The Association of Southeast Asian Nations failed to reach consensus on
handling disputes in the South China Sea, reflecting a rift between China and
the U.S. over rules to keep peace in the trade lane.
Cambodia, which holds the group’s
rotating chairmanship, rejected a compromise on the wording of a joint
communique among the other nine members in Phnom Penh, according to Sihasak
Phuangketkeow, Thailand’s top foreign ministry bureaucrat. The bloc’s inability
to agree on a communique is unprecedented, Indonesian Foreign Minister Marty
Natalegawa said.
“This is strange territory for
me,” he told reporters yesterday after a week of meetings. “It’s very, very
disappointing that at this 11th hour Asean is not able to rally around a
certain common language on the South China Sea. We’ve gone through so many
problems in the past, but we’ve never failed to speak as one.”
The squabbling underscores
growing unease among the Philippines and Vietnam over China’s assertiveness in
disputed waters that may contain oil and gas reserves. China this week rebuffed
U.S. calls to quickly complete a code of conduct for the seas as Secretary of
State Hillary Clinton warned more clashes are likely without a regionwide deal.
“It’s a sign of Asean’s maturity
that they are wrestling with some very hard issues here,” Clinton told
reporters yesterday. “They are not ducking them. They are walking right into
them.”
Oil, Gas
The region is estimated to have
as much as 30 billion metric tons of oil and 16 trillion cubic meters of gas,
which would account for about one-third of China’s oil and gas resources,
according to China’s official Xinhua News Agency. China had 2 billion tons of
proven oil reserves and 99 trillion cubic feet of natural gas reserves in 2010,
according to BP Plc estimates.
The Philippines wanted the
meeting’s communique to mention a two-month standoff with Chinese vessels over
a disputed reef known as Scarborough Shoal in the Philippines and Huangyan
Island in China. In the security meeting of 26 Asia-Pacific nations and the
European Union yesterday, Philippine Foreign Secretary Albert del Rosario
denounced “pressure, duplicity, intimidation” from China and warned that
tensions “could further escalate into physical hostilities that no one wants.”
“The chair had a problem with
mentioning Scarborough Shoal,” he said in an interview afterward, referring to
Cambodia. “We’re looking to report what’s factual, so we said if we don’t
report Scarborough Shoal, what are we talking about? So he took a position and
I took a position and we reached an impasse.”
‘Unfair Accusation’
Cambodian Foreign Ministry
official Kao Kim Hourn rebuffed criticism that his nation was under pressure
from China, calling it an “unfair accusation.”
“The process of discussions is
still ongoing,” Kao Kim Hourn, a spokesman for Cambodia during the meetings,
told reporters as most foreign ministers left the venue. “The moment we go into
specific issues, we have a hard time to secure the consensus.”
China warned nations this week to
avoid mentioning the territorial spats during the Asean meetings and repeated
calls for joint development. Vice Foreign Minister Fu Ying two days ago said
China would start talks with Asean on a legally binding Code of Conduct in the
South China Sea “when conditions are ripe,” according to Xinhua.
Conduct Code
After the security meeting,
Chinese Foreign Minister Yang Jiechi urged the Philippines to avoid making
trouble, Xinhua reported. He reiterated control over the disputed reef and said
Chinese people were shocked and surprised when the Philippines confronted its
vessels, the report said, citing Yang.
Asean’s discord over the
communique “could enhance the prospects for reaching agreement” on a Code of
Conduct because China “is less likely to feel that all the Asean member states
are ganging up against it,” Robert C. Beckman, director of the Center for
International Law at the National University of Singapore, wrote in an e-mail.
Key issues will be whether Asean can reach consensus “and remain united on
those principles during the negotiations with China,” he said.
Clinton downplayed the risk of
conflict with one of the U.S.’s biggest trading partners and stressed ways to
cooperate with China in the region. U.S.-China commerce totaled $503 billion in
2011, more than double the combined $194 billion traded with Indonesia,
Thailand, the Philippines, Malaysia, Vietnam and other Asean nations, according
to the U.S. Census Bureau.
U.S.-China Talks
The U.S. interest in the South
China Sea is based on the importance of freedom of navigation in the 1.2
million-square- mile body of water that links the Pacific and Indian oceans,
Clinton said yesterday. China has denied its actions threaten ships passing
through the waters.
“We recognize that a zero-sum
approach in the Asia-Pacific will lead only to negative-sum results,” Clinton
said, noting that her meeting yesterday with Yang touched on science,
technology, public health and the environment. “So we are committed to working
with China within a framework that fosters cooperation where interests align,
and manages differences where they don’t.”
Regional Solution
Vietnam and the Philippines, a
U.S. ally, reject China’s map of the waters as a basis for joint development
and have sought a regional solution to increase their bargaining power with
Asia’s biggest military spender. Clinton has urged the countries to define
their territory based on the UN Law of the Sea, a move China has resisted
because it may lead to a loss of some waters it now claims.
Vietnam Oil & Gas Group
(PVD), known as PetroVietnam, last month called for China National Offshore Oil
Corp., the government- owned parent of Cnooc Ltd., to cancel an invitation for
foreign companies to explore nine blocks that overlap with areas awarded to
Exxon Mobil Corp. (XOM) (XOM), Moscow-based OAO Gazprom and India’s Oil &
Natural Gas Co.
The differences represent a
learning experience for Asean, Secretary-General Surin Pitsuwan said in an
interview yesterday.
“Asean operates on consensus and
if one member holds back, we can’t move,” he said. “We need to digest the
experiences and try to make sure we internalize, we understand and we walk
forward.”
Daniel Ten Kate and Nicole Gaouette
Business & Investment Opportunities
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