Fears over freedom of navigation are overblown

An inter-dependent globalised world means strong deterrence to any attack on seaborne trade.

WHENEVER observers discuss security in Asia, the talk soon focuses on threats to seaborne trade. The regional leaders who met at the East Asia Summit in Brunei last week were no exception. Many of them referred to threats to freedom of navigation as the key reason why disputes in the South China Sea need urgent attention.

Likewise growing concerns about the Malacca Strait and the Indian Ocean as strategic hot spots invariably focus on the risks to the security of the vast seaborne trade that passes across and through these waterways. For Singapore, at the fulcrum of these vital trade routes, the possibility that its security might be threatened would naturally be among the country's most serious strategic concerns.

But how serious are these concerns really? I think they are vastly exaggerated and that such issues distract us from much more real and serious concerns.

Seaborne trade is, of course, vital to the global economy. Trade has grown remarkably in volume and value over recent decades. Indeed it has grown much faster than global output because an ever-increasing proportion of goods is now traded internationally, often in complex global supply chains. And the vast majority of this trade is carried by sea.

Piracy a mere irritant

IT IS also true that the security of seaborne trade is under threat, especially from piracy. But piracy remains a minor and manageable problem - an irritant rather than a serious danger to the free movement of goods by sea. Pirates remain inherently much weaker than the states whose interests are so closely bound with secure trade. That means pirates can flourish only as long as their depredations are less costly than the measures it would take to suppress them. If pirates ever seriously threatened a major trade route, they would be squashed.

Serious threats to seaborne trade can be posed only by powerful states, or individuals acting on their behalf. And so the key question becomes: how likely is a major power to mount that kind of threat? How likely is it, for example, that China would choose to seriously threaten seaborne trade in the South China Sea if it succeeded in establishing its ambitious territorial claims there?

The answer is very clear.

Much of the trade that passes through the South China Sea is going to or from China. All the rest is going to or from other countries whose economies are important to China. This is because in today's highly integrated Asian economic system, China's economy is deeply enmeshed with all the others.

The same is true of other countries. For example, some analysts suggest that America could put pressure on Beijing at any time by threatening China's vital energy supply lines across the Indian Ocean. That would have a devastating effect on China's economy. But it would be disastrous for America's economy too and for that of the rest of the world.

Beauty of interdependence

INDEED, in a globalised world, every major country depends heavily on the economies of all the others. So none of them can interfere with the trade of any of the others without doing immense damage to themselves. This is the beauty of interdependence.

And that is not the only disincentive. Even if a major country decided to accept the indirect economic consequences of disrupting another's trade, it would still have to consider the very direct consequences of what its victim might do in return.

If America interrupted China's trade, for example, it would be very easy for China to do the same to United States trade in retaliation. China's growing submarine fleet gives it ample capability to do exactly that. This means that there is a very strong mutual deterrence at work dissuading any country from attacking the seaborne trade of any other.

This is nothing new. But these mechanisms of interdependence and mutual deterrence have grown stronger in recent years as trade has become more globalised and as more countries have acquired the ability to sink the ships of other nations.

For 200 years, no major country has mounted a sustained campaign against the trade of another major country, except as part of a major war. The only major campaigns that interrupted or disrupted trade since the 18th century have been during the Napoleonic Wars, World War I and World War II. Even in the long decades of East-West hostility and tension during the Cold War, there were no serious attempts to hinder either side's seaborne trade.

In some ways, this striking historical record is very reassuring. It suggests that we can be pretty confident that freedom of navigation in Asia is most unlikely to be seriously challenged as long as there is no broader conflict between the region's strongest powers.

But it also sounds a sombre warning about what happens to trade in a major war. If there was a serious conflict between major powers in Asia, there is a high likelihood that trade would be immediately and drastically effected.

Imagine for example what would happen to trade in Asia if the US got drawn into a clash between China and Japan over the Senkaku/Diaoyu islands. Seaborne trade to and from China and Japan would almost certainly stop. The economy of the entire region would be devastated.

Triggers of conflict

AND the way this dispute has been allowed to escalate shows how unwise we would be to assume that nationalism won't trump economics if push comes to shove. Interdependence may reassure us that a major war won't start over trade. But it doesn't guarantee that one will not start over something even more elemental, like fear or pride.

This leads to an important conclusion. While threats to trade are unlikely to spark a regional conflict, they are almost certain to be a very important consequence of such a conflict. So if we care about the security of trade - as we should - then we need to focus much less on freedom of navigation per se, and much more on the deeper sources of rivalry that might spark a major regional conflict.

The sources of such rivalry are clear. As power shifts in Asia, the regional great powers - especially the US and China - must redefine their relationship with one another and their roles in the regional order. As they manoeuvre for advantage, both sides portray the other as threatening freedom of navigation. The rest of us should not be fooled by this.

The real risk comes from their failure to agree on which of them will be the future leader in Asia. So let's stop worrying about freedom of navigation, and focus on the real problem.

The writer is professor of strategic studies at the Australian National University, Canberra.