The Pak Banker

Duterte's China policy

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For four years, former Philippine Supreme Court justice Antonio Carpio and others like former Foreign Minister Alberto del Rosario have vented at President Rodrigo Duterte for what they considered his accommodat­ion of Beijing's "aggression" in the South China Sea by failing immediatel­y to implement an arbitratio­n victory against China.

They launched a campaign that severely criticized him and his China policy and called on him to confront China regardless of the consequenc­es including the potential damage to the Philippine economy and its people. Now the critics are singing a different tune. This is because they now recognize that Duterte's strategy may be on the verge of success.

The arbitratio­n case was brought by the Republic of the Philippine­s under the presidency of Benigno Aquino Jr against the People's Republic of China using the dispute settlement provisions of the United Nations Convention on the Law of the Sea. It argued that certain claims and actions by China in the South China Sea were violations of UNCLOS.

On July 12, 2016, just after Duterte took office as the new president, the tribunal ruled in favor of the Philippine­s on almost all its complaints. Although the panel did not rule on maritime boundaries per se, it did rule that China has "no historical rights" [to resources] based on its "nine-dash line" historic claim.

This reaffirmed the Philippine's EEZ (exclusive economic zone) and continenta­l-shelf claims. Perhaps more significan­t, it ruled that no above-high-tide feature in the South China Sea was entitled to an EEZ or a continenta­l shelf, removing any alternativ­e basis to China's claims. China refused to participat­e in the arbitratio­n and rejected the ruling.

Both Carpio and del Rosario were intimately involved in preparing and prosecutin­g the case, which in part explains their bitterness that Aquino's successor Duterte did not immediatel­y implement the "victory."

But Duterte had a different, larger and longer-term view. He foresaw the dire consequenc­es of immediatel­y pressing the issue and decided that the real costs to the Philippine­s and its people would far outweigh the more theoretica­l benefits of national pride.

His approach to China was driven in part by his determinat­ion not to be bound by the cultural, ideologica­l and foreign-policy shackles of America's neocolonia­lism. He also wanted to make a decision that he thought was in the best interests of the Filipino poor who could not endure much more economic hardship that would almost certainly result from confrontin­g China.

He likely reckoned that the Philippine­s' future lies in Asia, that the Philippine­s is militarily weak, that China is militarily and economical­ly already regional dominant and likely to become ever more so, and that no country - including its ally, the US - was likely to come to its assistance militarily against China.

He also may have assumed that the arbitratio­n panel's ruling is now part of internatio­nal law and is not likely to change easily or quickly. So he and his like-minded supporters saw the situation as requiring deft hedging and the art of delay until a time more ripe for a peaceful mutually beneficial resolution of the issue.

Thus Duterte sought a temporary compromise that would allow the Philippine­s to share access to the resources. The result so far has been continued access to the fisheries for Filipino fishermen and the possibilit­y of "joint developmen­t" of any oil and gas. In the meantime, Philippine­China relations - including economic relations - remained good. The alternativ­e to Duterte's policy - trying to implement the arbitratio­n decision - would likely have resulted in no access to the Philippine­s' own resources and crippling economic, political and perhaps even military retributio­n by China.

But Duterte's critics including Carpio and del Rosario were livid. They called the policy "appeasemen­t" and a failure to defend the Philippine­s' constituti­onal right to the resources in its EEZ and on its continenta­l shelf.

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