This commentary was originally published in TODAY on July 17, 2012.
The Association of South-east Asian Nation's (ASEAN) failure to issue a communique at the end of the ministerial meeting hosted in Cambodia last week shocked many.
Reports indicate the drafting floundered on the issue of the South China Sea where the sovereignty of different islets is disputed.
The Philippines wished to record that the matter had been discussed whereas Cambodia, which currently chairs the group, felt that any mention would compromise ASEAN neutrality. The claims in the South China Sea were never going to be resolved by a statement, however worded. As such, the quite unprecedented failure shows up not so much the struggle to deal with a sensitive issue but, rather, what it may suggest are more systemic concerns about divisions within ASEAN.
These come precisely at the wrong time, when the group needs to show unity and resolve to create an ASEAN Community by 2015. It also dents ASEAN's credibility as host for dialogues that span not just its own region but a wider footprint, like the newly created East Asia Summit.
THE CHINA FACTOR
Factors of division have been emerging over time. These relate not just to the South China Sea, but more broadly to the roles of the United States and China and such issues as the Mekong River and Myanmar.
The Obama administration's "pivot" to give more attention to Asia these last four years has been evident and has largely been well received. But this comes after more than a decade in which China has emerged as the best friend to many. Given the economic dynamics, there is a sense that China will not go away but will grow in importance. This is especially notable in Beijing's largesse to some in ASEAN.
Take Cambodia, the host of the failed meeting. Over the last decade, Beijing has provided billions for infrastructure, including the building for the Kingdom's Council of Ministers. In April, Chinese leader Hu Jintao made a four-day state visit and just a month before the ASEAN Ministerial meeting, a senior Communist party leader visited Phnom Penh with promises to "take strategic approaches to step up the bilateral cooperation to new heights".
Given that the US market remains its largest trade partner, Cambodia seems to be playing a risky game. Intended or otherwise, the failure at the Phnom Penh meeting is seen as favouring China.
Other ASEAN members have come to quite different positions. The Philippines has strengthened its US alliance as Manila asserts its claims to areas in the South China Sea.
Vietnam has tilted towards America and the recent visit by US Defence Secretary Leon Panetta to Hanoi raises the possibility for arrangements to host an American military presence at Cam Ranh Bay.
WHAT TO DO NOW
What can the small and medium sized states in ASEAN do, given these great power dynamics?
There are things beyond their control. ASEAN could breathe easier if Beijing and Washington recognise their interdependence and that the region is big enough for them both. But if the rhetoric of differences grows louder and it comes to push and shove, ASEAN will be in an invidious position.
Other things are hard but possible. For too long, individual countries' policies towards China and the US have been little discussed. Dialogue could help each ASEAN member understand the other's concerns and, from this, seek common positions. Agreeing upon anchor points about the critical relationships with these giants would help ASEAN maintain centrality.
Last comes what should be do-able and indeed ought to have been done at this last meeting. This is to agree on a form of words, a set phrase, about the South China Sea.
Critics will say that papering over differences will not resolve the issue. Of course not, but there are other uses. Think of papered up forms of words like the "one-China" principle in relation to Taiwan. While this is open to varying interpretations, it has helped frame a range of differences that is understood (but not conceded) by each party.
Not least, if ASEAN can reach such a form of words about the South China Sea, then its communiques need not be held captive to a single issue. Noting but setting aside what is unresolved, the group would then be able to go on to deal with the rest of its agenda, where consensus is possible.
PERFECT NEUTRALITY IMPOSSIBLE
ASEAN has achieved centrality as a kind of default position, and largely because great powers lack sufficient trust amongst themselves. There are, however, still necessary conditions to be of use in this role.
Perfect neutrality is impossible, when some of its members are formal allies with one power, or receive large amounts of high-profile aid from another. But open and healthy dialogue about the fullest possible range of issues is critical for ASEAN-led dialogues to remain relevant.
For this, each ASEAN member must be willing to keep the group's interest as a whole in view, and not focus solely on its bilateral ties with China or America. Otherwise ASEAN will not only fail to be neutral, but be ineffective and indeed neutered.