South Korea – the Philippines Strengthen ties – SKorean President State Visit to the Philippines

The Philippines and South Korea will sign on Monday agreements envisioned to further strengthen overall ties between the two countries.

South Korean President Lee Myung-bak, who arrived in Manila on Sunday afternoon, will officially begin his state visit with a wreath-laying ceremony at the Rizal Shrine in Luneta before proceeding to Malacañang for a meeting with President Aquino.

The two leaders are expected to discuss, among other things, trade and investment opportunities, and tourism, Deputy Presidential Spokesman Abigail Valte said in an interview over dzRB, the government radio, on Sunday.

"There are many tourists from South Korea who come to the Philippines. We also have common interests in trade and investment. We know that the Republic of Korea is our development partner, particularly in agriculture and infrastructure, so we expect the flow of discussions to go around the topics that were mentioned," Valte said.

Filipino businessmen are hoping the state visit would result in a joint communiqué with South Korea in the form of an accelerated version of an economic partnership agreement (EPA).

The joint communiqué should outline initiatives that will further the exchange of trade, investments and people between the two countries, said Donald Dee, vice chairman and treasurer of the Philippine Chamber of Commerce and Industry (PCCI).

"We don't need to negotiate an EPA with Korea because we are already linked in several areas and we already have the Asean-Korea Free Trade Area [AKFTA]. We no longer have barriers when it comes to tariffs and manufacturing. We only need to have a joint communiqué," Dee told the BusinessMirror.

The document, Dee said, should focus on non-tariff barriers, investments, services and a mutual recognition agreement.

Currently, the country's EPA is with Japan. On a regional basis as part of the Association of Southeast Asian Nations (Asean), however, the Philippines has free-trade agreements with Japan, South Korea, China, India, Australia and New Zealand.

Based on the study of the Universal Access to Competitiveness and Trade, which serves as the PCCI think-tank, Dee said merchandise trade between the two countries increased rapidly since the forging of the AKFTA in 2007. Exports to South Korea are up 23 percent and it is now the eighth-largest trading partner of the Philippines.

South Korean investments, on the other hand, went up from less than $100 million in 2007 to $600 million in 2010. Among the top South Korean investors in the Philippines are Hanjin Heavy Industries and Construction, Samsung Electronics Philippines Manufacturing Corp., and Daelim Industrial Co. Ltd.

On the tourism side, Dee said Koreans make up 22 percent of the total foreign visitors to the Philippines.

With the existing complementarities economically and socially, Dee said the Philippines and South Korea could skip the tedious part of negotiating an EPA and proceed to the forging of a joint communiqué.

"We only need to list down all our matching industries and then reconcile our ambitions and expectations," Dee said.

The joint communiqué, he said, should state that South Korea and the Philippines will work together to enhance the economies of both countries.

The two countries will then separately outline their respective commitments on how their ambitions will be achieved in the areas of trade, investments, services and mutual recognition for the practice of professions.

Coinciding with the visit of Mr. Lee, a former CEO of Hyundai Engineering and Construction, the government has arranged a meeting between the PCCI and the South Korean business delegation at the Manila Hotel on Monday, which the South Korean leader will keynote. President Lee flew in at 1:30 p.m. on Sunday accompanied by his wife, Kim Myun-Ok.

Apart from his Palace engagements, Mr. Lee will also attend a town hall meeting at the Ateneo de Manila University before returning to Malacañang for a state dinner in his honor.

He will depart Manila on Tuesday morning.

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Clinton warns against intimidation in South China Sea dispute

U.S. Secretary of State Hillary Clinton on Wednesday urged claimants to the South China Sea not to resort to intimidation to push their cause in the potentially oil-rich waters, an indirect reference to China ahead of a regional leaders' summit.

Clinton reiterated that the United States wanted a candid discussion of the maritime dispute, which an Australian think tank warned earlier this year could lead to war, when the leaders gather in Bali, Indonesia, this week.

However, China says it does not want the issue discussed, putting it at loggerheads with the United States once again after they exchanged barbs over trade and currency at last week's meeting of Asia Pacific Economic Co-operation forum in Hawaii.

"The United States does not take a position on any territorial claim, because any nation with a claim has a right to assert it," Clinton said in Manila, while marking the 60th anniversary of the U.S.-Philippine Mutual Defense Treaty.

"But they do not have a right to pursue it through intimidation or coercion. They should be following international law, the rule of law, the U.N. Convention on Law of the Sea."

She said disputes in the sea lanes should be resolved through the 1982 United Nations Convention on the Law of the Sea (UNCLOS), which defined rules on how countries can use the world's oceans and their resources.

That could embolden Southeast Asia's hand against China, which has said it would not submit to international arbitration over competing claims to the area, believed to be rich in natural resources and a major shipping lane.

China says it has historical sovereignty over the South China Sea and so supersedes claims of other countries, including the Philippines, Vietnam, Malaysia and Brunei.

"Introducing a contentious subject into the meeting would only affect the atmosphere of cooperation and mutual trust, damaging the hard-won setting of healthy development in the region," Chinese Foreign Ministry spokesman Liu Weimin said on Wednesday. "That's is beyond any doubt."

Beijing bristles at what it calls U.S. interference and has blamed the maritime tensions on U.S. trouble making.

Estimates of proven and undiscovered oil reserves in the South China Sea range from 28 billion barrels of oil to as high as 213 billion barrels, U.S. figures showed in 2008. Gas deposits could be as high as 3.8 trillion cubic metres, the U.S. Geological Survey has estimated. Both would supply China with energy supplies for decades if proven.

China's resource needs and its risk-taking behaviour over staking its claim in the increasingly crowded sea lanes of the maritime region raise the possibility of armed conflict that could draw in the United States and other powers, the Lowy Institute said in a report in June.

Tensions flared again earlier this year with concerns raised over China's enforcement of its claim in areas also claimed by Vietnam and the Philippines, including the cutting of cables on survey ships, threats to ram some vessels and breaches of airspace by military aircraft.

UNITY

On Tuesday, the Philippines criticised its South East Asian neighbours for failing to take a united stand against China.

"ASEAN is now at a critical junction of playing a positive and meaningful role to contribute in the peaceful resolution of the disputes in the South China Sea," said Foreign Secretary Albert del Rosario.

Manila wants ASEAN to be able to help resolve sensitive issues without letting them affect bilateral or multilateral relations, he said.

Smaller Southeast Asian claimants view a U.S. presence and a multilateral approach to negotiations as strengthening their stance against China's all-encompassing claim on the sea.

ASEAN and China approved guidelines this year to make a code of conduct agreement signed in 2002 more concrete as they sought to cool tensions.

Indonesia's foreign minister, Marty Natalegawa, suggested claimants to the maritime region should pursue the code of conduct negotiations while apparently chiding China and the United States.

"ASEAN now has a clear scenario and approach. So ASEAN countries will not let the Southeast Asia region become a competition arena for countries who consider themselves as big powers, whoever or whenever they maybe," he told a press briefing.

"We have an interest to make a clear code of conduct (for the South China Sea) so that concerns from non-Southeast Asian countries can be reflected based on the interest of ASEAN countries' national interest," he said.

It was important for ASEAN to promote a break from "a self-fulfilling vicious circle of action and counter-reaction," he added.

Washington says its interest in the rift is to make sure a shipping lane that carries some $5 trillion in international trade a year is kept open and can be freely navigated.

"President Obama will reaffirm our national interest in the maintenance of peace and security in the region and internationally," Clinton said.

She said that included freedom of navigation, the rule of law and unimpeded lawful commerce, with the United States seeing UNCLOS as the overriding framework for territorial disputes.

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