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Dialogue between Philippines and China may hold the key to soothing tensions and promoting peace in a longstanding regional flashpoint. Emotions ran high after the Hague-based Permanent Court of Arbitration (PCA) rendered a historic decision ending a 3-year arbitration process marred by China’s non-participation and artificial island-building and US challenges to excessive Chinese claims through freedom of navigation operations. The Award was considered a milestone in reiterating that pre-existing rights or historical claims are already superseded by UNCLOS and that features that do not qualify as true islands are ineligible for extensive maritime entitlements, save for a maximum12 nautical mile territorial sea for rocks. With a favorable ruling, there is much pressure on the Philippine government to use this legal and moral high ground to put to rest the decades-old dispute, but political realities make this difficult. There is also an emerging view that, despite the enormous resources invested in the legal track, dialogue may still hold the key to resolving the disputes.

Magnanimous in victory

The legal victory was a vindication for the Philippines which made tremendous sacrifices, including self-imposed limits on maritime economic activities and infrastructure upgrades in Philippine-held features in the West Philippine Sea (WPS) while the matter was being heard, just to demonstrate sincere commitment to the legal process. As such, there is much expectation that these hardships will be compensated and Filipinos can resume unimpeded access to WPS marine resources, among others, now that PCA delivered a favorable verdict. Understandably, the foreign affairs and legal team of the previous Aquino Administration would want the new Duterte Administration to negotiate with China within the bounds of the Award. But will this not be setting a precondition for bilateral talks the way China insists on its “indisputable sovereignty” as the basis for any negotiations in the South China Sea? Though there is a big difference between the two – an international law-sanctioned basis and a unilateral assertion – both are seen as preconditions which undermine interest to engage in good faith dialogue. It is in this context that Philippine magnanimity given the overwhelming decision should best be understood. Philippines, in relation to the ruling, adopted a no “taunt (China with the ruling) or flaunt (the ruling)” policy and called for restraint and sobriety.

This magnanimity was a noble move and is in keeping with Philippine commitment to discuss the issue with China regardless of the arbitration outcome. This is a goodwill signal that China must pick up and the region should encourage. Follow up actions have to be made to bolster perceived and real value of talks, otherwise dialogue fatigue may set in. It must be remembered that frustration with previous bilateral negotiations led the Philippines to pursue arbitration. Thus, both sides have to meet half way and exchange concessions to show their domestic audiences the fruit and further promise of dialogue. For instance, there are basic and less politically-charged issues raised in the arbitration claims that both sides can sit down and find ways to address, including access to resources, navigational rights and refraining from further occupying presently unoccupied features.

Rules-based order by and for whom?

The arbitration has oftentimes been framed in the larger context of which regional order should prevail – one where rules are followed and freedom of navigation and overflight (FONO) is enshrined or another where intimidation, coercion or threat is the order of the day. However, while this logic may get adherents, it is far too simplistic. For one, while regional and extra-regional states stress the importance of observing “rules” and promoting a “rules-based” regime or approach in peacefully resolving disputes, there seems to be no consensus as to the exact meaning of these terms. Some states emphasize bilateral, minilateral or multilateral negotiations, while others put premium on international law and third-party adjudication and all can be argued as options within the rules-based framework. In fact, even within this range of options, states are divided, with some being averse to the idea of including non-relevant extra-regional powers in discussing the South China Sea (SCS) disputes as they may only complicate the situation, while others insist that they be invited to balance against China’s big-power effect.

In the matter of FONO, US, China and other regional states remain divided as to whether the same apply only to commercial vessels or if it also includes military ships and aircraft. For now, some Southeast Asian states may downplay the presence, transit, visits, and basing of foreign military assets in their territory and waters because of their perceived value in deterring or countering China’s assertiveness in the contested sea. However, US-China rivalry is making it difficult for littoral states to openly engage US for defense cooperation as this may be seen as participating in efforts to check China. This concern should be considered by the US as it deepens security engagement with its network of regional allies. While a security balancer is warmly welcomed, Philippines and the rest of Southeast Asia would not want to be the battleground for great power hostilities. China must also understand that its assertiveness in SCS - including reports of building new artificial islands, expanding structures in its occupied features, potentially establishing an Air Defense Identification Zone, and increased naval patrols – feeds regional anxiety and pushes militarily weaker states to engage bigger powers like US, Japan, India and Australia. China’s disadvantage is that absent reassurance, crisis management mechanisms, confidence building and harmonious ties with its maritime neighbors, its responses to US actions in SCS will be seen as gunboat diplomacy.

Unlike US which has unimpeded ready access to two key world oceans, China’s access to the Pacific is constrained by Japan and US security allies and the US pivot and FONOPS in SCS only serve to heighten this growing security discomfort. Great Britain, another naval power in its heyday, was favorably located facing the North Atlantic and like US is also spared from intense maritime disputes with neighbors. This could explain China’s desire to modernize and expand its increasing blue water naval capabilities to break out into the Pacific and not be bottled up in its near seas. But unlike US and Britain, China is embroiled in maritime disputes with its neighbors and this may limit freedom of movement of PLA Navy lest it be seen as intimidating or threatening regional stability. Thus, it can be argued that development of an ocean-going navy and successful handling of disputes with neighbors will make China less averse to US Navy FONOPs in SCS as China now better understands how naval powers work. China also has to recognize US treaty commitments to regional security allies. Naval powers inherently oppose being constrained and, though they may agree in principle to heed international regimes, their commitment may waver when the same clashes with their national interests. Should China be expected to be any different from past and current naval powers? Unfortunately, great powers have not given a rising power like China a good lesson to draw from - 1986 US vs Nicaragua and 2015 UK vs Mauritius demonstrate how big powers snub international law and get away with it. Will China tread the same path or take the high ground by setting a good precedent for big powers now and in the future to follow?

Way forward

Philippines and China are expected to reflect on the verdict and calibrate their next moves depending on domestic and international considerations. With emotions running high, cooler heads should prevail and both sides should refrain from undertaking steps that can only heighten tensions, such as intensifying naval patrols and stories of creating exclusion zones. These reports and rumors are unhelpful given the present climate. In relation to the Award, there are more doable aspects that both sides can search for ways to implement the soonest – resumption of peaceful exercise of maritime economic and navigation rights and refraining from occupying unoccupied features. Both sides should manage expectations – China should not expect the Philippines to simply forego the ruling in its entirety in the same manner that Philippines should not expect China to enter a dialogue within the strict bounds of the Award. Both sides should attempt to meet halfway.

US and individual Southeast Asian states have been engaging China in bilateral talks over a wide range of issues, including security challenges. US and China have an annual Strategic and Economic Dialogue since 2009, not to mention myriad other formal and informal channels (e.g. US-China Consultation on People-to-People Exchange) where representatives of both sides regularly meet to discuss issues of shared interest. Vietnam and China, for their part, have fisheries and maritime law enforcement hotlines critical for managing incidents in SCS before they reach crisis proportions. There is no reason for the Philippines not to explore this option as well. China’s preference for bilateral talks stems from its experience in resolving 12 of its 14 land boundary disputes and one maritime boundary dispute (with Vietnam over Tonkin/Beibu Gulf). Philippines’ lone experience in delimiting maritime boundary (with Indonesia) was also bilateral. Hence, bilateral talks should not be demonized as it has proven to be effective in resolving border issues. Having said this, such talks should not involve trading away sovereignty, territorial integrity and sovereign rights for economic concessions. Principled dialogue can take place whereby parties can sincerely attempt to address issues of mutual concern, beginning with less sensitive ones and progressing to tackle more complicated issues.

Philippines may decide to consult partners and friends as it embarks in a dialogue with China but this decision is for Manila to make. In the same way as Beijing should not apply pressure or set conditions for Manila to engage in talks, other states should also not press Manila to be the agency for their vested interests. While it may consider factoring some of their concerns, as well as push for adherence to international norms, Philippines should prioritize its own national agenda as it deals with China. It is always difficult to negotiate with too loaded an agenda. Moreover, national interests are not perfectly congruent with that of alliance interests and in the event they would clash, there should be no confusion as to which one takes priority.