Squandering opportunity on Mischief Reef

Incredibly, territorial disputes between China and its neighbors over uninhabited islands threaten to become a flashpoint threatening peace in East Asia. While tensions have since cooled a bit, the Economist recently warned that "China and Japan are sliding towards war." Last August, large, angry, and violent protests broke out in dozens of Chinese cities against a decision by the Japanese government to buy several of the disputed islands (called Senkaku in Japan and Diaoyu in China) from a Japanese private citizen. Again this month, China sortied aircraft and ships near the islands, and Japan scrambled fighters in response.

Moreover, this is not China’s only maritime territorial dispute.  In the South China Sea, China, Brunei, Malaysia, the Philippines, and Vietnam pursue conflicting claims among the uninhabited shoals, islets, and atolls comprising Scarborough Shoal and the Paracel and Spratly Islands (including Mishief Reef). This is not a bloodless issue. In 1988, more than 70 Vietnamese sailors died in a naval clash with China near Johnson South Reef. Since then, China and the ASEAN states issued a 2002 joint declaration pledging not to use force to resolve their disputes and to avoid actions that would escalate them. However, no progress has been made toward settling the underlying disagreements, and the declaration was violated almost immediately.

Because of the United States’s bilateral defense treaties with Japan and the Philippines, we could be drawn into a conflict we do not seek. Moreover, we have an enormous stake in continued economic growth and prosperity in East Asia, which depends on peace. 

What is behind the strong passions surrounding groups of uninhibited rocks whose total land mass is less than five square miles? Fishing rights are at stake — and a cod war is not unprecedented — but it would hardly seem worth the risk between states whose annual trade stands at three quarters of a trillion dollars.

Oil and gas wealth is a stronger motivation. No one yet knows the extent of the resources buried beneath the East and South China Seas (in part because their ownership remains in dispute), but if Europe’s North Sea serves as a fair precedent, they could be worth trillions of dollars. 

Finally, nationalism compounds the problem. Unlike Europe, in East Asia, the wounds of World War II remain unhealed. Diplomatic rows or even riots are periodically caused by disputes over history text books or visits by politicians to shrines for dead military leaders.  Hence, the explosive anger last autumn causing protestors to attack Japanese cars and sushi restaurants, although they were owned by fellow Chinese citizens. 

How to head off a potentially catastrophic confrontation?  Five ideas will help.

First, all states must recognize that no single state can impose a solution, and every state exercises effective veto over exploitation of energy resources. A deep water oil rig can cost up to $600 million, yet can be sunk by a $20 million patrol boat. No commercial oil company, investor, or insurer would risk such a costly and vulnerable piece of equipment in a contested region where hostilities might erupt. Thus, East Asian nations effectively have a choice between continuing to wrangle over natural resources with no production, or reaching an agreement to divide the resources and jointly benefit from them. 

Second, all states in the region would do well to bear in mind that despite occasional nationalistic rhetoric, this is an economic question. These barren islands are not like the   West Bank or the Balkans, where centuries of human history and intermingled populations complicate the division of land. No country’s national heritage is at stake in this question — only economic benefits that cannot be exploited in the absence of an agreement. Therefore, all governments would do well to tone down their rhetoric about national rights and core interests in discussing the disputed maritime territories. Inflaming nationalist tendencies among citizens will make solving the problem more difficult, not less so.

Third, the disputants should accept that these matters cannot be settled solely by legal arguments or in court. Claims and counterclaims, along with contradictory old maps and sea charts, abound. Asserting that one interpretation of proper title to a territory is "indisputable" is pointless when other nations claim an equally "indisputable" title. Disagreements among nation states — except in narrowly defined areas in which they offer prior agreement to accept external dispute resolution, e.g. the World Trade Organization — are political matters and must be resolved by diplomacy and agreement, though perhaps aided by legal tools. 

Fourth, in contemplating ways to resolve this matter, the states involved should look to earlier precedents. In the late 1960s and early 1970s, Denmark, Germany, and the Netherlands used a combination of a ruling by the International Court of Justice and subsequent negotiations to resolve conflicting claims to North Sea continental shelf resources. The parties entered the negotiations realizing that no single state could claim the lion’s share of the benefits, and that resolving the matter to allow oil exploration to move ahead was in all parties’ interests. 

Harvard Professor Richard N. Cooper, observes that the neutral zone shared by Kuwait and Saudi Arabia may also serve as a precedent for resolving the East Asia maritime territorial disputes. Without resolving their disputed border, the two countries agreed to share the wealth from oil produced in the zone, which was created in 1922. Today, over 650,000 barrels per day are pumped from the region to both countries’ great benefit.

Fifth, the countries of East Asia should begin to heal the wounds of World War II. For example, China, Japan, South Korea, Russia, and the United States could agree on principles to guide their interaction, including, among other things, peaceful resolution of territorial disputes and joint development and management of regional resources (such as fisheries), and follow up with separate annual meetings of foreign, economic, and defense ministers to implement them.

Military conflict over the maritime territorial disputes in the East and South China Seas would be a senseless waste. China may see a tactical advantage in waiting to address these issues as its economic and military power grows, but allowing the disputes to fester risks the outbreak of war and squanders the opportunity to develop potentially rich natural resources. It also prevents nations in the region from working effectively together to solve other pressing problems. The bright prospects for peace and prosperity in East Asia should not be allowed to founder on Mischief Reef.