ASEAN Summit and East Asia Summit: Trade Talks, South China Sea

Updated On: Nov 21, 2012
This week saw the conclusion of several meetings in Phnom Penh, Cambodia, hosted by ASEAN - including the ASEAN Summit and East Asia Summit. Leaders announced the official launch of negotiations to create a new FTA between ASEAN and its partners, the Regional Comprehensive Economic Partnership. Separately, US President Barack Obama held a meeting on the sidelines of the summits regarding another regional trade grouping, the Trans-Pacific Partnership. China also held meetings with South Korea and Japan on a possible trilateral FTA between the countries. The contentious territorial disputes in the South China Sea were also brought up, with Cambodian Prime Minister Hun Sen having to amend a statement after objections from other countries.
The ASEAN Summit is the highest-level meeting of the Association of Southeast Asian Nations (ASEAN), bringing together the leaders of the 10 member countries. The East Asia Summit, hosted by ASEAN, is the region's premier forum for discussing key issues, involving not only ASEAN but countries outside the grouping such as the United States, China, Japan, South Korea, India, Russia, Australia and others.
ASEAN Community to be created by December 2015
At the ASEAN Summit, it was confirmed that the ASEAN Community will now be launched at the end of 2015, by 31 December, rather than in January 2015 as originally envisioned - a delay in the grouping's plans. In his opening speech, Cambodian Prime Minister Hun Sen said: “Realizing the ASEAN Community by 2015 should remain our top priority."
Mr. Hun Sen stressed that governments in ASEAN need to formulate necessary policy measures to be implemented before 2015 to achieve economic integration, including lowering tariff and non-tariff barriers, investment liberalization, connectivity and transportation, small and medium enterprise development, as well as labour mobility and other regulatory reforms.
Speaking in the plenary session, Singapore Prime Minister Lee Hsien Loong said it is imperative that member countries meet the 2015 target, otherwise ASEAN's credibility will be affected and its people's hopes will be dented.
ASEAN Launches New Free Trade Agreement Negotiations
ASEAN is also expanding cooperation with countries outside the grouping. On Tuesday, at the East Asia Summit, leaders officially launched formal negotiations to create a new wide-ranging free trade pact - the Regional Comprehensive Economic Partnership (RCEP), bringing together ASEAN and its ASEAN+6 partners,  China, India, Japan, South Korea, Australia and New Zealand. The six countries already have existing free trade agreements (FTAs) with the ASEAN grouping.
The RCEP will involve nearly half the the world’s population, with its members possessing and a combined GDP of about US$19.78 trillion (S$24.2 trillion) based on 2011 figures. This would make it the world's largest FTA. Talks on the RCEP will start early next year and are targeted to conclude by 2015.
Analysis: A bright spot at the Asean Summit [Bangkok Post, 19 Nov 2012]
Trans-Pacific Partnership
The RCEP has been compared to another prospective regional free trade grouping, the Trans-Pacific Partnership (TPP). Unlike the RCEP, the TPP involves Latin American countries and the United States, but it does not include China.
On the sidelines of the East Asia Summit, US President Barack Obama also convened a meeting on the TPP. Based on an existing agreement between Brunei, Chile, New Zealand and Singapore, the TPP negotiations also involve the US, Australia, Peru, Vietnam, Malaysia and Mexico. Others like Japan and South Korea have also expressed interest joining the TPP.
In comments reported by the New Zealand media, New Zealand Prime Minister John Key commented on the TPP and RCEP talks. New Zealand is involved in both processes. "Our basic proposition is we welcome the RCEP talks but TPP is the big game for us at the moment," he said.
However, Mr Key said it was important to get into the RCEP at the ground floor. "You never know how these things are going to play out, so it is always possible that TPP falters and then RCEP becomes the significant trade agreement. Hopefully it doesn't happen with TPP, but you never know."
Report: NZ joins rival trade deal as US ups ante [New Zealand Herald, 20 Nov 2012]
China, Japan and South Korea hold FTA Talks
Separately, China has held talks with Japan and South Korea on the sidelines of the East Asia Summit, about creating a new FTA between the three countries. The countries agreed to launch negotiations on a trade pact in May this year, but the initiative has been overshadowed by territorial tensions over disputed islands.
Chinese Premier Wen Jiabao met South Korean President Lee Myung-bak in Phnom Penh. The Chinese and Japanese leaders did not meet, but ministerial-level talks took place between China's Commerce Minister Chen Deming and Japanese Trade Minister Yukio Edano.
"The FTA between China, Japan and Korea is an important vehicle towards broader integration of trade and economy in this region," a Chinese spokesman told reporters.
Countries Affirm Commitment on South China Sea
Meanwhile, ASEAN has renewed its commitment to an existing approach for resolving territorial disputes in the South China Sea, according to Cambodian Prime Minister Hun Sen.
In a statement as this year's ASEAN Chairman, Mr Hun Sen said the 10-member bloc pledged to "fully and effectively implement" the Declaration of Conduct, a framework first agreed in 2002 that sets out broad principles on conflict resolution for the South China Sea. The declaration acts as a precursor to a legally binding Code of Conduct for the disputed waters, which countries are trying to reach.
At the Phnom Penh meeting, some advocated setting up a hotline for countries using the seas to notify each other of their activities in advance, to minimise the risk of flare-ups. 
Mr Hun Sen's statement comes after officials from other ASEAN countries chided their host yesterday for apparently taking China's side in the dispute. Mr. Hun Sen said ASEAN had agreed not to internationalise the issue.
However the Philippines said it had not agreed to this, and other countries, including Singapore, Brunei, Indonesia and Vietnam noted that an early draft of the ASEAN Chairman's statement had misquoted leaders' discussions. According to reports, Mr. Hun Sen's statement was redrafted following the objections.
The developments are a reminder that the waters remain a potential flashpoint. In July, an ASEAN meeting ended without issuing a communique for the first time in the grouping's history, over differences on the South China Sea.
Chinese Premier Wen Jiabao tried to play down the South China Sea tensions and other maritime disputes, when he spoke at the East Asia Summit and other meetings in Phnom Penh, 
China disapproves of any attempt at the summit to highlight territorial and maritime disputes and exaggerate tense atmosphere, Mr. Wen said. According to Mr. Wen, China would rather focus on constructive efforts to promote cooperation in the region.
However in response to questions, Mr. Wen did reiterate that China attaches importance to the peace, stability, free navigation and security in the South China Sea. Mr. Wen said free navigation and security are fully guaranteed in the sea, and China hopes that the international sea routes across the South China Sea would be better used as the world economy recovers.
Mr. Wen added that he had conducted fruitful discussions with leaders of ASEAN countries, regarding possible talks on the drafting of a legally binding Code of Conduct in the South China Sea.
In comments at the East Asia Summit, US President Barack Obama also reiterated the US commitment to the maintenance of peace and stability, respect for international law, unimpeded lawful commerce, and freedom of navigation in the region. He encouraged countries to make progress on a binding Code of Conduct in the South China Sea to provide a framework to prevent conflict, manage incidents when they occur, and help resolve disputes. 
Fact Sheet: East Asia Summit Outcomes [White House, 20 Nov 2012]
Some commentators believe China's new leaders may be moving closer to resolving disputes over the South China Sea at the regional level rather than via separate bilateral negotiations - which China previously favoured.
According to Professor Xiang Lanxin, who chairs international affairs studies at Shanghai's Fudan University, Beijing's outgoing leaders miscalculated how other countries would respond to broader Chinese territorial claims. He expects China's new leaders will appeal less to nationalism over the South China Sea, and also move away from claims that the US is a declining power.
Analysis: China Might be Moving Closer to ASEAN on South China Sea [Voice of America, 20 Nov 2012]