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07 December 2016 | James Waugh, LexisNexis Capital Monitor

Building the Pacific Peace to strengthen the rule of law

The disputes in the South China Sea provide the Asia-Pacific with an opportunity to pursue institutional renewal aimed at strengthening the rule of law. A major issue now facing the region is the standing of the Permanent Court of Arbitration (PCA) and the legitimacy of related NATO-based legal institutions as arbitrators of disputes in the Asia-Pacific. Philippines v. China will not be implemented short of a major conflict and does little to strengthen the rule of law in the region. Indeed, the ruling would have caused disruption and outrage no matter the outcome. In the event it lost the arbitration the Philippines would most likely have drawn the region’s attention to the PCA’s colonial foundations.

But we should not let history prejudice us against the positive story behind the PCA and similar NATO-based courts, all of which have made a substantial contribution to the rule of law in the North Atlantic and around the world. These courts should be respected generally and nations in the North Atlantic should seek to enhance the rule of law in that region. However, the inflexible expansion of North Atlantic institutions and legal jurisdictions to cover the entire international system is increasingly anachronistic and now serves to delegitimise court rulings and the rule of law in the Asia-Pacific.

Senior diplomats from the United States, including the current Secretary of State, have recently suggested to their Chinese counterparts that it is time to move beyond the South China Sea dispute. Meanwhile the Philippines has made moves to revise its military relationship with the United States and move closer to China, despite the celebrations that surrounded the PCA ruling when the arbitration was announced in the Philippines’ favor. The Chinese have little interest in disrupting trade routes in the South China Sea and favour a peaceful resolution.

The diplomatic situation in the South China Sea has clearly moved on, meaning the main consequence of the PCA ruling is to provide the United States’ more belligerent allies with a legal justification for war against China. Comparatively minor disputes in the South China Sea should not be allowed to threaten the rule of law across the Asia-Pacific. Rather, the controversy surrounding this ruling could provide an opportunity to reassess the legal institutions required to resolve these disputes. What emerges is a clear need for new legal frameworks to resolve the problems faced by the Asian side of the Pacific.

The form such legal frameworks or institutions would take needs to be debated because the current expectation that nations in the Asia-Pacific will accept resolutions from essentially NATO courts is untenable. As the situation stands, regional actors are expected to accept the rulings of Western courts established over a century ago by mixtures of American billionaires, European aristocrats and Russian Czars to resolve North Atlantic problems. Crucially the PCA and related courts were rebuilt or founded alongside the NATO alliance in the aftermath of the Second World War. The North Atlantic was then the centre of global order and any agreement among its states could be imposed on the Asia-Pacific without due process or diplomatic consultation. In this same period China was in the middle of a brutal civil war following the defeat of Japan, and most neighbouring countries were colonies of NATO member states or occupied by the United States.

A model to address imbalances in the international system dating the late 1940s has already been developed by both China and Australia. The Chinese-led establishment of the Asian Infrastructure Investment Bank (AIIB) and Australia’s leading role in establishing the Asia-Pacific Economic Cooperation (APEC) forum have contributed to economic growth and diplomatic cooperation. There is a growing need to develop Asia-Pacific legal institutions to accompany these sister organisations and directly enhance the rule of law. In the case of the AIIB, the United States was inflexible and many of its regional allies ignored its demands to boycott the bank. In the case of APEC, the United States has benefited as an active and productive member. The AIIB is providing much needed development to both China’s western provinces and Central Asia. It will be crucial in reviving land-based trade routes to Europe and securing Asia-Pacific trade from maritime threats. The United States should seek to engage productively with Asia-Pacific institutions in the same way it did when the Europeans sought to establish similar organisations after the Second World War.

Lastly, the establishment of regional institutions should not be seen as a retreat from the international system. Nations maintain distinct internal legal jurisdictions and political subdivisions for both practical and political reasons. The stability of the international system already rests on regional blocs like the African and European unions. All institutions draw their legitimacy from the trust vested in them by the communities they serve. Different jurisdictions and subdivisions provide tailored solutions to local problems and act to consolidate the overall legitimacy of the larger national or international system. Existing international legal structures should always be open to necessary reforms and even discarded in the face of systemic threats to the rule of law. If the rule based order developed under the current international system is to be maintained following the decline of NATO, then other actors must be given a stake in the system.

The maintenance of a rules-based order in the Asia-Pacific is crucial to global prosperity and security. As the 21st Century progresses the Pacific peace will be as vital, or as destructive, to the rule of law as the Atlantic peace was in the 20th century. Given the increased status and importance of the Asian side of the Pacific new legal institutions will be required to meet the unique challenges of this region. All actors have a vested interest in the advancement of the rule of law. China and ASEAN have routinely demonstrated their stake in a rules-based order. Perhaps a court based in Hong Kong and Singapore with judges and staff from each major Asia-Pacific nation could provide increased legitimacy. The North Atlantic peace required two devastating global wars to finally institutionalise Russian and American national interests. The Pacific peace should be reordered to resolve disputes, like those in the South China Sea, through the rule of law in place of global war.