Deputy Asst. Secretary Michael H. Fuchs, Remarks at the Fourth Annual South China Sea Conference,” July 11, 2014

Good morning. I’d like to thank Ernie Bower and CSIS for organizing this conference. 

This is a timely conversation, and I understand that the discussions yesterday were informative and productive. It’s essential to have a wide range of perspectives as we look for creative solutions to the challenges we face in the South China Sea. 

In that spirit, today I’ll offer some practical suggestions for how the U.S. and the parties in the region can move forward to reduce tensions and set relations on a better path.

But first I’d like to take a step back and address the regional context surrounding this issue and U.S. policy in the region. We are all familiar with the dynamism of the Asia-Pacific. The trade numbers, the demographics, the transnational challenges – the statistics and the trends are clear and compelling. And they lead us to the inevitable conclusion that what happens there is increasingly important not only to the United States, but also to the world. 

That is why President Obama decided to rebalance to the Asia-Pacific. That is why we are continuing to modernize our alliances, invest in strengthening regional institutions, expand our trade and investment, deepen engagement with new and emerging regional partners, and why we continue to expand people-to-people ties and promote our values and universal human rights. 

And yet, despite our enhanced engagement and long-standing ties to the region, some are questioning and criticizing our policy. These criticisms come in all shapes and sizes. 

Some call alliances outdated. But these critics ignore the fact that U.S. alliances have served as the foundation for regional peace and security, providing the environment for countries to prosper and resulting in some of the world’s most remarkable growth stories, from China to South Korea to countries across Southeast Asia. Today, our efforts to modernize these alliances – including new agreements like the Enhanced Defense Cooperation Agreement with the Philippines and the U.S.-Australia Force Posture Agreement – will benefit the entire region.

Some call us “outsiders” and tell us not to intervene in regional issues. But they ignore that for decades the United States has been a Pacific power, integral to regional peace and stability, and that our interests are directly affected by what happens across the Asia-Pacific. They ignore an increased demand for enhanced U.S. engagement and presence from allies and partners across the Asia-Pacific who want us more deeply involved in the region’s future. 

And some say that our attention has been diverted by crises elsewhere. But the best demonstration of our how the rebalance continues to move forward despite competing priorities is that the United States – our people, our businesses, and our security presence – is woven into the fabric of the Asia-Pacific. As the numbers show – from trade to travel to student exchanges to the time and attention of our senior leaders and the placement of our resources – U.S. engagement in the region is increasing, and our efforts are bearing fruit. Of course, while the U.S. has been essential to peace and prosperity for decades, we can’t rest on our laurels. We must continue adapting to seize new opportunities and meet new challenges. 

We are working to seize new opportunities through trade deals like the Trans-Pacific Partnership, which we are looking to conclude soon, and the bilateral investment treaty negotiations with China, which we agreed to begin again last year. But while dynamic economic growth and trade deals bring prospects for jobs and growth in the U.S. and across the region, threats to progress remain. Growing provocative actions, increased military spending, strident nationalism, and rehashing of painful history make up a combustible mix that threatens the region’s stability and its future prosperity. 

These challenges highlight the need to strengthen the transparent, rules-based order and institutions that have helped the region thrive for decades. Everyone has benefited from this order, and everyone can continue to benefit, if we work together. 

That’s why the U.S. is investing in the institutions that bring the region together to advance common interests and strengthen norms of behavior. Open and inclusive multilateral forums are critical to upholding and enforcing international law and standards that help manage relations between countries and ensure a fair playing field for all. 

The Association of Southeast Asian nations is a key partner that sits at the heart of the Asia-Pacific's architecture. Especially since joining the Treaty of Amity and Cooperation in Southeast Asia in 2009, we have adopted an increasingly proactive role in working with and promoting ASEAN and related institutions, including by joining the East Asia Summit and holding annual summits with ASEAN. 

We believe strongly that ASEAN and other regional institutions such as APEC are the key forums where countries can have frank and open discussions about the region’s most concerning challenges, come together to forge solutions, and build habits of cooperation. The tensions arising from competing territorial and maritime claims in the South China Sea are a key test of the region’s institutions and their ability to uphold international law and resolve disputes peacefully. 

The situation in the South China Sea, no doubt, is complex. Six claimants, plentiful fisheries and potential hydrocarbon reserves, the growing presence of maritime law enforcement vessels, and hundreds of geographic features make for a dynamic situation. Moreover, many of these features are submerged and therefore not subject to sovereignty claims but are nonetheless a source of friction in the region. 

Now some may ask why, given the many areas of tension across this part of the world, small features in the middle of the sea are generating so much concern and so much attention. It’s because the way in which countries pursue their claims speaks to whether future disputes will be handled by the threat and use of force on the one hand or the rule of law on the other. It speaks to whether the same rules will apply to all claimants – big and small alike. And it’s because everyone inside and outside the region stands to lose if rules are devalued, dialogue breaks down, misreadings and misinterpretations multiply, and tensions spiral. 

Recent events in particular are of great concern. Incidents involving the coercion and the threat of force contribute to an increasingly tenuous situation that could affect not only the claimants, but the entire region and beyond. 

No claimant is solely responsible for the state of tensions. However, a pattern of provocative and unilateral behavior by China has raised serious concerns about China’s intentions and willingness to adhere to international law and standards. 

Provocative actions include efforts to assert claims in the South China Sea – such as its restrictions on access to Scarborough Reef, pressure on the long-standing Philippine presence at Second Thomas Shoal, and, most recently, the commencement of drilling operations in disputed waters near the Paracel Islands. 

While the United States does not take a position on the sovereignty over land features in the South China Sea, we have a strong interest in the manner in which countries address their disputes and whether countries’ maritime claims comport with the international law of the sea. 

International law, not power or an ambiguous sense of historical entitlement, should be the basis for making and enforcing maritime claims in the South China Sea.

The ambiguity of some claims, such as China’s nine-dash line, and recent actions in disputed areas heighten regional tensions and inhibit the emergence of cooperative arrangements to jointly manage resources. They undermine possible resolutions to the overlapping disputes.

As a Pacific power with a clear national interest in how these disputes are addressed, the United States is working to lower tensions and help peacefully manage these disputes. First, we have communicated our growing concerns – from the President down – to the Chinese very clearly, both in public and in private – most recently in the Strategic Security Dialogue and the Strategic and Economic Dialogue that were held in Beijing earlier this week. U.S. concerns are also regularly expressed at the highest levels to other claimants, and we consistently encourage all claimants to clarify their claims and base their claims on land features in the manner set out under the international law of the sea, as reflected in the Law of the Sea Convention. Others have also raised their concerns, as evidenced by recent statements from ASEAN and the G-7. 

Second, we are working with ASEAN and the international community to help put in place diplomatic and other structures to lower tensions and manage these disputes peacefully. We are reinforcing the importance of exercising restraint, lowering rhetoric, behaving safely and responsibly in the sky and at sea, and resolving the disputes in accordance with international law. This includes building habits of cooperation through mechanisms like the ASEAN Regional Forum and the Expanded ASEAN Maritime Forum, where we are promoting concrete multilateral cooperation on everything from ensuring the safety of seafarers to working together to respond to oil spills. 

Third, the administration has invested considerably in the capabilities of our partners in the maritime domain. For instance, last December Secretary Kerry announced an initial commitment of $32.5 million in new regional and bilateral assistance to advance maritime capacity building in Southeast Asia. Including this new funding, our planned region-wide support for maritime capacity building exceeds $156 million for the next two years. 

Fourth, enhanced U.S. presence and posture in the Asia-Pacific as a result of the rebalance continues to help ensure regional stability and deter conflict.

And fifth, we continue to urge all parties to use diplomatic means, including arbitration or other dispute resolution mechanisms, to address these issues. This includes encouraging ASEAN and China to quickly complete a meaningful Code of Conduct. An effective Code of Conduct would help reduce tensions by creating crisis management tools to address contentious issues as they arise. 

In the meantime, China and ASEAN already committed under the 2002 Declaration on the Conduct of the Parties in the South China Sea to avoid activities that “would complicate or escalate disputes and affect peace and stability.” 

However, based on the rhetoric we’ve seen from claimant states, there isn’t a consensus or definition of what kinds of activities complicate or escalate disputes. 

Recent incidents highlight the need for claimants to be transparent about their respective activities in disputed areas and to reach a shared understanding on appropriate behavior in these areas. As such, we are urging China and ASEAN to have a real and substantive discussion to flesh out elements of the Declaration on Conduct that call for self-restraint. 

We have called for claimant states to clarify and agree to voluntarily freeze certain actions and activities that escalate the disputes and cause instability, as described in the DoC. Such commitments would help to lower tensions and expand space for peaceful solutions to emerge. They would be a strong confidence-building measure as more difficult details are worked out in the Code of Conduct negotiations. 

Deciding on what elements would be included in a freeze would ultimately be up to the claimants, but there are a number of different types of commitments that could be included in such an agreement and would be relatively easy for the claimants to agree to. 

To start, claimants could recommit not to establish new outposts. This is already in the DoC and is an easy first step. More important, claimants could commit not to seize features that another claimant has occupied since before the November 2002 Declaration on Conduct was signed. 

Construction and land reclamation by claimants have been another constant source of tension. Claimants could clarify what types of alterations are provocative and what are merely efforts to maintain a long-existing presence in accordance with the 2002 status quo. For example, alterations that fundamentally change the nature, size, or capabilities of the presence could fall under the “freeze,” whereas routine maintenance operations would be permissible. Finally, claimants could agree to refrain from unilateral enforcement measures against other claimants’ long-standing economic activities that have been taking place in disputed areas. 

All of these measures that I have listed would more clearly define the type of activities already suggested by the DoC, to which the parties have already committed. And the agreement would not affect any party until all claimants had agreed to abide by its terms. Moreover, if adopted, the freeze would not be prejudicial to the resolution of competing claims. The freeze would simply halt efforts to reinforce claims, pending their resolution.

Exercising self-restraint via this type of voluntary freeze would create a conducive and positive environment for negotiations on a China-ASEAN Code of Conduct and dramatically lower the risk of a dangerous incident. This would benefit all concerned parties. We make this suggestion as an idea to spark serious discussions about ways to reduce tensions and address the disputes; the claimants themselves should get together to decide the parameters of a freeze. 

To conclude, the United States is a Pacific power and plays a central role in ensuring regional peace and prosperity. And while we are not a claimant in the South China Sea, the actions of the claimants in the South China Sea are affecting everyone in the region and beyond, and therefore we all have roles to play in tackling this challenge. 

I hope that the next month leading up to the ASEAN Regional Forum will see real progress on regional efforts to promote the peaceful resolution of disputes in the South China Sea, and I have outlined some specific steps to that end. It’s high time for the region to have a robust discussion on tangible ways to de-escalate the current dispute, and hopefully some of these ideas can help begin that 

Thank you and I’ll be happy to take a few of your questions.