Last week a sense of optimism wafted out of the Bali meetings of the Association of Southeast Asian Nations. ASEAN and China agreed on “guidelines” for implementing their previously agreed 2002 Declaration on Conduct of Parties in the South China Sea (DOC).

Some players including China hailed this as a breakthrough. Others agreed with U.S. Secretary of State Hillary Clinton that “It was an important first step but only a first step” and that ASEAN and China should move quickly — even urgently — toward an actual code of conduct.

It is true that the guidelines reveal more by what they do not say than by what they do. Indeed, they lack specifics, timelines and enforceability. They do not specify what is in dispute and the practical focus is on nontraditional security issues like environmental protection, marine science and transnational crime.

Obviously agreement was difficult to achieve; hence the generalities, ambiguities, emphasis on confidence building and lacunae. Expectations were unreasonably high; from that standpoint, criticism is easy. Nevertheless, the negotiating process leading up to this unfairly — or at least prematurely — maligned outcome revealed ASEAN and the claimants’ behavior at their best.

There was a lot at stake. ASEAN and China needed to show that they could manage regional disputes more or less by themselves. They also needed to reassure the world that the South China Sea is safe for commerce.

In short, the capability, credibility and relevance of ASEAN security forums were at risk, as was the long-term hope of a Pax Asia Pacifica replacing the Pax Americana.

Behind the scenes, negotiations led by the current ASEAN chair, Indonesia, made considerable progress — a credit to the skills of the diplomats involved. Indeed, Indonesia demonstrated that it can lead not only the resolution of regional disputes but also Southeast Asia as a whole.

ASEAN made a major compromise by agreeing to drop a clause that would mandate that it form an ASEAN position before dealing with China on South China Sea issues. This gesture was important to convince China that the other claimants (Brunei, Malaysia, the Philippines and Vietnam) are not using ASEAN to “gang up” on it. China also deserves considerable credit. It had long resisted the draft guidelines and made a major compromise by agreeing to them.

Perhaps it saw the writing on the wall and feared that the disputes were pushing ASEAN toward the United States. Whatever the impetus, China succeeded by its rhetoric and behavior in reducing tension — at least for the time being.

Vietnam’s political courage and assertiveness were on full display challenging China at every turn, tit for tat. The Philippines also demonstrated political courage. But more important, it demonstrated that international law can help make relations more equal and give pause to powerful nations. Together with the involvement of the U.S., China was put on the political defensive.

Over the last year, a series of aggressive incidents involving Chinese patrol boats followed by soothing official statements had left many puzzled and concerned about a “bullying” China.

The incidents involved cutting of seismometer cables towed by a Vietnam- sanctioned survey vessel operating on Vietnam’s claimed continental shelf, and harassment of a Philippine-sanctioned survey vessel, as well as numerous alleged “intrusions” in the Reed Bank area claimed by the Philippines as part of its economic exclusion zone.

Worse, China responded to frenetic protests from Vietnam and the Philippines by warning that any exploration in the Spratly area without its consent is a violation of its jurisdiction and sovereignty. This real time link between its stark and sweeping position and its enforcement sent a chill down the spines of ASEAN claimants and drew U.S. attention.

The U.S., having confronted China and cleverly conflated the disputes with its concerns regarding “freedom of navigation” via Secretary Clinton’s speech at the ARF meeting in Hanoi in July 2010, was happy to help, at least verbally and with signals militaries understand.

Vietnam responded to China’s actions in kind with vitriolic rhetoric and military exercises matching those of China. The Philippines also broke all of China’s “rules.” It internationalized the issue by appealing to both the U.N. and the U.S. for help. It publicized the issue revealing details of the negotiations, and challenged China’s claim by suggesting that the jurisdictional issue be decided by the arbitration process provided by the 1982 Convention on the Law of the Sea, which they have both ratified.

The past year was supposed to have seen negotiations transform the DOC into an official, legally binding, enforceable code. But leading up to the summits, the situation looked likely to get worse.

Still planned are more Vietnam- and Philippine-sanctioned surveys by Western oil companies and even exploratory drilling in areas claimed by China. Clinton has warned that the unresolved issues threaten peace and stability in Southeast Asia.

Given this context and the rise in political tension, the positive outcome promotes hope. There is movement in the right direction — even if it is small and fragile. It is only one step of many necessary to truly put these Phoenix-like disputes to rest.

The alternative is too messy and miserable to contemplate. Although the interim product may be imperfect and incomplete, this crisis brought out the best in many of the countries involved. That bodes well for the eventual settlement of the disputes and for Asia’s future.

Mark J. Valencia, a former senior fellow with the East-West Center, is a maritime policy analyst with the National Bureau of Asian Research.

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