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The South China Sea Arbitration: the Republic of Philippines vs. the People's Republic of China

China Goes on Trial in the South China Sea

Lead Analyst: Evan Rees

Stratfor 16 May 2016

Forecast

  • The Philippines’ U.N. court case against China will likely undermine Beijing’s legal claims to islands in the South China Sea.
  • China will continue, however, to adhere to the maritime boundaries marked by the nine-dash line, rendering the court’s ruling largely ineffective.
  • But a decision in favor of the Philippines will embolden other claimants, giving them greater room to counter China’s assertiveness in regional waters.

Analysis

While working to expand its role in the Pacific region, China has taken steps to protect its strategic trade routes, resources and markets from foreign interdiction. In part, this has meant trying to cement Beijing’s long-standing claims to a broad swath of the South China Sea — claims that China’s Pacific Rim rivals dispute. Since the first serious territorial clash occurred in 1974 between China and Vietnam, conflicts have become more frequent, albeit less deadly, with the passing of each decade. At the same time, the islands’ various claimants have moved to fortify their positions in any way they can, including by leaning on international law. Rather than constantly trading fire, countries now more frequently exchange accusations, alleging willful misinterpretations of the legal doctrines outlining what constitutes an island, reef, shoal or rock.

Some rival nations, such as the Philippines, have even gone so far as to take their competitors to court. In January 2013, Manila initiated legal proceedings against Beijing for violating the U.N. Convention on the Law of the Sea (UNCLOS), a 1994 international agreement often called the “constitution for the oceans” that was intended to provide predictable, mutually agreed-upon definitions and mechanisms to settle maritime conflicts. Since all of the South China Sea’s major claimants (with the exception of Taiwan) are parties to the agreement, UNCLOS should, in theory, solve any disputes that take place there. The U.N. Permanent Court of Arbitration agreed to hear the Philippines’ case in October 2015, and it is expected to announce its decision by the end of June.

But China may yet throw a wrench in the works. Despite being a signatory to UNCLOS, Beijing has refused to accept the court’s authority to issue a binding decision on the matter. The United Nations appointed a five-member tribunal to the case anyway, but China has steadfastly defended its right to the more expansive maritime claims laid out by the nine-dash line, which outlines the country’s vast territorial claim over much of the South China Sea. (The provisions laid out in UNCLOS would likely require shrinking those claims, since the exclusive economic zones of other South China Sea states could jut into the territory bounded by the nine-dash line.) Because the U.N. court will probably also reclassify different types of landmasses in a way that will be unfavorable to Beijing, UNCLOS is of dubious value to China. Consequently, Beijing has long fought to arbitrate territorial disputes outside the agreement’s binding mechanism, preferring to hold direct talks with other claimants instead. Now, backed into a corner by the Philippines, China must decide whether to renounce UNCLOS entirely or rely on its own interpretation of international law, regardless of whether it flies in the face of the court’s ruling.

The Philippines v. China 

At the center of the court battle between Manila and Beijing are the Scarborough Shoal and the Spratlys, scattered dots of land off the Philippine coast that lie in what Manila calls the West Philippine Sea. According to the Philippines, China illegally occupies seven landmasses in the Spratly chain as well as the Scarborough Shoal itself. Manila’s legal strategy is based on negating China’s claims in the South China Sea, including that the landmasses in question count as islands. It is not attempting to expand its own territorial claims, and it has conspicuously avoided engaging in new construction or repairs to its own extensive facilities in the sea. Instead, the Philippines has asked the United Nations to simply uphold the 200-nautical-mile exclusive economic zone set forth by the terms of UNCLOS, upon which Manila claims China’s nine-dash line demarcation impinges.

Unsurprisingly, China has refused to play along for a number of logical reasons. For one, China already has a physical presence on many of the landmasses in question. More important, though, its clout in the Asia-Pacific region is growing, which gives Beijing the ability to exert pressure on its neighbors without having to use the U.N. framework. China has officially rejected the idea of arbitration several times and has declined to appoint a representative to attend the proceedings. It did, however, issue a position paper in December 2014 detailing its argument as to why the U.N. court has no jurisdiction in the South China Sea and, even if it did, why the specific issues raised by Manila’s case lie outside the scope of litigation.

From Beijing’s perspective, it opted out of binding arbitration in 2006 and thus has the right to choose another method of resolution. (The United Nations denies this argument under Article 288 of UNCLOS, which grants the tribunal the power to decide whether a dispute exists and if its content is relevant.) Beijing, blaming the Philippines for showing bad faith by turning down its offers to negotiate, would rather settle the conflict under China’s 2002 pact with the Association of Southeast Asian Nations to formulate a code of conduct in the South China Sea.

Competing Stakes in the South China Sea

For the Philippines, the South China Sea is a lifeline to international markets. The fragmented archipelagic state relies on sea-lanes to maintain a steady flow of imports and to support its nascent manufacturing sector. Additionally, many of its coastal populations depend heavily on fishing to make ends meet. But as depleted waters push Chinese fishing vessels farther from China’s shores, theybegin to compete directly with Philippine vessels. If Manila loses any more ground in its dispute over the heavily trafficked waterway, its already weak geopolitical position will be shaken even further.

Yet the Philippines’ historical preoccupation with internal unrest has left it with some of the poorest outward-facing defense capabilities in Southeast Asia. Though Manila balked at extending its Cold War-era basing agreement with the United States in the early 1990s, Chinese aggression eventually persuaded the Philippine government to shift its stance. Since signing a visiting forces agreement with Washington in 1999, Manila has tentatively welcomed a renewed U.S. presence on its coasts, in spite of the popular backlash it has created. The United States’ support has given Manila additional latitude to defend its claims in the South China Sea, despite the risk of hurting the Philippines’ extensive trade with China. That said, the recent election of populist President Rodrigo Duterte, who hopes to take a more pragmatic approach to the negotiations with China, might complicate the situation.

Meanwhile, other countries with stakes in the South China Sea will be watching the Philippines’ case against China with interest. Vietnam, for instance, has reacted cautiously, sending an unpublished statement to the U.N. tribunal endorsing its jurisdiction and urging it to consider Vietnam’s rights in the matter as well. Malaysia and Indonesia, both South China Sea claimants, have assumed the role of observers alongside Thailand and Japan. And the United States, though it has officially remained neutral in the argument, published a report in December 2014 rejecting China’s claims in the South China Sea. It followed up on the report in July 2015 with a statement that said China, as a UNCLOS signatory, is obligated to comply with the court’s decision.

The primary spoiler in the region is Taiwan, neither a UNCLOS signatory nor, for that matter, a member of the United Nations. But it is an important claimant in the South China Sea and, more specifically, in the Spratly Island chain under Philippine scrutiny. (Taiwan occupies and claims Taiping Island.) Ironically, Taiwan’s stance in the South China Sea aligns with that of mainland China, and Taipei’s territorial claims are nearly identical to Beijing’s. In April, the government-backed Chinese (Taiwan) Society of International Law submitted evidence to the U.N. court intending to show that Taiping meets the classification of an island, not a rock as the Philippines has claimed. This last-minute submission could further muddle the proceedings and delay a final ruling.

A Useful Symbol for China’s Rivals

Still, the U.N. Permanent Court of Arbitration will eventually reach a decision, and when it does it will likely erode China’s legal claims in the South China Sea. But that does not mean the ruling will translate into sweeping regional change. China is a powerful player in the Pacific and, in the end, physically possesses the landforms in its control regardless of what international law dictates. A 2015 U.S. Defense Department report estimated that China has built up over 1,300 hectares (3,200 acres) of land on the seven Spratly landmasses under scrutiny in the U.N. case since 2013. It has now turned to developing infrastructure. The United Nations, by comparison, has little influence in the Pacific Rim or ability to enforce its writ.

This is not to say the Philippines’ case will have no impact. International law and institutions such as the United Nations are simply more ways for countries to promote their interests by constraining their rivals and helping their allies. The United States and states that fear China’s rise as the premier power in the Asia-Pacific region are no strangers to using these tools for their own ends. In fact, the United States — an actor deeply involved in the western Pacific but geographically removed from it — wants predictable international mechanisms and principles such as the freedom of navigation to reign supreme there to unify the negotiating power of its numerous partners in the region.

But the same international organizations greatly diminish the bargaining power of China, which would rather resolve matters with its smaller competitors through bilateral talks. Beijing’s goal is to use its mounting economic and military strength to steadily expand the bounds of its territory, better protecting its access to trade and international markets in the process. Thus, a ruling in favor of the Philippines, however symbolic in nature, would lend support to Washington’s framework and legitimacy to other claimants’ attempts to take action against Beijing.

China’s concrete options for reacting to the U.N. ruling will be limited, though. Technically, Beijing could renounce UNCLOS as a whole, but doing so would probably cause more harm than good for China. A UNCLOS exit would not take effect until a year after Beijing’s official renunciation, giving other South China Sea claimants considerable time to rush through last-minute cases against China. If Beijing wants to avoid further trials, exiting UNCLOS would not be the way to do it. Moreover, China would still be subject to the court’s ruling in the Philippines’ case, and it would lose the ability to use UNCLOS for its own ends. Beijing has long been interested in mining the region’s seabeds, something UNCLOS may assist with, and it is currently pursuing claims against Japan that rest on the convention’s limits on the continental shelf in the East China Sea.

Instead, China will likely take the path of least resistance to maintain its current stance in the South China Sea, insisting that its interpretation of dispute resolution outside of UNCLOS is the correct one. Furthermore, Beijing will continue to pursue its own interests in the region — just as the United States will continue to try to stop it — while the weaker South China Sea claimants struggle to keep their maritime boundaries from closing in around them.

The article was originally posted at https://www.stratfor.com/analysis/china-goes-trial-south-china-sea.

Read other commentaries and analyses on the same topic at

https://seasresearch.wordpress.com/category/events-and-analyses/arbitration-between-the-republic-of-philippines-and-the-peoples-republic-of-china/

For official positions and statements, check

https://seasresearch.wordpress.com/category/official-positions-and-legal-instruments/arbitration-between-the-republic-of-the-philippines-and-the-peoples-republic-of-china/.

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