U.S. South China Sea policy after the ruling: Opportunities and challenges

On July 12, the arbitral tribunal adjudicating the Philippines’ South China Sea case against China ruled unanimously and overwhelmingly in favor of Manila, determining that the extent of several parts of Beijing’s claim as well as its efforts to enforce it over the past few years were unlawful. As expected, in spite of its legal complexities, the verdict was widely seen as a victory of “right” over “might” and a boost for the rules-based international order that the United States has been championing. In reality, the ruling could also pose profound challenges for the future of U.S. South China Sea policy under the Obama administration and beyond.

Since the 1990s, the United States has been consistent in its general South China Sea approach that while it does not take a position on competing claims, it does have a view in how those claims are pressed and ultimately resolved. This position is in line with the preservation of key U.S. interests in the South China Sea, which include: safeguarding international norms like the freedom of navigation and overflight; fostering regional peace and stability; and preserving the credibility of the United States in the eyes of its allies, partners, friends, and adversaries.

Though the Obama administration has grown increasingly concerned about China’s assertive actions in the South China Sea in recent years, it has also been reluctant to let the issue disrupt U.S.-China cooperation on other fronts, drown out the voices of regional states, or dominate U.S. Asia strategy. Following from that, the administration’s approach has rested on three pillars. First, politically, Washington has encouraged claimant states to defuse tensions between themselves. Second, diplomatically, the United States has tried to knit together a group of concerned global actors willing to stand up for the rules-based international order and against Chinese assertiveness which undermines it. Third, militarily, Washington has sought to both build the capacity of Southeast Asian states as well as undertake its own efforts to resist Chinese aggression.

At first glance, the ruling would seem to be a boost for this three-pillared approach which provides new opportunities for interested actors. For claimants, the clarity on previously contentious issues such as China’s nine-dash line and the status of features now more clearly sets out the parameters for them to resolve their disputes with each other, a process that Washington would view favorably. As one senior State Department official put it in a briefing following the verdict, it could provide fertile ground for “diplomatic creativity” in the South China Sea. Beyond the claimants themselves, U.S. officials also hope that it could revitalize moribund talks towards an elusive, binding code of conduct in the South China Sea between China and the 10-member Association of Southeast Asian Nations (ASEAN).

For actors that have been trumpeting the value of a rules-based order in the face of China’s assertive actions, the tribunal’s verdict means that their interpretations have now been affirmed by a third party with final and binding legal authority, thereby boosting their weight and force. These countries, which include Japan, Australia, and the European Union, are part of an informal diplomatic coalition which Washington has helped form and that will now try to persuade Beijing to abide by the decision. Since the verdict itself lacks any sort of enforcement mechanism, the additional leverage the ruling gives this coalition is important as it seeks to convince Beijing to bring its policies in line with international law.

For Washington and a few of its allies and partners, the ruling also provides some additional clarity which can inform military decisions to be taken in line with stated principles and preexisting commitments. These include freedom of navigation operations (FONOPs), as well as patrols and exercises. To take just one example, with the tribunal finding that Mischief Reef—which China had seized from the Philippines in 1994—lies within Manila’s exclusive economic zone and on its continental shelf, the Chinese artificial island at Mischief Reef is no longer entitled to a 12 nautical mile territorial sea, and Washington and other willing actors have no obligation to even invoke innocent passage and can legally approach within 500 meters of the island.

Yet while the ruling does present opportunities for the United States and its allies and partners, they are also likely to confront a series of challenges as they attempt to seize the opportunities that the ruling presents.

First, getting parties to move towards resolving their disputes or even reducing tensions more generally is much more complex than it seems. For one, it is unclear that the parties have an incentive to move in this direction. Take China, for instance, which has just suffered a stinging legal defeat. To their credit, U.S. officials have gone out of their way to signal restraint to help China find the oft-cited “off-ramp” in the South China Sea, which would see Beijing move to clarify its unlawful nine-dash line in some way and enter into talks with other claimants. Yet it is far from clear if China sees this as being in its own interest. On the one hand, the ruling, combined with the emergence of a more conciliatory government in the Philippines under President Rodrigo Duterte, would seem to empower those in China who believe that their country’s actions in the South China Sea have tarnished its image and that there may be an opportunity to now shift to a more moderate approach.

But on the other hand, the verdict could also lead China to initially take a series of steps to signal its resolve in protecting its sovereignty as well as to deter other ASEAN states from challenging it as Manila has done. As it is, we have already seen Beijing take a number of expected kinetic actions such as land civilian aircraft on several reefs and announce military exercises in the South China Sea. But China could also implement more provocative measures that would raise tensions rather than reduce them, including stepping up militarization of the Spratly Islands in violation of President Xi Jinping’s pledge in Washington, D.C. last September or even moving towards declaring an air defense identification zone (ADIZ) over the South China Sea. This would be in line with those of a more hawkish persuasion who are willing to take more risks in the South China Sea because they are convinced that China can bear the short-term costs of doing so.

Even if claimants choose to move toward resolving their disputes and reducing tensions, they may not necessarily do so in a way that is in line with American interests. Take the Philippines, which has emerged as a clear victor following the ruling with a Duterte administration that is in favor of talks with China to get bilateral ties back on track. There have already been worries among some in Philippine and U.S. diplomatic circles that the government may give in to certain Chinese demands that could undermine Philippine interests or even the U.S.-Philippine alliance, in spite of its insistence that it will ensure that talks are in line with the verdict. Needless to say, it will be difficult for Washington to wholeheartedly support Manila’s talks with Beijing if it comes at the expense of U.S.-Philippine security cooperation or even the ruling itself. Though these fears may end up being overstated, Duterte’s personal suspicion of the United States and his eagerness to strengthen economic ties with China to advance his ambitious domestic agenda thus far mean one cannot rule this possibility out.

Second, the ruling could reveal the fragility of the informal diplomatic coalition that Washington has helped assemble in defense of the rules-based international order. In the administration’s view, bringing to bear the strength of this coalition following the verdict requires aligning policies and coordinating actions between forward-leaning claimants like the Philippines, intra-regional interested actors such as Japan, and extra-regional concerned parties including the United States, in a calibrated way so that capable outside actors can do their part without getting out ahead of the claimants themselves. It also requires at least a few actors who are willing to impose costs on China if necessary through diplomatic, military, and, if necessary, economic measures as well to demonstrate that this coalition is prepared to act on its words.

That is easier said than done. For one, the lack of regional activism following the verdict could throw off the balance within this coalition between regional and outside actors, thereby bolstering Beijing’s claim that external forces led by the United States are trying to stir up trouble in the South China Sea.

This is not merely an existential concern. ASEAN, which has traditionally been divided on the South China Sea issue, has found it especially difficult to speak with one voice thus far in 2016. Last month, the organization failed to adopt a joint statement in Kunming with Cambodia as well as Laos, this year’s ASEAN chair—countries with little interest in the South China Sea and a lot invested in their relationships with China—backing out of a previously agreed document. Ahead of the upcoming ASEAN foreign ministers’ meeting later this week, hopes have all but evaporated for a separate statement on the verdict in spite of a clear case for issuing one. If Southeast Asian foreign ministers are unable to at least adopt a joint communiqué with strong South China Sea language in support of the principles undergirding the verdict—along the lines of what their countries already signed at the U.S.-ASEAN Sunnylands Summit back in February—that would further undermine the balance that the coalition needs.

Beyond words, the lack of action from other allies and partners in U.S.-led initiatives could also pose a potential challenge to the fragile coalition. Though several of the coalition’s key members—most notably Japan, Australia, and the European Union—have already issued statements in support of the ruling to various degrees, the true test of their commitment to safeguarding the rules-based order will be their willingness to contribute to measures that seek to enforce it, if and when it is necessary—particularly if Beijing ends up charting a more assertive course post-verdict. Depending on how things end up playing out, this could include not just regular patrols and exercises, but also potentially more forward-leaning and controversial ones as needed such as joint FONOPs. Hesitance by the United States’ most capable partners to enforce the ruling would both expose the gap between the coalition’s words and actions as well as reveal Washington’s isolation.

Third, the ruling could also end up raising questions about U.S. credibility on the South China Sea issue. In the lead up to the verdict, the United States used a mixture of unilateral military actions, bilateral dialogue, and capacity-building efforts to clearly signal to China that certain provocative moves—including starting reclamation at Scarborough Shoal or declaring a South China Sea ADIZ—could trigger an even stronger American response. Nonetheless, China could still end up crossing these “red lines” in the next few months after the verdict, challenging the outgoing Obama administration to either risk heightened tensions with China during an election year or have its credibility undermined.

While there are a whole range of Chinese moves that could throw U.S. credibility into question, actions that affect the Philippines directly would constitute a particular problem for Washington given the fact that Manila is a treaty ally and the United States has been repeatedly touting its “ironclad” commitment to the alliance. China could begin dredging at Scarborough Shoal, which lies just 185 nautical miles from Manila and could give it radar coverage of several facilities recently agreed between the United States and Philippines under their new Enhanced Defense Cooperation Agreement (EDCA). Or it could impose a blockade on Philippine marines stationed on the BRP Sierra Madre at Second Thomas Shoal to prevent its resupply as it did in 2014, which could turn bloody. Though there remains some ambiguity in Article V of the 1951 U.S.-Philippine Mutual Defense Treaty, should there be an attack on Philippine troops, vessels, or aircraft by China in any one of these instances, a reasonable reading indicates that United States would be committed to respond.

If the Obama administration fails to respond decisively to the very actions it has deemed unacceptable so soon after the verdict, it would once again prove that might ultimately does make right in the South China Sea. It would give credence to the view among some Chinese officials that the ruling “amounts to nothing more than a piece of paper,” as former state councilor and top diplomat Dai Bingguo told an audience in Washington, D.C. earlier this month. It could also serve to further embolden China in the South China Sea and elsewhere, which could feed into how Beijing deals with the next U.S. administration beginning in January 2017.

Of course, these challenges are not insurmountable. If China determines that it has an incentive to provide a more conducive environment for the rolling out of its new economic initiatives to Southeast Asian states, we could see Beijing eventually moving towards a more restrained posture in the South China Sea after an initial period of heightened tensions. That would then pave the way for the constructive initiatives that Washington would like to see, be it resolving disputes or repairing ties with the Philippines or making tangible progress on a code of conduct.

And even if Beijing opts to continue on its more assertive course, claimants and concerned actors in the region and beyond can take initial steps to both raise the costs of Beijing’s non-compliance as well as to discourage it from pursuing provocative actions. If ASEAN is able to forge at least a base consensus around the ruling’s principles and U.S. allies and partners like Japan, Australia, and the Philippines can commit to a series of measures to enforce the ruling, that would help put some real teeth around defending the rules-based order. And if the United States determines that China is moving towards crossing a red line, there may be opportunities for Washington to either deter this course before it occurs or at least attempt to dissuade cooler heads in Beijing against adopting such actions.

Ultimately, the clarity provided by the Hague verdict is a double-edged sword: The reputational costs of violating the rules-based order are now higher, but the pressure for its adherents to enforce it has also increased. It is up to the concerned countries to both seize the opportunities it offers and overcome the challenges it poses.