international trade; and

i) Perform such other functions as may be directed by the Philippine Trade
Representative Office.

SEC. 14 Penalties for Withholding Information, Non-Consuttation. — The
failure of the Philippine Trade Representative or any other officer of the Office of the
Philippine Trade Representative to provide information to Congress, as well as failure to
hold meaningful consultations, as provided for under this Act, shall be punishable by
imprisonment of not less than six (6) months to not more than six (6) years, and a fine of

not more than P 50,000.
SEC. 15, Transfer of Functions. — The functions of the Bureau of

International Trade Relations under the Department of Trade and Industry, Attaches
and Permanent Mission to the WTO, ASEAN and UNIO, and the negotiating functions
of the Tariff and Related Matters Committee (TRMC) are hereby transferred to the
Office of the Philippine Trade Representative.
The foregoing transfer of powers and functions shall include all applicable funds
and appropriations, records, equipment, property, and personnel as may be necessary.
SEC. 16. Transitory Provision. - The Tariff and Related Matters Committee

(TRMC) created by Sec. 6 of Executive Order No. 230, series of 1987, together with
the Technical Committee on WTO Matters shall continue to function for six (6) months
or until the Office of the Philippine Trade Representative is set up whichever comes

earlier, after which they shall cease to function.


SEC. 17. Implementing Rules and Regulations. — Within ninety (90) days of
the effectivity of this Act, the President shall appoint the Philippine Trade
Representative, who shall in consultation with the Departments of Trade and Industry,
Agriculture, Foreign Affairs and the National Economic Development Authority, issue
the necessary rules and regulations to implement the provisions of this Act.

SEC. 18 Appropriations. ~ The amount necessary to implement the
provisions of this Act shall be charged against the current year’s appropriations of the
Bureau of International Trade Relations under the Department of Trade and Industry,
attaches and permanent mission to the WTO, ASEAN and UNIO, the Tariff and Related
Matters Committee, and other concerned agencies. Thereafter, such sums as may be
necessary for its continued implementation shall be included in the annual General
Appropriations Act

SEC. 19. Separability Clause. — If any section or provision of this Act shall be
declared unconstitutional or invalid, the other sections or provisions not affected thereby
shall continue to be in full force and effect.

SEC. 20. Repealing Clause. — Laws, rules and regulations and other
issuances inconsistent with the provisions of this Act, including Sec. 6 of Executive
Order 230 series of 1987 and relevant provisions of Executive Order No. 133 series of
1987 are deemed modified, revoked or repealed accordingly

SEC. 21. Effectivity Clause. — This Act shall take effect fifteen (15) days
following its publication in two (2) newspapers of general circulation or in the Official
Gazette, whichever comes earlier,

Approved,