ASEAN makes progress on creating regional economic bloc, stalls on South China Sea disputes

BANDAR SERI BEGAWAN, Brunei – Southeast Asian leaders were upbeat Thursday about progress made on an ambitious plan to weld the region into a European Union-style economic community as a counterweight to Asian powerhouse China, while efforts were stalling on South China Sea disputes.

Leaders attending the Association of Southeast Asian Nations summit in Brunei had hoped China would soon agree to start talks on a nonaggression pact to prevent a major clash in the disputed territories that could smoke out their region’s robust economies.

But China has given no clear indication when it would agree to negotiate such a stopgap accord, known in ASEAN parlance as a “code of conduct.”

The ASEAN leaders said in a joint statement after the summit that they have asked their foreign ministers “to continue to work actively with China on the way forward for the early conclusion of a code of conduct.”

“We all agreed to encourage continuing discussions, dialogues and consultations at all levels, especially claimant countries, and to keep the lines of communication open,” said Brunei’s leader, Sultan Hassanal Bolkiah, host of this year’s ASEAN summits.

Rival claimants, the leaders said, should resolve the disputes peacefully “without resorting to the threat or use of force while exercising self-restraint in the conduct of activities.”

Thailand has proposed a meeting of the bloc’s foreign ministers where they could again discuss the disputes, before they meet their Chinese counterpart in a diplomatic event in Beijing sometime in October, according to diplomats.

Bolkiah proposed an emergency hotline to avoid misunderstandings, such as when fishermen take shelter in a disputed area amid a storm, an act that could be mistaken for an intrusion.

During the summit, ASEAN leaders also expressed concern about North Korea’s latest threats.

Although overshadowed by security issues, an ambitious plan by ASEAN to transform itself into an EU-like community of more than 600 million people by the end of 2015 has sparked more optimism, with diplomats saying the bloc was on track to meet the deadline.

About 77 per cent of the work to turn the bustling region into a single market and production base, first laid out in 2007, has been done, according to the leaders.

Non-tariff barriers and regulatory hurdles that impede investments and business, however, still need to be abolished, they said. They announced that negotiations would start May 9 for a vast free-trade area with key trading partners China, India, Japan, South Korea, Australia and New Zealand. Free-trade talks with Hong Kong will also be launched.

The leaders of the 10-nation bloc met at a newly built stone and marble building that reflects oil-rich Brunei’s economic might, an envy of ASEAN’s lesser-developed members. The tiny jungle-clad kingdom of 400,000 people on Borneo island is so wealthy that Bruneians do not pay taxes.

Carl Thayer, an expert who has extensively studied the territorial conflicts, said ASEAN may have committed a strategic mistake of agreeing to a crucial process that could easily be stalled by China, which would not commit to anything that would restrict its plans.

“ASEAN is stuck in a bureaucratic rut,” Thayer said.

The battle for ownership of potentially oil-rich territories in the South China Sea has settled into an uneasy standoff since the last fighting, involving China and Vietnam, which killed more than 70 Vietnamese sailors in 1988. The other claimants are Brunei, Malaysia, the Philippines and Taiwan.

New skirmishes, however, have erupted in the last two years, involving Vietnam, the Philippines and China, which claims the busy waterway virtually in its entirety.

Concerns have been exacerbated by China’s deployment of a patrol ship, equipped with a helipad, to guard its claimed areas and establishment last year of what they called Sansha city on a remote island to administer territories being contested by rival claimant countries.

A tense standoff that erupted last year between Chinese and Filipino ships over the Scarborough Shoal has remained unresolved, prompting the Philippines in January to take a daring legal step that challenged China’s vast claims before a tribunal under the United Nations Convention on the Law of the Sea. China has ignored the move.

Philippine Foreign Secretary Albert del Rosario said all the five arbiters of the tribunal have been appointed and they could now start looking into the case if they declare they have jurisdiction.

The long-raging disputes have threatened to divide ASEAN. Last year, its foreign ministers failed to issue a joint statement — a first in the bloc’s 45-year history — after Cambodia refused mention of the territorial rifts in the communique, provoking protests from Vietnam and the Philippines.

Cambodia, a known China ally, has towed Beijing’s line that the disputes should not be brought to the international arena. China wants the disputes settled by negotiating one on one with each of the rival claimants, something that will give it an advantage because of its sheer size.