US is bringing storms to Apec and ploy in South China Sea

Stirring up a storm

US is bringing storms to South China Sea

The 2015 Asia-Pacific Economic Cooperation (APEC) meeting starts in Manila, the Philippines on Wednesday. The suspense is to what extent the US will foist the South China Sea disputes into this economic and trade meeting. Manila has made clear that territorial disputes will not be included on the agenda, but Washington is not resigned to letting it go, but apparently will bring forth the issue on the sidelines of the meeting.

Compared with the horrible terror clouding Europe, the bone of contention in the APEC meeting - the South China Sea disputes - is unworthy of equal attention. France has shut its borders, and several European countries and half of US states are considering whether to shun Syrian refugees. Chaos and turbulence caused by relentless wars continue in the Middle East, and with the path of fleeing blocked, hatred and resentment among the refugees will thrive.

Many believe the US should assume the primary responsibility for the turmoil in Europe. The US has managed to keep terrorism away from of its own turf after rounds of strong interventions in the Middle East with the aid of its European allies after the 9/11 attacks. However, unable to extend their reach to American soil, terrorists have sabotaged Europe time and again, from Madrid to London and recently, Paris.

Now, Washington sets its sights on the South China Sea. It is trying to provoke regional tensions like it did in the Middle East by waving a larger banner reading "pivot to Asia."

The West has been eager to fan the flames everywhere, but excused themselves by claiming they are not cause of the tension.

The question is whether the South China Sea is heading toward turmoil. If it is, the region will probably be doomed. The raging waves in the South China Sea, argued some analysts, are also likely to jeopardize Washington's interests, but compared with the much greater threat and dangers a turbulent South China Sea poses to China, Washington might be willing to take the risk.

The South China Sea is not a powder keg, because countries around the sea have established a community of shared destiny in terms of development. This could be a cushion against aggression in territorial rows. No claimant is willing to head for a showdown in the South China Sea. Tension surrounding China's reclamation of islands in the sea is abating, stretching the elasticity of the other claimants in dealing with the territorial disputes.

Washington is in the middle of instigating more tensions and accepting China's expanding leverage in rule-making, albeit it has launched vocal protests and flexed its muscles by sending warships in the sea.

China is gaining the upper hand in directing the South China Sea issues, which is a guarantee that the region won't be out of control due to Washington's instigation.

For the public good of the entire region, China should exert restraint over Washington's mischief. - Global Times

US ploy in South China Sea bound to fail



President Xi Jinping’s visit to the Philippines for the Asia-Pacific Economic Cooperation meeting from Nov 17 to 19 has quelled speculations that the maritime disputes with the host nation could make him decide otherwise.

Last week Philippines President Benigno Aquino III assured visiting Chinese Foreign Minister Wang Yi that the APEC meeting would focus on Asia-Pacific regional economic cooperation without raising the disputes in the South China Sea, as most members including China had agreed. But the US State Department has hinted that the South China Sea issue could be raised during the meeting despite Manila’s efforts to prevent the agenda from deviating from free trade and sustainable growth in and common prosperity of the Asia-Pacific region.

As the world’s second-largest sea-lane that connects the Indian Ocean and Pacific Ocean, the South China Sea is of great strategic importance to all countries in the region, as well as the US and European countries.

Nearly 80 percent of global trade depends upon maritime transportation, and about one-third of it is carried out through the South China Sea, which sees the passage of at least 40,000 ships a year. The number of oil tankers that sail through the Strait of Malacca, a critical passage through regional waters, is almost three times that of the Suez Canal and five times of the Panama Canal. Two-thirds of the global trade in liquefied natural gas is also conducted through the waterway.

China has more stakes that any other country in safeguarding peace and stability in the South China Sea, because it is a major channel of its global economic network. So ensuring smooth transportation (of energy sources) and navigation through the South China Sea is not only conducive to the shared interests of all Asia-Pacific economies - such as China, the US, Japan, the Republic of Korea and the Association of Southeast Asian Nations - but also economies elsewhere.

China passed the Law on the Territorial Sea and the Contiguous Zone in 1992, and the Law on the Exclusive Economic Zone and Continental Shelf seven years later. It ratified the United Nations Convention on the Law of the Sea in 1996 and publicized the territorial baseline of its mainland and Xisha Islands.

True, it is yet to disclose the territorial baseline of its Nansha Islands, but that does not nullify its legal rights in the surrounding waters, including territorial sea, exclusive economic zones and continental shelf. This makes the entry of US guided-missile destroyer USS Lassen into the waters near China’s islands in the South China Sea last month a violation of international law.

The US’ attempt to justify its action on the pretext of “freedom of navigation” is a rather clumsy argument that ignores some specific clauses in international law, for instance, innocent passage in territorial seas, transit passage in straits used for international navigation, and sea-lane passage through archipelagoes.

Also, the freedom of navigation clause in international law is neither unconditional nor beyond international regulations. Freedom of navigation can neither be above an affected coastal state’s laws and rights in the exclusive economic zones nor can it override other countries’ interests in the high seas.

Washington’s recent provocative moves have infringed upon Beijing’s maritime sovereignty and security in the South China Sea, the United Nations Charter as well as international law. They were also intended to show the US’ military muscles on the pretext of practicing freedom of navigation.

But China is not one to give in when it comes to its territorial, maritime and security interests, and the US is unlikely to succeed in its designs by instigating ASEAN countries to challenge China’s maritime rights in the South China Sea.

The author is deputy director of the China Institute for Marine Affairs attached to the State Oceanic Administration.

By Jia Yu (China Daily)

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TPPA debate will continue although concluded

Video: http://t.cn/RyEoAkLvhttp://english.cntv.cn/2015/10/09/VIDE1444344482352696.shtml



FINALLY, the negotiations on the Trans-Pacific Partnership Agreement have concluded. But that’s not the end of the story.

It will be many more days before the text is made public. Until then, there will still be so many questions unanswered.

Enough is known, from media reports and some leaked texts and analyses, to make some preliminary comments.

Firstly, trade is only one part of the TPPA. As important, or more important, are other issues including investment, intellectual property, government procurement, state-owned enterprises, labour and environment.

These other issues are at the heart of the country’s socio-economic structures and policies.

On these issues, the TPPA may have problematic elements for Malaysia. The Malaysian negotiating team has been fighting to lessen the adverse impacts of the main proposals.

It says it won concessions. But what these are, whether they are enough, and the effects are still not clear. What is clear is that “policy space” (a country’s freedom to formulate its own policies) would be very significantly narrowed as a result of the TPPA.

On intellectual property, the blow is perhaps the most obvious. Most patents filed in Malaysia are owned by foreigners. So when patent laws are made stronger, it will benefit foreigners who are the patent holders.

The enhanced monopoly given to patent holders will have adverse effects on Malaysian consumers who will have to pay higher prices and Malaysian companies which cannot make or import generic versions during the patent term.

The renowned medical group, Doctors Without Borders (MSF), condemned the TPPA as the “worst trade agreement for access to medicines”. Patients and treatment providers in developing countries will be the TPPA’s big losers as it will raise the prices of medicines by extending the monopolies enjoyed by the big drug companies and further delaying price-reducing generic competition, according to MSF.

The term of the patent may be lengthened (by adding time taken to register the medicine or approve the patent). Data exclusivity is to be granted for five years (or possibly for more than that, for the new drugs known as biologics), during which the generic companies are not allowed to rely on the test data of the originator firm.

On investment, the TPPA opens the road for foreign companies to be treated as well or better than locals, thus giving them rights of entry and ownership, and free transfer of funds, while prohibiting the host state from imposing performance requirements such as local content, technology transfer and joint ventures.

The TPPA also contains the investor-state dispute settlement system (ISDS), which enables foreign investors to sue the Government in an international tribunal.

Changes in government policies can lead to claims that this is unfair treatment and the foreign investor can ask for compensation for loss of expected future profits.

According to press reports, the TPPA has some safeguards such as diluting the ability of companies to make frivolous claims. Exactly what these are, is not known. The ISDS in any case remains intact as a powerful tool for foreign investors and puts Malaysia in a defensive position.

On government procurement, the space that Malaysia has had to make policies on how the Government does its procurement will be curbed. The preferences given to locals will now give way to national treatment for foreign companies.

Malaysia has been negotiating for more exceptions in terms of the “threshold” of level of expenditure or project value where preferences for locals can still be given, and an exception for bumiputra policy. Details of the final agreement are still not known.

On state-owned enterprises (SOEs), the TPPA will impose disciplines and rules on how these SOEs operate, the subsidies they can or cannot get, and their need to be non-discriminatory when purchasing materials (they cannot give preference to local companies).

The advocates of the SOE chapter seem to want to curb the advantages that SOEs may have, and enable the foreign companies to more effectively compete and take some of their market share. Malaysia has also been fighting for exceptions for some of its SOEs. The final outcome of this is not yet known.

Investment policy, government procurement, SOEs and access to medicines are right at the heart of Malaysia’s political economy and socio-economic structures.

Policies that have been at the centre of the country’s economic and political development have now to be defended as exceptions and flexibilities, and there is a limit to what the other TPPA partners will accept.

The chapters on these issues are bitter pills to swallow and the debate will continue on whether they are worth swallowing.

The direct trade aspects of the TPPA should have such enormous benefit that they more than offset the disadvantages of the other issues. Otherwise, why join the TPPA?

However, Malaysia’s tariffs are on average higher than those of the United States, the main country with whom we do not yet have a Free Trade Agreement.

If tariffs go to zero through the TPPA, Malaysia will thus have to cut its tariffs by more than the US. Whilst we may gain extra exports through the TPPA, we will also have to import more. There is no guarantee that the TPPA will lead to a better trade balance, and there could be an opposite result.

The debate on the TPPA will intensify now that the negotiations have ended. The text should be made available as soon as possible, so that the discussions can be based on the agreement itself. After the TPPA, it will take another two years for the agreement to be ratified and come into force.

Thus, the TPPA is not a “done deal” and the real debate may only be beginning now. It is unfortunate that till now the text is not available.

BY MARTIN KHOR

Martin Khor (director@southcentre.org) is executive director of the South Centre. The views expressed here are entirely his own.

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