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Foreign Policy

Emerging Consistencies in Philippine Foreign Policy Amidst Continuing U.S.-China Frictions

Apr 27 , 2017

Although critics often point to the apparent discrepancies and unpredictability in Philippine foreign policy as expressed by its chief architect, President Rodrigo Roa Duterte, several emerging consistencies can be gathered. In the same vein as other countries that opted not to spell out the specifics of their foreign policy strategy, especially on critical and sensitive issues, in order to have ample room for maneuver and negotiation, these incipient consistencies have yet to be formally articulated in a coherent form, more so applied in reference to a certain foreign policy priority. Although not definitive, an appreciation of some of these nascent consistencies can give one a better outlook of the continuously evolving Philippine diplomacy. Furthermore, beyond his infamous rhetoric which surely played a lot in getting him Times’ 2017 Most Influential Person Award, Duterte’s actions, by and large, resonate as regional responses to the brewing US-China tussle.

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Expanding economic ties with China

The first consistency is the desire to expand economic ties with China for obvious economic gains. With its achievements in infrastructure, manufacturing, agriculture, renewable energy, urban planning and development, poverty alleviation, technical and skills training, among others, expanding ties with China could have a transformative impact on the Philippine economy and society. Accelerating infrastructure spending, easing restrictions on foreign asset ownership to attract greater foreign investments, and promoting agricultural productivity and rural tourism are key components of the Duterte Government’s 10-Point Socioeconomic Agenda. There is an apparent recognition that cooperation with China can play a critical role in helping the country realize these goals.

At present, China, the world’s second largest economy, is the country’s second largest trade partner – its largest source of imports and third largest export market. In fact, if combined, Mainland and Hong Kong shares make China top Japan as the Philippines’ largest external market. Substantial state participation and influence in the economy and intense nationalism make good political relations a sound foundation for robust economic ties. State-owned enterprises can be easily mobilized to support government directives and millions of Chinese tourists could be easily enticed to visit a country with which China has witnessed blossoming relations with of late. In fact, the impact of improved relations was immediately felt – Duterte’s state visit to Beijing last October 2016 brought home $24 billion worth of loans and investments. In addition, post-state visit, $100 million worth of Philippine fruits were bought by China last year and just last March, 18 Chinese firms placed a further $1.7 billion purchase order for Philippine agricultural and mineral products in a deal described by Chinese Ambassador to the Philippines, Zhao Jianhua, as a first time transaction in ASEAN. Furthermore, it is expected that inbound Chinese tourist arrivals will breach the 1 million mark this year. Indeed, the limits of economic benefits that can be derived from the return of spring after an extended winter in the bilateral relations rests not on China, but rather on Philippines’ absorptive capacity.

The desire to expand commercial ties with China is motivated by the realization that China has already displaced other major economies as the top provider of economic goods for the region. In fact, based on 2015 ASEAN trade figures, the U.S. even comes fourth after Japan and EU in the rankings of Southeast Asia’s largest trade partners. After its withdrawal from the Trans-Pacific Partnership, the U.S. has yet to come up with a coherent economic agenda for the region to match, if not at least counterbalance, China’s unfolding Belt and Road Initiative and its supporting structures, such as the Asian Infrastructure Investment Bank and Silk Road Fund. So far, America’s Asia-Pacific engagement is heavy on security (e.g. North Korea, South China Sea) but remains hollow on economics, which is high in the priority of fast developing countries in the region. With an accomplished businessman in the White House, there was initial optimism that the U.S. will eventually resume an active economic profile in the region but worrying announcements about curbing immigration and job outsourcing/offshoring have only heightened concerns. Asian-Americans, including Filipino-Americans, like other immigrant communities, are anxious over Trump’s apparent position to discontinue Obama’s deportation deferment programs. Likewise, given considerably high regional production integration, Asian manufacturers and exporters are wary of the consequences of the U.S. addressing trade deficits with its economic partners.

Downplaying security ties with the U.S.

The second consistency is downplaying security cooperation with US, especially to the extent that it will affect the first consistency. Absent a robust regional economic agenda, engagement with the U.S. will tilt more towards security. As such, expectedly, regional countries will distance themselves from this engagement, if not keep such cooperation in low profile, so as not to antagonize their burgeoning economic relations with China. Despite all the attention that it is getting of late, especially after the dispatch of U.S. aircraft carrier USS Carl Vinson purportedly to send Pyongyang a strong message, North Korea’s nuclear and missile program is not high in the agenda of Southeast Asia. Freedom of commercial navigation, which remains unaffected despite recent daunting developments, is surely a shared regional interest, but not freedom of navigation for military ships and aircraft, which is fast becoming a theater for U.S.-China rivalry. The 2001 EP-3, 2009 USNS Impeccable, 2014 P8 Poseidon, and 2016 EP3 incidents form part of a growing list of U.S. surveillance or military signals gathering activities in waters and airspace near Hainan (which the U.S. considers to be international spaces) increasingly being challenged by China. These incidents only heighten perception that the South China Sea (SCS) disputes are migrating from a territorial and maritime dispute between six claimants to a major power showdown between the U.S. and China. Southeast Asia would want no part in this contest, especially if actual hostilities, should tensions spiral out of control, take place in their backyard.

The Philippines is actually not alone in downplaying security cooperation with the U.S. and exploring security relations with China. Thailand-U.S. longstanding military cooperation has been downgraded since the 2014 coup and U.S.-Malaysia military relations is likewise being tested by recent challenges in their bilateral relations (e.g. U.S. investigation of the 1MDB controversy which involves Prime Minister Najib Razak). Western criticisms (e.g. over Duterte’s vigorous anti-drug campaign, Thai military junta’s rule) are increasingly being taken by Southeast Asian governments as unwarranted interference in their domestic affairs. Cultivating security ties by way of joint military exercises and weapons acquisitions is a new dimension in Southeast Asia-China relations and is being driven by such factors as: 1) expanding the frontiers of cooperation beyond economics or to complement deepening economic cooperation; 2) sending a message to the U.S. that Southeast Asia has other options should it decide to diminish or withhold provision of regional security goods for expediency or political reasons; 3) engaging China in addressing shared regional security challenges, such as maritime piracy, and possibly invite it to moderate its assertiveness in the South China Sea.

While Duterte’s pronouncement of procuring Chinese and Russian firearms, as well as mulling military exercises with these non-traditional security partners, surprised many, other Southeast Asian states have already realized what he is still contemplating. Thailand held a joint air force (Blue Sky 2015) and naval/marine exercises (Blue Strike 2016) with China and purchased tanks, auxiliary vehicles and submarines from China. Malaysia has been conducting military exercises with China (Peace and Friendship 2014-16) and bought littoral mission ships from China in 2016. Indonesia has been conducting military exercises with China (Sharp Knife 2011-14) and had been jointly producing military assets with China (e.g. military transport vehicles and aircraft, rocket launchers and ammunition) in 2008 and missiles in 2011. Seen from this vantage point, the so-called Duterte phenomenon - notable pivot away from overreliance on the U.S. and warming with China - is in fact not a regional outlier, but a process that had already started even before he became President, although there is no question that he has emerged as one of its most emphatic champions. Although perceptions of China as a threat or a potential threat stay, it did not stop regional states from engaging China, even in the security domain. U.S. failure to halt China’s artificial island construction despite having forward deployed forces and assets in the region and perceived futility of its freedom of navigation operations (FONOPS) did not help shore up America’s faltering regional appeal, leading Duterte to remark about his separation from the U.S. saying that Washington has lost it.

Managing disputes with neighbors

The third consistency is downplaying territorial and maritime disputes that had long marred Philippines-China relations and left them underdeveloped. The West Philippine Sea (WPS) disputes had always been a thorn in cultivating constructive bilateral relations but reflecting on the experience of Malaysia and Indonesia suggests that stable and beneficial relations can thrive despite the persistence of unresolved disputes. This lends credence to the growing currency for dispute management rather than dispute resolution (e.g. international arbitration). Regardless of power asymmetry, diplomacy is still the preferred option exercised by disputants in defusing crises and incidents such as the 2014 China-Vietnam oil rig incident, incidents of Chinese vessels entering waters off Indonesia’s Natuna Islands and Malaysia’s Luconia Shoals, and Indonesia’s controversial sinking of foreign fishing vessels caught in its waters. This makes the Philippine decision to take China to arbitration in 2013 unprecedented in prevailing state practice in relation to the regional flashpoint. The much publicized arbitration stands in stark contrast to persistent efforts by disputants to downplay the disputes.

Vietnam lost the Paracels to China in 1974 and Johnson South Reef in 1988, both through military defeats, but since then accelerated and fortified its presence in the Spratlys and now occupies the most number of features in the contested sea. If there is any party that has been most aggrieved by China in SCS, it can only be Vietnam. But since then, Hanoi has opted for negotiations in defusing the 2014 oil rig row despite massive violent anti-China riots that killed scores of people, injured hundreds, and damaged properties. The Chinese state-owned energy company later pulled out the oil rig signaling a diplomatic victory for Vietnam. Hanoi also entered into joint resource development with Beijing over Tonkin/Beibu Gulf. A 2000 Vietnam-China Fishery Agreement, the precursor of which dates back 1957 and joint offshore oil and gas development based on Article VII of the 2000 Vietnam-China Maritime Boundary Delimitation Agreement attests to functional cooperation between the two neighbors. . Seen from this angle, Duterte’s decision to shelve, but not ignore, the landmark arbitral victory, put off plans to visit the Kalayaan Islands in WPS, and discuss prospects for joint development with China in the disputed sea do not necessarily signal a retreat despite his seemingly fatalistic tone. In fact, it could even be a deliberate ploy to use the same as leverages to exact maximum economic concessions from China, as well as contribute to regional confidence building, especially as Manila chairs the rotating ASEAN Chairmanship this year.

At the same time, improving relations with China can even provide the country the conducive atmosphere to upgrade and modernize civilian structures in the Kalayaans without sparking hostile response from its powerful neighbor. Despite China’s indisputable sovereignty claim over a wide expanse of SCS and pronounced opposition to activities by other claimants in the same, Vietnam, Malaysia, and Taiwan were able to consolidate their hold over their occupied features and, at the same time, continue their maritime economic activities of fishing, oil and gas extraction, tourism with little reported incident with China. This illustrates that having sound dispute management measures such as the fishery hotlines set up between Vietnam and China in 2013, alternative/backdoor channels such as the August 2016 Ramos-Fu-Ying Track Two meeting in Hong Kong that helped pave the way for Duterte’s October 2016 state visit and other high level visits and exchanges work and enjoy regional acceptance.

Value in ambiguity

Duterte’s language and demeanor are his persona and, although everyone may wish that he could improve in that department, failure to look beyond his delivery and bearing may lead to a prejudiced analysis of his unfolding independent foreign policy. His flip-flopping and inconsistencies are criticized for creating uncertainty, but such uncertainty is arguably necessary, if not imperative, given the evolving regional and global dynamics. If China remains America’s largest trade partner despite their differences, not least on the SCS, why can’t the Philippines follow suit and accelerate economic ties with China? If US can be ambiguous on their treaty commitment - whether the Kalayaans are covered under Article V and what constitutes “armed attack” under Article IV of the 1951 PH-US Mutual Defense Treaty – why should Manila be expected to be so earnest and committal? If other claimant states enjoy good economic and even brewing security ties with China despite the territorial and maritime spat, why can’t the Philippines? If other claimants are finding leverage and capitalizing on it in their dealings with China, why can’t the Philippines? If other claimants can free ride with the arbitration and yet continue quite diplomacy with China, what should stop Manila from using its very own legal victory to strike hard bargains from Beijing without sacrificing its interests in WPS? If President Trump’s regional policy remains hazy, why is there demand for its regional allies to be forthcoming? The Asia-Pacific is fast changing and it is fortunate that change come to the Philippines too. Ambiguities allow for flexibility and deliberate inconsistencies that can facilitate needed recalibration based on the circumstances.

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