RCEP, Maritime Cooperation And Achieving Peace In The South China Sea – Analysis

After more than two years since the signing the Regional Comprehensive Economic Partnership (RCEP) in November 2020, the Philippine Senate has finally ratified the deal on 21 February 2023. Though the Philippines was the last country to have ratified RCEP, it was still very timely in the light of the country’s approval of the Philippine Development Plan (PDP) 2023-2028 under President Ferdinand “Bong Bong” R. Marcos, Jr. administration.

The PDP is: “…a plan for deep economic and social transformation to reinvigorate job creation and accelerate poverty reduction by steering the economy back on a high-growth path. This growth must be inclusive, building an environment that provides equal opportunities to all Filipinos, and equipping them with skills to participate fully in an innovative and globally competitive economy.” (1)

According to the National Economic Development Authority (NEDA), RCEP supports the many objectives of the PDP for the Philippines to achieve sustained economic growth in the aftermath of the COVID-19 pandemic.

NEDA Secretary Arsenio M. Balisacan stressed that RCEP is “a vehicle that would drive our economy’s sustained growth through regional and global trade as well as through greater investment in strategic sectors”. (2) He also said that “RCEP will further enhance our market access, placing us at par with other RCEP-participating countries and the world’s largest economies such as China, Japan, and Korea, among others.” (3)

Balisacan also underscored, “Joining RCEP will enhance our market access for key agri-based exports, as partner countries agreed to lower tariff rates on Philippine exports. Non-participation or delayed RCEP ratification may result in foregone opportunities. We aim to promote greater openness, create a business-friendly environment, and provide a more stable and predictable system of trade.” (4)

As a free-trade agreement, RCEP offers an innovative approach to foster regional economic integration among 15 participating countries.

Currently, RCEP is the world’s largest free trade agreement (FTA) accounting for 31% of global Gross Domestic Product (GDP). The Asian Development Bank (ADB) reaffirms the value of RCEP when it describes this FTA as a “new paradigm in Asian regional cooperation”. (5) As such, RCEP also vigorously drives parties to strengthen maritime cooperation, especially those actively involved in the peaceful management of conflicts in the South China Sea (SCS).

To ensure free-trade among parties, RCEP aims to strengthen maritime transportation services in the region, especially in the SCS where all RCEP countries use for commercial navigation. The SCS is known as one of the world’s maritime superhighways. The United Nations Conference on Trade and Development (UNCTAD) says that around 80% of global trade by volume and 70% by actual value is transported by sea. Around 60% of the total global trade volume maritime passes through Asia, with the SCS carrying an estimated one-third of global shipping activities. (6) Thus, the maintenance of peace, friendship and cooperation in the SCS is essential for RCEP to achieve its goals.

The Philippines is a maritime nation known for being the second largest archipelagic state in the world. The country is situated at the crossroad of key international maritime trade routes that pass through the SCS and other vital sea-lanes of the Straits of Malacca, Lombok and Makassar as well as Sulu and Celebes Seas. As such, it geopolitically puts the Philippines at the crossroad of major-power rivalry, especially between its ally, the US, and its close and permanent neighbor, China.

The Philippines is georaphically at the heart of the Indo-Pacific providing the natural bridge of the Indian and the Pacific Oceans. Thus, harming or hurting the Philippines can break the heart of the Indo-Pacific. The Philippines is even called the “Pearl of the Orient Seas”. Hence, maritime security is an integral part of Philippine national security.

In the PDP 2023-2028, the Philippine government upholds the imperative of peace and stability in the SCS in order to provide a conducive environment for RCEP countries to strengthen the implementation of free-trade in the region. The Philippine government argues:

An escalation of the conflicts in the South China Sea would be devastating to the global economy as the area accounts for 12 percent of the world’s fish catch, and more than 30 percent of all global maritime trade passes through it. About 40 percent of the world’s liquefied natural gas shipments also traverse the South China Sea, which also contains deposits of about 11 billion barrels of oil and 190 trillion cubic feet of natural gas.14 Any potential maritime conflict poses a huge threat, as the world’s coastal regions contribute about USD1.5 trillion to the global economy each year—a number expected to double by 2030 to USD3 trillion based on estimates by the World Trade Organization (WTO). (7)

It is therefore in the interest of the Philippines to sustain existing efforts for the peaceful management of conflicts and pursuance of maritime cooperation the SCS through the implementation of the 2002 Declaration on the Conduct (DOC) of Parties in the SCS and the conclusion of the negotiation on the Code of Conduct (COC) in the SCS.

After two decades since its signing in 2002, the DOC has provided the foundational requirement for all parties to cooperate rather than compete in the SCS. In the DOC, all parties have the expressed intention to “consolidate and develop the friendship and cooperation” among them in order to promote “a 21st century-oriented regional partnership of good neighborliness and mutual trust” among them.

Towards this end, all parties in the DOC also decided “to intensify efforts to seek ways, in the spirit of cooperation and understanding, to build trust and confidence between and among them” through the following measures:

Holding dialogues and exchange of views as appropriate between their defense and military officials;
Ensuring just and humane treatment of all persons who are either in danger or in distress;
Notifying, on a voluntary basis, other Parties concerned of any impending joint/combined military exercise; and
Exchanging, on a voluntary basis, relevant information

The DOC was a landmark agreement in the SCS as parties committed to uphold the “duty to cooperate” in the SCS, with the expectations of economic and political gains. Pending “a comprehensive and durable settlement of the disputes”, all parties, specifically China and members of the Association of Southeast Asian Nations (ASEAN), have committed to pursue pragmatic maritime cooperation the SCS in the following functional areas:

Marine environmental protection;
Marine scientific research;
Safety of navigation and communication at sea;
Search and rescue operation; and
Combating transnational crime, including but not limited to trafficking in illicit drugs, piracy and armed robbery at sea, and illegal traffic in arms as well as international terrorism

Cooperation in the aforementioned functional areas identified by the DOC is essential for China and ASEAN states, which are all RCEP parties, to promote peace and prosperity in the greater SCS region. The DOC paved the way, set the tone, and framed the negotiations on the COC, which reaffirmed the principle of “duty to cooperate” in the SCS.

To bilaterally implement the DOC and to support the COC negotiations, the Philippines and China established the Bilateral Consultative Mechanism (BCM) in the SCS during the administration of then Philippine President Rodrigo R. Duterte. The BCM is an official mechanism for bilateral consultations between China and the Philippines to discuss various issues in the SCS affecting Philippines-China relations. The BCM aims not only to promote confidence-building measure but also to pursue preventive diplomacy that Marcos Jr administration needs to sustain in order to promote maritime cooperation and achieve peace in the SCS.

RCEP is an important international economic arrangement that can avoid war and facilitate the peaceful management of conflicts in the SCS through decisive maritime cooperation.

In the study conducted by Stanford University correlating economic and war data, it contends that the more trading partners a country has, the less likely it will be engaged in a war. (8) The study also underscores that “most countries tended not to go to war with trading partners” and that “the more trading partners a country had, in general, the fewer wars they had.” (9)

The great philosopher, Immanuel Kant, has already articulated three centuries ago that the “spirit of commerce sooner or later takes hold of every people” and, because “it cannot exist side by side with war”, commerce and trade “will lead nations towards peace.” (10)

By promoting trade among parties, RCEP is an enabler of maritime cooperation that can avoid war and promote peace and prosperity in the SCS. RCEP is also a game changer as it upholds good deeds that solidify free trade among parties.

Confucius says that “war is caused by blinded selfish human nature, but war disappears with the guidance of love, care and good deeds”. RCEP advances good deeds through peaceful trade and mutually beneficial commercial activities that intend to promote common development and shared benefits as well as common comprehensive, cooperative, and sustainable global security.