The annual mid-year Asean meetings discussed, but then once again set aside, the highly disputatious issue of the South China Sea. This was no surprise. The host of the meetings, the Philippines, has had its own problems settling on a policy towards the regional disputes. Since last year's election of colourful President Rodrigo Duterte, Manila has seemed rudderless on the issue. Despite efforts by several of the 27 countries that took part in the Asean meetings earlier this month, that lack of direction prevailed.
Suddenly, after the foreign ministers had departed for home, all of that changed. Philippines diplomats and ministers said Manila and Beijing had reached a bilateral deal over their South China Sea disagreements. It seems like a true breakthrough. The Philippines calls it, simply, "status quo". In essence, China has agreed it will stop "developing" reefs and shoals in the South China Sea area claimed by the Philippines. But there's more: the two countries are to launch joint operations to explore for and exploit oil and gas resources.
It must be said that this is not an optimal deal. It only plays into China's consistent condition of bilateral talks and agreements. To that end, the Manila-Beijing agreement establishes what Manila calls a modus vivendi, or a way to get along. In important ways, it effectively rejects efforts by both Asean and others in the international community to achieve a "code of conduct" for the South China Sea.
Thailand, which has no claims on the South China Sea, has for two decades been especially involved in pushing for a code of conduct. So the first question about the still unofficial Philippines-China agreement is how it affects the rest of Asean and its strong efforts to get Beijing to agree to a code of behaviour for the entire region. In Manila this month, the foreign ministers of the US, Japan and Australia were especially supportive of a code of conduct that covered the entire sea.
It cannot be denied, however, that any agreement at all about peaceful conduct on this very disputed sea is hugely positive. In addition to the Philippines, other Asean members with credible claims to parts of the South China Sea are Vietnam, Malaysia, Brunei and Indonesia. Vietnam and Taiwan are particularly aggressive about their military-occupied islands in the Spratly group. In recent months, Indonesia has confronted China directly over the Natuna islands.
Clearly, the issue of the South China Sea requires intervention. The 40-year policy of kicking this can down the road must stop, because littoral countries are becoming more vocal and active over their claims. The question, then, is whether the Manila-China deal is a real breakthrough and model for peaceful settlement.
No two events are exactly alike, but the Thai model actually provides optimism. In 1990, after 11 years of negotiations, Thailand and Malaysia signed a Joint Development Area agreement. It set aside territorial claims for now, including ownership of two islands, Koh Kra and Koh Losin. The two countries have successfully exploited petroleum resources for 27 years in this disputed area, peacefully.
Joint development areas that set aside territorial hostility are not new. But the Thai-Malaysian pact and practice have been highly successful. More important now is the reported Chinese agreement with the Philippines. For Beijing, true bilateral development in a disputed area is a brand new policy.
While it offends the policy of a full code of conduct, the Manila-Beijing agreement could cool the threat of hostilities. Even more to the point, it could be a model for dealing with China in this dangerous South China Sea region.