Thayer Consultancy

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Background Briefing: Vietnam China Joint Development in the East Sea? Carlyle A. Thayer October 12, 2011

[clientnamedeleted] WhatdoyouthinkofChina'sproposaltourgeVietnamjointlydevelopareasofthe SouthChinaSea?DoesitmeanChinaurgesVietnamtojointlydevelopeveninthe 200 nautical miles of Vietnam's exclusive economic zone? Should Vietnam accept this? ANSWER: development has long been on the cards. It can only proceed if both partiesputinaclausethatjointdevelopment doesnotprejudice theirsovereignty claims UnderinternationallawVietnamhasexclusivesovereigntyovertheresources(inthe watercolumnandontheoceanfloor)withinitsExclusiveEconomicZone.Vietnamis thereforefreetogivepermissiontoPetroVietnam[Vietnamsnationaloilcompany] tosignajointdevelopmentagreementwithaChinesestateownedoilcompany. Vietnamalsowillhavetobecarefulaboutwherejointdevelopmenttakesplace.It cannotaffectathirdparty.Willthesharingofoilandgasbeonanequitablebasisor will China claim the lions share? Whatever Vietnam agrees to do with China will have an immediate impact on the other claimant states, the Philippines, Malaysia andBrunei. In the past Chinas proposals for joint development were characterized as follows: joint development means development in Vietnams waters but not in Chinese waters.Inotherwords,jointdevelopmentisaboutexploitingresourcesincontested areasbutnotinareaswhereChinahaseffectivejurisdiction. GeneralComment:Theagreementonprinciplestoguidethesettlementofmaritime disputeshaslongbeenexpected.ChinaandVietnamagreedin2008toworkonthis document and seven bilateral meetings were held starting in 2010. The announcementthatagreementhasbeenreachedcomesasasurprise.Itisobviously timedtoproduceadeliverableduringthecurrentvisittoBeijingbypartySecretary GeneralNguyenPhuTrong.ChinaandVietnamdidinfactreachanagreementofa similarnatureaspartoftheprocessthatledtothedemarcationoftheirlandborder. A summit of party leaders set a deadline and the land border agreement was reached. Therearenoindicationsthatthecurrentsummitwillproduceasimilardeadlinefor the settlement of their bilateral maritime disputes. The agreement of principles

2 represents a step forward. Whether it is a significant step forward remains to be seen.Theproofwillcomeinthefollowingmonths.WillChinaandVietnamactually inaugurateany or all of the suggested areas of cooperation? If so, this would be a positive indicator. On the other hand, will China continue to claim indisputable sovereigntyovertheSouthChinaSeaandprotestwhenVietnamawardscontractsto foreignoilcompanies? References to the UN Convention on Law of the Sea may sound good, but China, VietnamandthePhilippinesallclaimexcessivebaselinesthatarenotinaccordwith international law. These baselines form the basis of delimiting the territorial sea, contiguouszoneandexclusiveeconomiczone.Itwouldbeamajorstepforwardifall partiesagreedtoredrawtheirbaselinestoreflectinternationallaw.Forthemoment referencestoUNCLOSmustbeseenaswindowdressing.