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Background Briefing: South China Sea Code of Conduct: ASEANs Holy Grail? Carlyle A. Thayer April 23, 2013

[client name deleted] We seek your assessment about the role of Brunei as ASEAN's Chair and Thailand's role as country co-ordinator for China. Q1. Recently China has offered a special meeting with ASEAN countries about the Code of Conduct for the South China Sea. Sources said that the meeting would be held later this year. ANSWER: It is not clear that China actually requested a special meeting with ASEAN to discuss the Code of Conduct. Chinas offer was detailed by Indonesias Foreign Minister Marty Natalegawa and reported by Agence France Press. Other news sources report privately that they cannot confirm this. They report that China requested a meeting to discuss commemorative activities regarding the tenth anniversary of their strategic partnership. There are other reports that China is trying to convince ASEAN countries to lobby the Philippines to drop its legal claim before the United Nations. Other sources report that China is trying to exclude the Philippines from discussions because it is not acting within the spirit of the Declaration on Conduct of Parties. Whatever the rumours, China is motivated to deflect criticism in advance of the ASEAN Summit and related meetings this month, and later in the year when the East Asia Summit meets. Q2. The Economist quoted Minister of Foreign Affairs and Trade that Brunei hopes to conclude a code of conduct (CoC) on the South China Sea by October. Beside, a foreign ministry official said Brunei would pursue a binding code of conduct among competing South China Sea claimants as a top priority during its ASEAN chairmanship. Do you believe ASEAN can get the COC within this year? Why? ANSWER: Brunei, as ASEAN Chair, is acting responsibly by reflecting what the clear majoring of ASEAN members want that is further progress on the Code of Conduct. It has set October as the nominal deadline because this would mean it could be considered by the next ASEAN Summit in November. Thanks to diplomatic efforts by Indonesia, ASEAN has a nearly completed draft Code of Conduct. But this draft contains controversial provisions, such as no military exercises and no surveillance activities. ASEAN must first reach agreement among its members on the final draft. It then must discuss this with China. The entire history of negotiating the COC, from

2 2002 to the present, indicates this will be a protracted process. China will insist on progress on the DOC first and no confidence-building project has been started. Bruneis October deadline is a political deadline but it is not a realistic one. Q3. Why has China actively proposed a meeting with ASEAN to discuss about COC? ANSWER: It is not yet clear that China proposed a meeting with ASEAN to discuss the COC. This is the view of the Indonesian Foreign Minister quoted by AFP. Marty was quite specific. If this report is correct China is acting tactically to deflect any criticism at the ASEAN Summit and related meetings later this week. China would also try and draw out these discussions as long as possible to play on differences in ASEAN and to secure concessions favourable to China. This is a case of look at what China does not what it says. 4. What is your assessment about the role of Brunei as ASEAN's Chair so far? Given Brunei's diplomatic maturity, capability... and especially many economic ties with China? ANSWER: Brunei is acting in an exemplary manner. Its Foreign Minister is also the Sultans brother. The Sultan has conferred with President Xi Jinping of China, President Barack Obama of the United Stated and President Benigno Aquino of the Philippines on various matters including the South China Sea. Brunei has put its prestige on the line and will expect China to respond accordingly. Brunei is rich and has many close strategic partners. China cannot use its economic leverage to sway the Sultan as it did with Cambodia. 5. Recently, Chinese premier Li Keqiang stated that China and Thailand have family- like relations. Given their strong economic ties, do you think Thailand can be neutral as its role of coordinator of ASEAN and China? Why? And how should they balance it? ANSWER: Thailand is chasing two rabbits at the same time. Thailands first rabbit is to maintain close and cordial relations with China. Thailand therefore offers to soften the South China Sea issue by hosting meetings as country coordinator. Thailands second rabbit is to support ASEAN unity or at least appear that it is not creating disunity. Thailand cannot easily catch both rabbits. Thailand will give priority to the former and will defer to Brunei when it comes to ASEAN unity. 6. Permanent secretary at the Thailand Foreign Ministry, Mr Sihasak Phuangketkaew, said earlier this year that: - Asean and China should look at the big picture and Beijing should not regard a common ASEAN position as an attempt to pressure the new leadership. - As long as the South China Sea is a source of conflict, most countries in the region will look to the US to counter-balance China's influence. Acknowledging this should make China more flexible, to prevent ASEAN from reaching out to the US too much. What is you assessment of the statement? Does it mean that ASEAN can manage the conflict itself and does not need the assistance of the US, or that China needs to accept negotiating and resolving disputes with ASEAN as a group? ANSWER: Let me use another metaphor. Thailand is walking on a tight rope balancing two baskets over its shoulder pole. Thai-China relations are in one basket

3 and Thai-US relations are in another. The Yingluck government, like the Thaksin government before, leans to China even through it is a US ally. Thailand used to be a key member of ASEAN but internal instability has eroded Thailands position. Thailand is trying to use its role as country coordinator for China to improve its position within ASEAN. Thailand will respond just enough to US pressures to satisfy the Obama Administration. Suggested citation: Carlyle A. Thayer, South China Sea Code of Conduct: ASEANs Holy Grail?, Thayer Consultancy Background Brief, April 23 , 2013. Thayer Consultancy Background Briefs are archived at Scribd.com

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