*** More Questions Than Answers in the South China Sea

By Stratfor

The competition over the disputed waters of the South China Sea has heated up over the past few months. China accelerated its defense buildup in the area, installing weapons on its artificial islands in the Spratly archipelago and enhancing its presence on the Paracels. Vietnam followed suit and upgraded its defense in the Spratlys, while the Philippines considered taking steps to shore up its own claims in the island group, including Thitu Island. Adding to the tension, China seized a U.S. Navy drone and intercepted a U.S. P-3C Orion surveillance aircraft flying over the disputed areas.

Yet even as the competition mounted in the South China Sea, diplomatic relations between China and the claimants in Southeast Asia entered a period of relative calm. Now, China and members of the Association of Southeast Asian Nations (ASEAN) are laying aside their differences and heading to the negotiating table. Representatives from the countries met in Bali during the week of Feb. 27 and plan to hold another conference in the Philippines in June. The goal is to formalize a legally binding code of conduct to govern maritime disputes in the South China Sea, the world's busiest and most hotly contested waters, by the end of the year. But despite the temporary lull in maritime tensions between the countries and the cautious optimism of some ASEAN members — including the Philippines, the bloc's current chair — the meeting raised more questions than it has answered.

Analysis

The negotiations are not a first for China and ASEAN's member states. In 1995, following a flare-up in which China occupied one of the Philippines' claimed territories in the Spratly Islands, the countries began discussions aimed at reaching a collective settlement in the South China Sea. ASEAN led the campaign for a binding agreement to control claimant states' behavior and prevent an armed conflict from erupting. But nearly seven years of discussions stopped short of producing a code of conduct and instead yielded the nonbinding Declaration on the Conducts of Parties in the South China Sea. The agreement, signed in 2002, included neither an enforcement mechanism nor even a clearly defined obligation for its signatories. And so, after a few cooperative ventures between claimant states — including a joint seismic study that China, Vietnam and the Philippines conducted from 2005 to 2008 — the South China Sea entered another period of heightened tension.

A Declaration of Inefficacy

The reasons the negotiations failed to produce a binding agreement were manifold. The parties involved never agreed on which islands in the South China Sea are considered disputed, largely because of China's sprawling maritime claim under the controversial nine-dash line. The Paracel Islands were also a constant point of contention during the first round of negotiations. China, which had occupied the island group since the 1970s, refused to label the Paracels as disputed territories, though Vietnam maintained a claim to them and demanded their inclusion. Furthermore, ASEAN struggled to formulate a coherent strategy to counter China's maritime claim. Differences between the bloc's South China Sea claimants and members such as Cambodia, Laos and Thailand — not to mention the conflicting claims within the group — prevented ASEAN from finding consensus. Beijing, meanwhile, plied the bloc's individual members with economic incentives to keep them divided. And on top of these factors, China was only just beginning to pursue its ambition for greater control over the South China Sea.

Though many of the factors that doomed the first round of negotiations are still in play today, the past 15 years have transformed the region's geopolitical landscape. China's economic boom — and its success in translating its newfound wealth into military and political might — reshaped Beijing's strategy for maritime expansionism. Emboldened by its new circumstances, China steadily grew more assertive in the South China Sea, upsetting regional relations and escalating maritime tensions in the process. In 2012, for example, China set off a yearslong dispute with the Philippines when it seized the Scarborough Shoal. Beijing made waves again two years later by deploying a deep-sea oil rig near the Paracels, flouting Vietnam's claim to the area.

As Beijing's quest for maritime dominance continued, claimants in Southeast Asia — each far less militarily and economically capable than China — began bolstering their own maritime claims, defense capabilities and strategic alliances. They also entreated the United States, Japan and, to a lesser extent, India and Australia to counteract Beijing's activities in the South China Sea. Still, ASEAN never gave up on formalizing a code of conduct, despite China's resistance. The longer Beijing dragged its feet on the matter, however, the more opportunities it had to ratchet up its tactical advantage over other claimants. And within ASEAN, members' varying relations with China and competing maritime claims exacerbated the group's long-standing socio-economic fractures. The bloc's consensus-based approach to decision-making, moreover, caused strife with its more aggressive members, such as Vietnam and the Philippines — the latter of which sought international arbitration over the Scarborough Shoal dispute.

A Claimant's Got to Have a Code

In July 2016, the International Court of Arbitration in The Hague ruled against China's claims to the territory. And since then, ASEAN and Beijing have taken some early steps toward establishing a dispute-management mechanism. China relented in its opposition to negotiations over the code of conduct and even agreed to measures to avoid conflict, such as implementing emergency hotlines and adopting the Code for Unplanned Encounters at Sea. At the same time, it offered several claimant countries economic and maritime concessions, for instance allowing Philippine fishermen to return to the Scarborough Shoal and proposing joint energy development projects in the disputed territory. Some claimants accepted the gestures more readily than others did. While the Philippines began to re-evaluate its stance on China, Vietnam and Malaysia kept their diplomacy and defense options open as they worked to ease tensions with Beijing. 

The change reflects the evolving strategies on each side. Beijing is trying to avoid further alienating its neighbors in the bloc while also trying to keep external powers from getting more involved in the region. ASEAN's members, meanwhile — unsure of the soundness of the United States' security commitment or the utility in trying to collectively counter China — are moving toward unilateral action. Even so, given the numerous disputes entailed, and considering that Beijing will probably never give up its maritime assertiveness, the latest efforts to forge a binding agreement are bound to face the same problems that hampered the last discussions.

Though it is still unclear whether ASEAN and China will move to formalize a binding code of conduct as promised, several factors will be working against them. For one thing, much like the existing pact, the proposed code of conduct lacks clear-cut enforcement mechanisms. The framework doesn't grant ASEAN the legal power to check claimants' behavior, let alone a way to monitor or enforce compliance with the code. For another, even if China and ASEAN ratified a binding agreement, it would likely not be designed as a dispute settlement mechanism. Beijing has made clear that it will resolve conflicts only on a bilateral basis through its preferred mechanisms, such as joint energy exploration projects. The deal's dubious prospects have left many members in ASEAN wondering whether a multilateral mechanism is worth the effort. 

This article appeared originally at Stratfor.