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China’s rejection of the South China Sea ruling poses a serious challenge to the rules-based international order. European nations can play an important role in forging a response using a new “G7 plus” Format.

Contested waters: aerial shot of Woody Island in the South China Sea

China’s defiance of the arbitral award on the South China Sea presents a serious challenge not only to the United States and its Asian allies, but to the entire international community. The sweeping rejection of China’s claims by a tribunal at the Permanent Court of Arbitration in The Hague has increased the risk of an escalation of tensions in the contested region, especially if China chooses to reassert its own position on the ground.

The tribunal delivered a remarkably clear legal victory to the Philippines, which had filed the case under the UN Convention on the Law of the Sea (UNCLOS) after not being able to settle conflicting territorial claims bilaterally with China. As expected, China, which had never accepted the court’s legitimacy, declared the decision “null and void”.

A broad international coalition is now needed to prevent developments in the South China Sea from spiralling out of control. Governments who are committed to maintaining a law-based international order cannot let China off the hook. They will have to take a firm stand in defence of existing rules and build leverage vis-à-vis China through new multilateral instruments and formats, for example in the G7 framework. At the same time, they have to be careful not to burn bridges and to give China the opportunity to be a part of the solution.

Germany and Europe can play important role

Germany and other leading European governments should play an active role in forging this international coalition. European interests are affected by the stand-off in the South China Sea. China’s defiance of multilateral legal norms clashes with core European values and interests. The maintenance of a multilateral international order based on the rule of law is one of the few foreign policy goals all 28 EU member states have in common.

Heightened tensions in the region may also end up damaging European economic interests. If cargo ships have to be rerouted due to acute tensions in the South China Sea this would drive up insurance premiums and increase the costs of trading with East and Southeast Asia.

The fact that Europeans are no active party in the South China Sea standoff qualifies them to act as a neutral arbiter and diplomatic broker between China and its neighbours. EU member states can exert influence through existing channels with Asean. For example, they could initiate a conference under Asean’s “Treaty of Amity and Cooperation in Southeast Asia”, to which China and the EU are parties. This conference could help rebuild trust among other states with claims in the contested maritime areas and revive work towards the adoption of a regional Code of Conduct in the South China Sea.

European countries are also in a good position to act as champions of the existing international legal order vis-à-vis China – especially compared to the U.S. which has never ratified the UN Convention on the Law of the Sea (UNCLOS) based on which the tribunal made its decision. Despite assertions by the US government that it abides by the spirit of this international treaty, the Senate’s failure to ratify sets a bad example for China, which has ratified UNCLOS but might choose to withdraw its membership should tensions escalate.

G7 plus could become vehicle for de-escalation

The G7 would be an ideal starting point for multilateral coordination between the leading powers in Europe and North America as well as Japan. They proved unity when they issued a remarkably clear joint position on the tensions in the South and East China Sea this spring. Building on this unity, the G7 should set up a permanent working group, open to participation from U.S. allies in the Pacific like South Korea, Australia and the Philippines, but also to countries like Indonesia or Vietnam. This “G7 plus” format should consist of diplomats and military representatives – and it should also be open to invite and consult with representatives from China.

This working group could create an opportunity for building bridges, with the goal of bringing China back into an international order based on commonly accepted multilateral rules. At the same time, it could become a useful vehicle for sending decisive and united diplomatic signals to Beijing whenever necessary. The “G7 plus” would also be the right venue to contemplate counter-measures should China escalate the situation in the SCS, by interfering with ASEAN fishing fleets, by expanding the construction of artificial islands, or by declaring an “Air Defense Identification Zone” as it has previously done in the East China Sea.

If China sends no conciliatory signals over the coming weeks, G7 countries and their regional partners could use the G20 summit in Hangzhou this September as a platform to convey their concern. As a last resort, the option of a boycott of the summit could even be on the table – an outcome which all parties involved, including China, will presumably try their best to prevent from happening.