The ASEAN Crisis, Part 2: Why Can’t ASEAN Agree on the South China Sea?

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The ASEAN Crisis, Part 2: Why Can’t ASEAN Agree on the South China Sea?

How internal and external factors hamstring ASEAN when it comes to the South China Sea.

The ASEAN Crisis, Part 2: Why Can’t ASEAN Agree on the South China Sea?
Credit: U.S. Navy photo by Mass Communication Specialist 2nd Class Declan Barnes/Released

Part 1 of this three-part series argued that the South China Sea Dispute poses an existential threat to ASEAN as a regional organization. The South China Sea Dispute challenges ASEAN’s ability to deal with regional militarization, guarantee member states’ economic benefits, ensure ASEAN citizens’ safety when fishing, and protect Southeast Asia’s marine environment. Part 2, as follows, considers the question of why ASEAN has failed to mediate the South China Sea dispute.

While analysts around the world have criticized ASEAN’s disunity in the confrontation with China, most fail to pay attention to the greater picture of ASEAN crisis as a regional organization. The South China Sea disputes reveal a more basic dilemma, between further integration and preservation of national sovereignty. As such, ASEAN’s failure is not simply the result of Chinese efforts to divide ASEAN members. Multiple factors coexisting at three levels – the state level, international level, and organizational level – simultaneously play a role in hindering ASEAN unity.

State Level Factors

Because ASEAN is an intergovernmental organization, the most enduring problem lies at the state level. That is each and every member state of ASEAN pursues its own national interests and is reluctant to delegate sovereignty to ASEAN’s decision-making mechanism. Because of historical inter-state conflicts between ASEAN members, the existing diversity in political, economic, and social contexts, as well as variations in their cooperation with China, ASEAN states are unwilling to commit to a united position toward China.

Each country has their own interests in the South China Sea. One important point is that the status of the sovereignty of the Paracel and Spratly Islands has never been clear since the dispute first emerged many decades ago. Several ASEAN members have overlapping claims to the islands in the South China Sea, making the conflict intractable. Since 1970, the Philippines has claimed the western portion of the Spratly Islands. After China, Vietnam has the most ambitious claim over all the Spratly and Paracel Islands. Even though Malaysia has been maintaining a low-profile position in the conflict, the country has also occupied a number of features since the 1980s. Brunei, meanwhile, claims rights over the islands lying within their Exclusive Economic Zone (EEZ) as defined by UNCLOS.

There are a number of reasons for countries to compete in the South China Sea. Apart from symbolizing territorial integrity, the Paracels and the Spratlys are reported to have significant hydrocarbon reserves and other natural resources around them. Furthermore, the South China Sea is a key transportation route, particularly for energy imports, and carries strategic importance. Control over the South China Sea equals control over the sea lines of communications for trade, oil shipment, and fisheries. Therefore, it is difficult to come up with a proper resolution satisfying all parties even just among ASEAN members, much less all the ASEAN members and China.

ASEAN member states also have varying levels of partnership with China. While China has always been on the list of the five most important trading partners for ASEAN members, the extent of their reliance on Chinese products and the Chinese market varies from country to country. The current trend is that only better-off ASEAN members have managed to attain a diverse group of trading partners and have trade surpluses with China. The other, less wealthy countries suffer from heavy dependence on Chinese goods and a growing trade deficit with China. Especially since the ASEAN-China Free Trade Area (ACFTA) came into effect in 2010, the level of dependence on trade with China has surged. In 2013, ASEAN’s total trade value with China ran a $45 billion deficit, which is attributable to ACFTA according to research by the Australian Defense College. The extent of economic cooperation between China and each ASEAN country is good indication, though not a perfect one, of political support for China.

Cambodia relies too much on China economically and chose to stay out of the South China Sea conflict. Laos is another typical example of how economic overdependence on China is translated into a political position concerning the South China Sea dispute. The Laos-China trading relationship can be best described as raw materials-for-goods exchange. 76 percent of Laos’ exports in 2011 were raw materials such as metals, minerals, and wood and Chinese manufactured products accounted for about 37 percent of Laos’ total heavy manufacturing imports. As Laos is a low-income country and has no access to the sea, Laos choose to support China in the South China Sea dispute.

Other ASEAN members vary in their reliance on China, but all must take the economic giant’s concerns into consideration. Indonesia and Myanmar export a considerable amount of fuels and minerals to China. These two countries have their own internal problems and rely on China as an important lender and therefore cannot play an active role in mediating the conflict. Thailand and Malaysia had positive trade values with China in 2013 and thus were reluctant to show their opposition to Chinese aggression. As oil prices went down in 2014 and China eagerly invested in Brunei, the Brunei sultanate opted for a low-profile position and supported China’s interests in Southeast Asia. The proof is that Brunei blew up the ASEAN consensus by not showing up to the first ASEAN Claimants Working Group in 2014, hosted by the Philippines to forge consensus among the claimant states. Just one month before, Brunei also refused to join in a side meeting with three other claimant states at the ASEAN Foreign Ministers Retreat in Myanmar.

Because of its active economic cooperation with China, Singapore has been maintaining a neutral role in the South China Sea dispute. On one hand, Singapore is a substantial investor and an important partner for critical infrastructure projects in China such as the Sino-Singapore Tianjin eco-city project, Datansha Island, and the Sino-Singapore Guangzhou Knowledge City. On the other hand, China is Singapore’s second-largest export and largest import partner. Singapore’s organic interdependence with the Chinese market has prevented the city-state from encouraging a meaningful resolution to the conflict.

Even the Philippines, the strongest opponent against China’s claims under former President Benigo Aquino, has chosen to open to Chinese investment for expensive infrastructure projects under President Rodrigo Duterte. Economic rationale underpins the so-called Philippine pivot to China.

What about the other major ASEAN claimant, Vietnam? China been the largest trading partner for Vietnam since 2004. In 2014, despite the conflict in South China Sea, the trade value between two countries still increased; net imports and net exports were up 16.8 percent and 12.6 percent respectively. In 2014, almost 30 percent of Vietnam imports came from China. Therefore, despite its disputes with China, Vietnam could not afford to fully cooperate with the United States and the Philippines to balance China.

As can be seen, varying degrees of economic cooperation between China and ASEAN members directly affects their reaction to the South China Sea dispute. That in turn prevents ASEAN as a whole from coming to a consensus.

The International Level

The major powers also play a role in preventing a united ASEAN. China puts economic and political pressure on her allies, who are at the same time ASEAN member states, and the United States, while actively assisting the armament of ASEAN member states, hesitates to lead the opposition against China.

The China factor

Undoubtedly, there is a clash of interests between China and ASEAN: China prefers bilateral negotiations to resolve the South China Sea disputers whereas ASEAN prefers multilateral talks. However, if ASEAN submits to the Chinese demand to deal with the South China Sea dispute on bilateral basis, ASEAN automatically loses its legitimacy as a regional organization. Addressing the dispute on a multilateral basis is important for ASEAN to show its centrality as a leading role player in the region.

There are two possible explanations for China’s insistence on bilateral negotiations. First of all, because China is superior to ASEAN countries in all measures (economy, population, military, political influence), bilateral talks give China a huge advantage over any individual ASEAN state. That makes it easier for China to play the carrots and sticks game, to threaten or give incentives to individual states to submit to China’s will. In short, in bilateral negotiations, China can almost guarantee an absolute winning position.

The second explanation is that China suspects the United States of standing behind the design of the code of conduct, with an eye toward interfering and manipulating the code of conduct in the South China Sea for Washington’s benefit. China has always been conscious about U.S. involvement in the South China Sea dispute and support from other disputants, such as Vietnam and the Philippines, for the U.S. presence in the region, which is against China’s national interests in achieving hegemony in the region.

Because of China’s persistent unwillingness to cooperate, ASEAN claimant countries have started to draw a dangerous assumption about the unlikelihood of resolving the South China Sea dispute through peaceful negotiations. This suspicion is nicely expressed in a Philippine government statement  submitted to the Arbitration Tribunal in 2013: “Over the past 17 years of such exchanges of views, all possibilities of a negotiated settlement have been explored and exhausted.”

The U.S. Factor

Chinese aggression in the South China Sea concerns the United States, which fears the rise of China will come at the cost of U.S. influence in Asia-Pacific. As a result, the United States has persistently protested to defend freedom of navigation by conducting regular joint patrols with Japan and the Philippines and increasing financial support for ASEAN claimants. Nevertheless, confidence in the U.S. commitment to Asia-Pacific stability has gradually dwindled as Washington shows no determination in stopping China from continuing illegal conduct in the South China Sea. Some argue that the United States hesitates to give a strong response due to the fear of interrupting the U.S.-China bilateral relationship, especially economic ties. Others assert that the United States cannot act as a “policeman” guarding international law in the South China Sea dispute simply because the U.S. is not a party to UNCLOS.

In short, the current stagnation in the resolution of the South China Sea dispute is in part the continuation of the historical power game between the United States and others in the region. As long as different ASEAN members have diverging cooperation with the two great powers, it will be difficult to reach an agreement on the South China Sea dispute.

The Organizational Level

Unfortunately, there has been no leadership inside ASEAN. Thus, in times of crises like the South China Sea dispute, there is no leader to direct ASEAN member states toward a united position. Additionally, the facts that the organization’s capacity in all measures (economic development, political power, population) is considerably weaker in comparison with China and that China is ASEAN’s key trading partner are also fundamental reasons why ASEAN has failed to deal with the South China Sea dispute.

Apart from absence of leadership and disadvantaged capabilities, ASEAN also has inherent problems with its decision-making mechanism and organizational framework. ASEAN functions strictly within the mandate of ASEAN Charter, which demands “respecting the fundamental importance of amity and cooperation, and the principles of sovereignty, equality, territorial integrity, non-interference, consensus and unity in diversity.” Accordingly, the decision-making mechanism of ASEAN is based on consultation and consensus, which in fact often prevents ASEAN members from reaching an agreement. Examples of ASEAN inability to find a common voice can be found in the failure to produce a final joint communiqué after ASEAN meetings in 2012 and in 2016.

Another important point is that ASEAN follows a conflict management model. That means the organization emphasizes conflict management rather than conflict resolution. The ASEAN framework of operation as a security organization is coded in the Treaty of Amity and Cooperation in Southeast Asia, which gives guidance on how to manage relations among states in Southeast Asia. By 2010, 19 non-ASEAN states (including key players like China, India, and the United States) had acceded to the Treaty.

The Treaty has the following to say about conflicts (emphasis added):

In the event no solution is reached through direct negotiations, the High Council shall take cognizance of the dispute or the situation and shall recommend to the parties in dispute appropriate means of settlement such as good offices, mediation, inquiry, or conciliation. The High Council may however offer its good offices, or upon agreement of the parties in dispute, constitute itself into a committee of mediation, inquiry or conciliation. When deemed necessary, the High Council shall recommend appropriate measures for the prevention of a deterioration of the dispute or the situation.

In this Article, the High Council is mentioned as the key body to be responsible for managing and settling conflicts. The power of the High Council is coded in Article 14, which says: “To settle disputes through regional processes, the High Contracting Parties shall constitute, as a continuing body, a High Council comprising a Representative at ministerial level from each of the High Contracting Parties to take cognizance of the existence of disputes or situations likely to disturb regional peace and harmony.”

The phrase “To settle disputes through regional processes…” and “a High Council comprising a Representative at ministerial level from each of the High Contracting Parties” emphasizes once again the inherent fragmented nature of the decision-making authority and the slow bureaucratic process of decision-making, even in times of disputes and conflicts.

Unfortunately, the Treaty’s conflict settlement mechanism through the High Council has never been applied to resolve any dispute, including the South China Sea dispute, even though the Treaty is supposed to be effective not only for ASEAN members but also for other signatories, including China. The failure of ASEAN to establish and give authority to the High Council as a regional tribunal has shaped the pattern of settling conflicts through bilateral discussions or third-party settlements. As a result, it is not surprising why China has successfully insisted on only conducting bilateral discussions with individual claimants.

As can be seen, the South China Sea dispute is a critical test for ASEAN since the dispute pushes all the clashes of interests at each of the three levels to the extreme, exposing the organization to the decision of whether to modify and upgrade itself, or to lose its central influence in the region. The international factors are external threats to ASEAN while the state-level and organization-level factors can be classified as internal threats. As a result, ASEAN should focus on dealing with its internal threats rather than its external threats, over which the organization has little control.

Part 3, the final part of this series, will give practical recommendations for ASEAN to overcome the challenges posed by the South China Sea dispute.