Oceans and Seas

This page is part of the multimedia Global Governance Monitor. Scope of the Challenge Oceans are the source of life on earth. They shape the climate, feed the world, and cleanse the air we breathe. They are vital to our economic well being, ferrying roughly 90 percent of global commerce, housing submarine cables, and providing one-third of traditional hydrocarbon resources (as well as new forms of energy such as wave, wind, and tidal power). But the oceans are increasingly threatened by a dizzying array of dangers, from piracy to climate change. To be good stewards of the oceans, nations around the world need to embrace more effective multilateral governance in the economic, security, and environmental realms. The world's seas have always been farmed from top to bottom. New technologies, however, are making old practices unsustainable. When commercial trawlers scrape the sea floor, they bulldoze entire ecosystems. Commercial ships keep to the surface but produce carbon-based emissions. And recent developments like offshore drilling and deep seabed mining are helping humans extract resources from unprecedented depths, albeit with questionable environmental impact. And as new transit routes open in the melting Arctic, this once-forgotten pole is emerging as a promising frontier for entrepreneurial businesses and governments. But oceans are more than just sources of profit—they also serve as settings for transnational crime. Piracy, drug smuggling, and illegal immigration all occur in waters around the world. Even the most sophisticated ports struggle to screen cargo, containers, and crews without creating regulatory friction or choking legitimate commerce. In recent history, the United States has policed the global commons, but growing Indian and Chinese blue-water navies raise new questions about how an established security guarantor should accommodate rising—and increasingly assertive—naval powers. And the oceans themselves are in danger of environmental catastrophe. They have become the world's garbage dump—if you travel to the heart of the Pacific Ocean, you'll find the North Pacific Gyre, where particles of plastic outweigh plankton six to one. Eighty percent of the world's fish stocks are depleted or on the verge of extinction, and when carbon dioxide is released into the atmosphere, much of it is absorbed by the world's oceans. The water, in response, warms and acidifies, destroying habitats like wetlands and coral reefs. Glacial melting in the polar regions raises global sea levels, which threatens not only marine ecosystems but also humans who live on or near a coast. Meanwhile, port-based megacities dump pollution in the ocean, exacerbating the degradation of the marine environment and the effects of climate change. Threats to the ocean are inherently transnational, touching the shores of every part of the world. So far, the most comprehensive attempt to govern international waters produced the United Nations Convention on the Law of the Sea (UNCLOS). But U.S. refusal to join the convention, despite widespread bipartisan support, continues to limit its strength, creating a leadership vacuum in the maritime regime. Other states that have joined the treaty often ignore its guidelines or fail to coordinate policies across sovereign jurisdictions. Even if it were perfectly implemented, UNCLOS is now thirty years old and increasingly outdated. Important initiatives—such as local fishery arrangements and the United Nations Environment Programme Regional Seas Program—form a disjointed landscape that lacks legally binding instruments to legitimize or enforce their work. The recent UN Conference on Sustainable Development ("Rio+20") in Rio de Janeiro, Brazil, convened over one hundred heads of state to assess progress and outline goals for a more sustainable "blue-green economy." However, the opportunity to set actionable targets to improve oceans security and biodiversity produced few concrete outcomes. As threats to the oceans become more pressing, nations around the world need to rally to create and implement an updated form of oceans governance. Oceans Governance: Strengths and Weaknesses Overall assessment: A fragmented system In 1982, the UN Convention on the Law of the Sea (UNCLOS) established the fundamental legal principles for oceans governance. This convention, arguably the largest and most complex treaty ever negotiated, entered into force in 1994. Enshrined as a widely accepted corpus of international common law, UNCLOS clearly enumerates the rights, responsibilities, and jurisdictions of states in their use and management of the world's oceans. The treaty defines "exclusive economic zones", which is the coastal water and seabed—extending two hundred nautical miles from shore—over which a state has special rights over the use of marine resources; establishes the limits of a country's "territorial sea," or the sovereign territory of a state that extends twelve nautical miles from shore; and clarifies rules for transit through "international straits." It also addresses—with varying degrees of effectiveness—resource division, maritime traffic, and pollution regulation, as well as serves as the principal forum for dispute resolution on ocean-related issues. To date, 166 countries and the European Union have ratified UNCLOS. UNCLOS is a remarkable achievement, but its resulting oceans governance regime suffers several serious limitations. First, the world's leading naval power, the United States, is not party to the convention, which presents obvious challenges to its effectiveness—as well as undermines U.S. sovereignty, national interests, and ability to exercise leadership over resource management and dispute resolution. Despite the myriad military, economic, and political benefits offered by UNCLOS, a small but vocal minority in the United States continues to block congressional ratification. Second, UNCLOS, is now thirty years old and, as a result, does not adequately address a number of emerging and increasingly important international issues, such as fishing on the high seas—a classic case of the tragedy of the commons—widespread maritime pollution, and transnational crime committed at sea. Third, both UNCLOS and subsequent multilateral measures have weak surveillance, capacity-building, and enforcement mechanisms. Although various UN bodies support the instruments created by UNCLOS, they have no direct role in their implementation. Individual states are responsible for ensuring that the convention's rules are enforced—which presents obvious challenges in areas of overlapping or contested sovereignty, or effectively stateless parts of the world. The UN General Assembly plays a role in advancing the oceans agenda at the international level, but its recommendations are weak and further constrained by its lack of enforcement capability. Organizations that operate in conjunction with UNCLOS—such as the International Maritime Organization (IMO), the International Tribunal on the Law of the Sea (ITLOS), and the International Seabed Authority (ISA)—play an important role in protecting the oceans and strengthening oceans governance. The IMO has helped to reduce ship pollution to historically low levels, although it can be slow to enact new policy on issues such as invasive species, which are dispersed around the world in ballast water. ITLOS only functions if member states are willing to submit their differences to its judgment, while the ISA labors in relative obscurity and operates under intense pressure from massive commercial entities. Fourth, coastal states struggle to craft domestic policies that incorporate the many interconnected challenges faced by the oceans, from transnational drug smuggling to protecting ravaged fish stocks to establishing proper regulatory measures for offshore oil and gas drilling. UNCLOS forms a solid platform on which to build additional policy architecture, but requires coastal states to first make comprehensive oceans strategy a priority—a goal that has remained elusive thus far. Fifth, the system is horizontally fragmented and fails to harmonize domestic, regional, and international policies. Domestically, local, state, and federal maritime actors rarely coordinate their agendas and priorities. Among the handful of countries and regional organizations that have comprehensive ocean policies—including Australia, Canada, New Zealand, Japan, the European Union, and most recently the United States—few synchronize their activities with other countries. The international community, however, is attempting to organize the cluttered oceans governance landscape. The United Nations Environment Programme (UNEP) Regional Seas Program works to promote cooperation for marine and coastal management, albeit with varying degrees of success and formal codification. Likewise, in 2007 the European Union instituted a regional Integrated Maritime Policy (IMP) that addresses a range of environmental, social, and economic issues related to oceans, as well as promotes surveillance and information sharing. The IMP also works with neighboring partners to create an integrated oceans policy in places such as the Arctic, the Baltic, and the Mediterranean. Lastly, there is no global evaluation framework to assess progress. No single institution is charged with monitoring and collecting national, regional, and global data on the full range of oceans-related issues, particularly on cross-cutting efforts. Periodic data collecting does take place in specific sectors, such as biodiversity conservation, fisheries issues, and marine pollution, but critical gaps remain. The Global Ocean Observing System is a promising portal for tracking marine and ocean developments, but it is significantly underfunded. Without concrete and reliable data, it is difficult to craft effective policies that address and mitigate emerging threats. Despite efforts, oceans continue to deteriorate and a global leadership vacuum persists. Much work remains to modernize existing institutions and conventions to respond effectively to emerging threats, as well as to coordinate national actions within and across regions. The June 2012 United Nations Conference on Sustainable Development, also known as Rio+20, identified oceans (or the "blue economy") as one of the seven priority areas for sustainable development. Although experts and activists hoped for a new agreement to strengthen the sustainable management and protection of oceans and address modern maritime challenges such as conflicting sovereignty claims, international trade, and access to resources, Rio+20 produced few concrete results. Maintaining freedom of the seas: Guaranteed by U.S. power, increasingly contested by emerging states The United States polices every ocean throughout the world. The U.S. navy is unmatched in its ability to provide strategic stability on, under, and above the world's waters. With almost three hundred active naval ships and almost four thousand aircraft, its battle fleet tonnage is greater than the next thirteen largest navies combined. Despite recently proposed budget cuts to aircraft carriers, U.S. naval power continues to reign supreme. The United States leverages its naval capabilities to ensure peace, stability, and freedom of access. As Great Britain ensured a Pax Britannica in the nineteenth century, the United States presides over relatively tranquil seas where global commerce is allowed to thrive. In 2007, the U.S. Navy released a strategy report that called for "cooperative relationships with more international partners" to promote "greater collective security, stability, and trust." The United States pursues this strategy because it has not faced a credible competitor since the end of the Cold War. And, thus far, emerging powers have largely suported the U.S. armada to ensure that the oceans remain open to commerce. However, emerging powers with blue-water aspirations raise questions about how U.S. naval hegemony will accommodate new and assertive fleets in the coming decades. Even tensions between these rising powers could prove problematic. China, for instance, has been steadily building up its naval capabilities over the past decade as part of its "far sea defense" strategy. It unveiled its first aircraft carrier in 2010, and is investing heavily in submarines outfitted with ballistic missiles. At the same time, India has scaled up its military budget by 64 percent since 2001, and plans to spend nearly $45 billion over the next twenty years on its navy. Even tensions among these rising powers could prove problematic. For example, a two-month standoff between China and the Philippines over a disputed region of the South China Sea ended with both parties committing to a "peaceful resolution." China, Taiwan, Vietnam, Malaysia, Brunei, and the Philippines have competing territorial and jurisdictional claims to the South China Sea, particularly over rights to exploit its potentially vast oil and gas reserves. Control over strategic shipping lanes and freedom of navigation are also increasingly contested, especially between the United States and China. Confronting illicit trafficking: Porous, patchy enforcement In addition to being a highway for legal commerce, oceans facilitate the trafficking of drugs, weapons, and humans, which are often masked by the flow of licit goods. Individual states are responsible for guarding their own coastlines, but often lack the will or capacity to do so. Developing countries, in particular, struggle to coordinate across jurisdictions and interdict. But developed states also face border security challenges. Despite its commitment to interdiction, the United States seizes less than 20 percent of the drugs that enter the country by maritime transport. The United Nations (UN) attempts to combat the trafficking of drugs, weapons, and humans at sea. Through the Container Control Program [PDF], the UN Office on Drugs and Crime (UNODC) assists domestic law enforcement in five developing countries to establish effective container controls to prevent maritime drug smuggling. The UNODC also oversees UN activity on human trafficking, guided by two protocols to the UN Convention on Transnational Organized Crime. Although UN activity provides important groundwork for preventing illicit maritime trafficking, it lacks monitoring and enforcement mechanisms and thus has a limited impact on the flow of illegal cargo into international ports. Greater political will, state capacity, and multilateral coordination will be required to curb illicit maritime trafficking. New ad hoc multilateral arrangements are a promising model for antitrafficking initiatives. The International Ship and Port Facility Security Code, for instance, provides a uniform set of measures to enhance the security of ships and ports. The code helps member states control their ports and monitor both the people and cargo that travel through them. In addition, the U.S.-led Proliferation Security Initiative facilitates international cooperation to interdict ships on the high seas that may be carrying illicit weapons of mass destruction, ballistic missiles, and related technology. Finally, the Container Security Initiative (CSI), also spearheaded by the United States, attempts to prescreen all containers destined for U.S. ports and identify high-risk cargo (for more information, see section on commercial shipping). One way to combat illicit trafficking is through enhanced regional arrangements, such as the Paris Memorandum of Understanding on Port State Control. This agreement provides a model for an effective regional inspections regime, examining at least 25 percent of ships that enter members' ports for violations of conventions on maritime safety. Vessels that violate conventions can be detained and repeat offenders can be banned from the memorandum's area. Although the agreement does not permit searching for illegal cargo, it does show how a regional inspections regime could be effective at stemming illegal trafficking. Securing commercial shipping: Global supply chains at risk Global shipping is incredibly lucrative, but its sheer scope and breadth presents an array of security and safety challenges. The world fleet consists of approximately 50,000 ships registered in more than 150 nations. With more than one million employees, this armada transports nearly eight billion tons [PDF] of goods per year—roughly 90 percent of global trade. And the melting Arctic is opening previously impassable trade routes; in 2009, two German merchant vessels traversed the Northeast Passage successfully for the first time in recent history. But despite impressive innovations in the shipping industry, maritime accidents and attacks on ships still occur frequently, resulting in the loss of billions of dollars of cargo. Ensuring the safety and security of the global shipping fleet is essential for the stability of the world economy. Internationally, the International Maritime Organization (IMO) provides security guidelines for ships through the Convention on the Safety of Life at Sea, which governs everything from construction to the number of fire extinguishers on board. The IMO also aims to prevent maritime accidents through international standards for navigation and navigation equipment, including satellite communications and locating devices. Although compliance with these conventions has been uneven, regional initiatives such as the Paris Memorandum of Understanding on Port State Control have helped ensure the safety of international shipping. In addition, numerous IMO conventions govern the safety of container shipping, including the International Convention on Safe Containers, which creates uniform regulations for shipping containers, and the International Convention on Load Lines, which determines the volume of containers a ship can safely hold. However, these conventions do not provide comprehensive security solutions for maritime containers, and illegal cargo could be slipped into shipping containers during transit. Since 1992, the IMO has tried to prevent attacks on commercial shipping through the Convention for the Suppression of Unlawful Acts against the Safety of Maritime Navigation, which provides a legal framework for interdicting, detaining, and prosecuting terrorists, pirates, and other criminals on the high seas. In reality, most enforcement efforts since the 9/11 attacks have focused on securing ports to prevent the use of a ship to attack, rather than to prevent attacks on the ships themselves. Reflecting this imperative, the IMO, with U.S. leadership, implemented the International Ship and Port Facility Security Code (ISPS) in 2004. This code helped create international standards for ship security, requiring ships to have security plans and officers. However, as with port security, the code is not obligatory and no clear process to audit or certify ISPS compliance has been established. Overall, a comprehensive regime for overseeing the safety of international shipping has not been created. The United States attempts to address this vulnerability through the Container Security Initiative (CSI), which aims to prescreen all containers destined for the United States, and to isolate those that pose a high-security risk before they are in transit. The initiative, which operates in fifty-eight foreign ports, covers more than 86 percent of container cargo en route to the United States. Several international partners and organizations, including the European Union, the Group of Eight, and the World Customs Organization, have expressed an interest in modeling security measures for containerized cargo based on the CSI model. Despite these efforts, experts estimate that only 2 percent of containers destined for U.S. ports are actually inspected. Confronting piracy: Resurgent scourge, collective response After the number of attacks reached a record high in 2011, incidences of piracy dropped 28 percent in the first three months of 2012. Overall, the number of worldwide attacks decreased from 142 to 102 cases, primarily due to international mobilization and enhanced naval patrols off the coast of Somalia. However, attacks intensified near Nigeria and Indonesia as pirates shifted routes in response to increased policing, raising fresh concerns over the shifting and expanding threat of piracy. In addition to the human toll, pervasive piracy can have significant economic ramifications. According to a report by the World Bank, The Pirates of Somalia, Ending the Threat, Rebuilding a Nation [PDF], the global economy is losing 18 billion dollars per year due to the increased costs of trade caused by Somali piracy. Sustained international coordination and cooperation is essential to preventing and prosecuting piracy. Recognizing this imperative, countries from around the world have shown unprecedented cooperation to combat piracy, particularly near the Gulf of Aden. In August 2009, the North Atlantic Treaty Organization commenced Operation Ocean Shield in the horn of Africa, where piracy increased close to 200 percent between 2007 and 2009. This effort built upon Operation Allied Protector and consisted of two standing maritime groups with contributions from allied nations. Although the efforts concentrate on protecting ships passing through the Gulf of Aden, they also renewed focus on helping countries, specifically Somalia, prevent piracy and secure their ports. Meanwhile, the United States helped establish Combined Task Force 151 to coordinate the various maritime patrols in East Africa. Other countries including Russia, India, China, Saudi Arabia, Malaysia, and South Korea, have also sent naval vessels to the region. At the same time, regional organizations have also stepped up antipiracy efforts. The Regional Cooperation Agreement on Combating Piracy and Armed Robbery against Ships in Asia was the first of such initiatives, and has been largely successful in facilitating information-sharing, cooperation between governments, and interdiction efforts. And in May 2012, the European Union naval force launched its first air attack against Somali pirates' land bases, the first strike of its kind by outside actors to date. Like individual countries, international institutions have condemned piracy and legitimized the use of force against pirates. In June 2008, the UN Security Council unanimously passed Resolution 1816, encouraging greater cooperation in deterring piracy and asking countries to provide assistance to Somalia to help ensure coastal security. This was followed by Resolution 1846, which allowed states to use "all necessary means" to fight piracy off the coast of Somalia. In Resolution 1851, the UN Security Council legitimized the use of force on land as well as at sea to the same end. Outside the UN, watchdogs such as the International Maritime Bureau, which collects information on pirate attacks and provides reports on the safety of shipping routes, have proven successful in increasing awareness, disseminating information, and facilitating antipiracy cooperation. However, such cooperative efforts face several legal challenges. The United States has not ratified the UN Convention on the Law of the Sea, which governs crimes, including piracy, in international waters. More broadly, the international legal regime continues to rely on individual countries to prosecute pirates, and governments have been reluctant to take on this burden. Accordingly, many pirates are apprehended, only to be quickly released. In addition, many large commercial vessels rely on private armed guards to prevent pirate attacks, but the legal foundations governing such a force are shaky at best. National governments have redoubled efforts to bring pirates to justice as well. In 2010, the United States held its first piracy trial since its civil war, soon followed by Germany's first trial in over four hundred years. Other agreements have been established to try pirates in nearby countries like Kenya, such as the UNODC Trust Fund to Support the Initiatives of States to Counter Piracy of the Coast of Somalia, established in January 2010. Under the mandate of the Contact Group on Piracy off the Coast of Somalia, the fund aims to defray the financial capital required from countries like Kenya, Seychelles, and Somalia to prosecute pirates, as well as to increase awareness within Somali society of the risk associated with piracy and criminal activity. Future efforts to combat piracy should continue to focus on enhancing regional cooperation and agreements, strengthening the international and domestic legal instruments necessary to prosecute pirates, and addressing the root causes of piracy. Reducing marine pollution and climate change: Mixed progress Pollution has degraded environments and ravaged biodiversity in every ocean. Much contamination stems from land-based pollutants, particularly along heavily developed coastal areas. The UN Environment Programme (UNEP) Regional Seas Program has sponsored several initiatives to control pollution, modeled on a relatively successful program in the Mediterranean Sea. In 1995, states established the Global Program of Action for the Protection of the Marine Environment from Land-Based Activities, which identifies sources of land-based pollution and helps states establish priorities for action. It has been successful in raising awareness about land-based pollution and offering technical assistance to regional implementing bodies, which are so often starved for resources. More recently, 193 UN member states approved the Nagoya Protocol on biodiversity, which aims to halve the marine extinction rate by 2020 and extend protection to 10 percent of the world's oceans. Shipping vessels are also a major source of marine pollution. Shipping is the most environmentally friendly way to transport bulk cargoes, but regulating maritime pollution remains complicated because of its inherently transnational nature. Shipping is generally governed by the International Maritime Organization (IMO), which regulates maritime pollution through the International Convention for the Prevention of Pollution from Ships (MARPOL). States are responsible for implementing and enforcing MARPOL among their own fleets to curb the most pernicious forms of maritime pollution, including oil spills, particulate matter such as sulfur oxide (SOx) and nitrous oxide (NOx), and greenhouse-gas emissions. Port cities bear the brunt of air pollution, which devastates local air quality because most ships burn bunker fuel (the dirtiest form of crude oil). The IMO's Marine Environmental Protection Committee has also taken important steps to reduce SOx and NOx emissions by amending the MARPOL guidelines to reduce particulate matter from ships. The IMO has been notably successful in reducing the amount of oil spilled into the marine environment. Despite a boom in global shipping, oil spills are at an all-time low. The IMO should strive to replicate this success in its efforts to reduce shipping emissions. Despite such efforts, a 2010 study [PDF] from the Organization for Economic Development and Cooperation found that international shipping still accounts for nearly 3 percent of all greenhouse gasses. The IMO has achieved noteworthy success in reducing oil spilled into the marine environment. Despite a global shipping boom, oil spills are at an all-time low. The achievements of the IMO have been further strengthened by commitments by the Group of Eight to cooperate on oil pollution through an action plan that specifically targets pollution prevention for tankers. The IMO should strive to replicate this success in its efforts to reduce shipping emissions. Climate change is also exacerbating environmental damage. In June 2009, global oceans reached their highest recorded average temperature: 17 degrees Celsius. As the world warms, oceans absorb increased levels of carbon dioxide, which acidifies the water and destroys wetlands, mangroves, and coral reefs—ecosystems that support millions of species of plants and animals. According to recent studies, ocean acidity could increase by more than 150 percent by 2050 if counteracting measures are not taken immediately. Moreover, melting ice raises sea levels, eroding beaches, flooding communities, and increasing the salinity of freshwater bodies. And the tiny island nation of the Maldives, the lowest country in the world, could be completely flooded if sea levels continue to rise at the same rate. Individual states are responsible for managing changes in their own marine climates, but multilateral efforts to mitigate the effect of climate change on the oceans have picked up pace. In particular, the UNEP Regional Seas Program encourages countries sharing common bodies of water to coordinate and implement sound environmental policies, and promotes a regional approach to address climate change. Sustainable fisheries policies on the high seas: An ecological disaster States have the legal right to regulate fishing in their exclusive economic zones (EEZs), which extend two hundred nautical miles from shore—and sometimes beyond that, in the case of extended continental shelves. But outside the EEZs are the high seas, which do not fall under any one country's jurisdiction. Freedom of the high seas is critical to the free flow of global commerce, but spells disaster for international fisheries in a textbook case of the tragedy of the commons. For years, large-scale fishing vessels harvested fish as fast as possible with little regard for the environmental costs, destroying 90 percent of the ocean's biomass in less than a century. Overall, fisheries suffer from two sets of challenges: ineffective enforcement capacity and lack of market-based governance solutions to remedy perverse incentives to overfish. Although there are numerous international and multilateral mechanisms for fisheries management, the system is marred by critical gaps and weaknesses exploited by illegal fishing vessels. Articles 117 and 118 of the UN Convention on the Law of the Sea (UNCLOS) enumerate the specific fisheries responsibilities of state parties, placing the onus on national governments to form policies and regional agreements that ensure responsible management and conservation of fish stocks in their respective areas. UNCLOS was further strengthened by the UN Fish Stocks Agreement (FSA), which called for a precautionary approach toward highly migratory and straddling fish stocks that move freely in and out of the high seas. Seventy-eight countries have joined the FSA thus far, and a review conference in May 2010 was hailed as a success due to the passage of the Port State Measures (PSMs) to combat illegal, unreported, and unregulated (IUU) fishing. Yet fish stocks have continued to stagnate or decline to dangerously low levels, and the PSMs have largely failed to prevent IUU operations. Regional fishery bodies (RFBs) are charged with implementation and monitoring. The RFBs provide guidelines and advice on a variety of issues related to fishing, including total allowable catch, by-catch, vessel monitoring systems, areas or seasons closed for fishing, and recording and reporting fishery statistics. However, only a portion of these bodies oversee the management of their recommendations, and some RFBs allow members to unilaterally dismiss unfavorable decisions. Additionally, RFBs are not comprehensive in their membership and, for the most part, their rules do not apply to vessels belonging to a state outside the body. Even when regional bodies make a binding decision on a high-seas case, implementation hinges on state will and capacity. In 2003, the UN General Assembly established a fund to assist developing countries with their obligations to implement the FSA through RFBs. The overall value of the fund remains small, however, and countries' compliance is often constrained by resource scarcity. This results in spotty enforcement, which allows vessels to violate international standards with impunity, particularly off the coasts of weak states. Migratory species like blue fin tuna are especially vulnerable because they are not confined by jurisdictional boundaries and have high commercial value. Some of the RFBs with management oversight, such as the Commission for the Conservation of Antarctic Marine Living Resources and the South East Atlantic Fisheries Organization, have been relatively effective in curbing overfishing. They have developed oversight systems and specific measures to target deep-water trawl fishing and illegal, unreported, and unregulated fishing in the high seas. Many regional cooperative arrangements, however, continue to suffer from weak regulatory authority. At the same time, some regions like the central and southwest Atlantic Ocean lack RFBs. Some have suggested filling the void with market-based solutions like catch shares, which could theoretically alter the incentives toward stewardship. Catch shares (also known as limited access privilege programs) reward innovation and help fisheries maximize efficiency by dedicating a stock of fish to an individual fisherman, community, fishery association, or an individual state. Each year before the beginning of fishing season, commercial fishermen would know how much fish they are allowed to catch. They would then be allowed to buy and sell shares to maximize profit. By incorporating free-market principles, fisheries could reach a natural equilibrium at a sustainable level. According to research, more sustainable catch shares policies could increase the value of the fishing industry by more than $36 billion. Although allocating the shares at the domestic—much less international—level remains problematic, the idea reflects of the kind of policy work required to better manage the global commons. Managing the Arctic: At a crossroads Arctic ice is melting at unprecedented rates. At this pace, experts estimate that the Arctic could be seasonally ice free as early as 2040, and possibly much earlier. As the ice recedes and exposes valuable new resources, multilateral coordination and observation [PDF] will become even more important among states (and indigenous groups) jockeying for position in the region. The melting ice is opening up potentially lucrative new sea routes and stores of natural resources. Since September 2009, cargo ships have been able to traverse the fabled Northwest and Northeast Passages, which are significantly shorter than traditional routes around the capes or through the canals. Widening sea routes also means that fishing fleets can travel north in search of virgin fishing stock, and that cruise ships can carry tourists chasing a last glimpse of the disappearing ice. At the same time, untapped resources such as oil, natural gas, rare earth minerals, and massive renewable wind, tidal, and geothermal energy hold enormous potential. In a preliminary estimate, the U.S. Geographic Society said that the Arctic Circle may hold 22 percent of the world's hydrocarbon resources, including 90 billion barrels of oil and 1,670 trillion cubic feet of natural gas. Beyond oil and gas, the Arctic may hold valuable commodities such as zinc, nickel, and coal. But new opportunities in the Arctic also portend new competition among states. In August 2007, Russia symbolically planted a flag on the Arctic floor, staking a claim to large chunks of Arctic land. Other Arctic powers, including the United States, Canada, Norway, and Denmark, have also laid claims. The European Union crafted a new Arctic policy, and China sent an icebreaker on three separate Arctic expeditions. Each country stands poised to grab new treasure in this increasingly important geostrategic region. The UN Convention on the Law of the Sea (UNCLOS) is a solid foundation on which to build and coordinate national Arctic policies, especially articles 76 and 234, which govern the limits of the outer continental shelf(OCS) and regulate activities in ice-covered waters, respectively. However, there remains a formidable list of nagging sovereignty disputes that will require creative bilateral and multilateral resolutions. The Arctic Council, a multilateral forum comprising eight Arctic nations, has recently grown in international prominence, signing a legally binding treaty on search and rescue missions in May 2011 and drawing top level policymakers to its meetings. While these are significant first steps, the forum has yet to address other issues such as overlapping OCS claims, contested maritime boundaries, and the legal status of the Northwest Passage and the Northern Sea Route. U.S. Ocean Governance Issues Introduction The United States championed many of the most important international maritime organizations over the past fifty years. It helped shape the decades-long process of negotiating the UN Convention on the Law of the Sea (UNCLOS) and has played a leading role in many UNCLOS-related bodies, including the International Maritime Organization. It has also served as a driving force behind regional fisheries organizations and Coast Guard forums. Domestically, the United States has intermittently been at the vanguard of ocean policy, such as the 1969 Stratton Commission report, subsequent conservation acts in the 1970s, the recent Joint Ocean Commission Initiative, and, most recently, catch limits on all federally-managed fish species. The Woods Hole Oceanographic Institution and the Monterrey Bay Research Institute have long been leaders in marine science. And from a geopolitical perspective, the U.S. Navy secures the world's oceans and fosters a peaceful environment where global commerce can thrive. Yet the United States lags behind on important issues, most notably regarding its reluctance to ratify UNCLOS. And until recently, the United States did not have a coherent national oceans policy. To address this gap, U.S. president Barack Obama created the Ocean Policy Task Force in 2009 to coordinate maritime issues across local, state, and federal levels, and to provide a strategic vision for how oceans should be managed in the United States. The task force led to the creation of a National Ocean Council, responsible for "developing strategic action plans to achieve nine priority objectives that address some of the most pressing challenges facing the ocean, our coasts, and Great Lakes." Although it has yet to make serious gains [PDF], this comprehensive oceans policy framework could help clear the way for the spadework of coordinating U.S. ocean governance and harmonizing international efforts. Should the United States ratify the UN Convention on the Law of the Sea? Yes: The UN Convention on the Law of the Sea (UNCLOS), which created the governance framework that manages nearly three-quarters of the earth's surface, has been signed and ratified by 166 countries and the European Union. But the United States remains among only a handful of countries to have signed but not yet ratified the treaty—even though it already treats many of the provisions as customary international law. Leaders on both sides of the political aisle as well as environmental, conservation, business, industry, and security groups have endorsed ratification in order to preserve national security interests and reap its myriad benefits, such as securing rights for U.S. commercial and naval ships and boosting the competitiveness of U.S. companies in seafaring activities. Notably, all of the uniformed services—and especially the U.S. Navy—strongly support UNCLOS because its provisions would only serve to strengthen U.S. military efforts. By remaining a nonparty, the United States lacks the credibility to promote its own interests in critical decision-making forums as well as bring complaints to an international dispute resolution body. No: Opponents argue that ratifying the treaty would cede sovereignty to an ineffective United Nations and constrain U.S. military and commercial activities. In particular, critics object to specific provisions including taxes on activities on outer continental shelves; binding dispute settlements; judicial activism by the Law of the Sea Tribunal, especially with regard to land-based sources of pollution; and the perceived ability of UNCLOS to curtail U.S. intelligence-gathering activities. Lastly, critics contend that because UNCLOS is already treated as customary international law, the United States has little to gain from formal accession. Should the United States lead an initiative to expand the Container Security Initiative globally? Yes: Some experts say the only way to secure a global economic system is to implement a global security solution. The U.S.-led Container Security Initiative (CSI) helps ensure that high-risk containers are identified and isolated before they reach their destination. Fifty-eight countries are already on board with the initiative, and many others have expressed interest in modeling their own security measures on the CSI. The World Customs Organization called on its members to develop programs based on the CSI, and the European Union agreed to expand the initiative across its territory. With its robust operational experience, the United States is well positioned to provide the technical expertise to ensure the integrity of the container system. No: Opponents maintain that the United States can hardly commit its tax dollars abroad for a global security system when it has failed to secure its own imports. To date, more than $800 million and considerable diplomatic energy has been invested in CSI to expand the program to fifty-eight international ports, where agents are stationed to screen high-risk containers. Given the scale of world trade, the United States imports more than 10 million containers annually, and only a handful of high-risk boxes can be targeted for inspection. After huge expenditures and years of hard work to expand this program after September 11, 2001, only about 86 percent of the cargo that enters the United States transits through foreign ports covered under CSI, and of that, only about 1 percent is actually inspected (at a cost to the U.S. taxpayer of more than $1,000 per container). Despite congressional mandates to screen all incoming containers, critics say that costs make implementing this mandate virtually impossible. The limited resources the United States has available, they argue, should be invested in protecting imports bound specifically for its shores. Should the United States be doing more to address the drastic decline in the world's fisheries? Yes: Advocates say that the further demise of global fish stocks, beyond being a moral burden, undermines the commerical and national security interests of the United States. Depleting fish stocks are driven in large part by the prevalence of illegal, unreported, and unregulated (IUU) fishing and the overcapitalization of the global commercial fishing fleet from domestic subsidies. To protect domestic commercial fisheries and the competitiveness of U.S. exports in the international seafood market, the United States should enhance efforts by the National Oceanic and Atmospheric Administration to manage, enforce, and coordinate technical assistance for nations engaging in IUU fishing. Domestically, the United States has taken important steps to address the critical gaps in fisheries management. In 2012, it became the first country to impose catch limits on all federally-managed fish species. Some species like the mahi mahi will be restricted for the first time in history. Many environmental experts hailed the move as a potential model for broader regional and international sustainable fisheries policy. To capitalize on such gains, the United States should aggressively work to reduce fishing subsidies in areas such as Europe that promote overcapitalization and thus global depletion of fish stocks. The United States could also promote market-based mechanisms, like catch shares and limited access privilege programs, to help fishermen and their communities curb overfishing and raise the value of global fisheries by up to $36 billion. No: Critics argue that fisheries management is by and large a domestic issue, and that the United States has little right to tell other nations how to manage their own resources, particularly when such measures could harm local economies. They contend that the science behind overfishing is exaggerated, as are the warnings about the consequences of an anticipated fisheries collapse. Existing conventions like the 1995 Fish Stock Agreement already go far enough in addressing this issue. Any additional efforts, they contend, would be a diplomatic overreach, as well as an excessive burden on a struggling commercial fishing industry. Critics also question how market-based mechanisms, such as catch-shares, would be distributed, traded, and enforced, warning that they would lead to speculative bubbles. Should the United States push for a more defined multilateral strategy to cope with the melting Arctic? Yes: The melting Arctic holds important untapped political, strategic, and economic potential for the U.S. government, military, and businesses. This emerging frontier could potentially support a variety of economic activities, including energy exploration, marine commerce, and sustainable development of new fisheries. Countries such as Russia, Canada, Norway, and China have already made claims to the region, yet the United States remains on the sideline without a comprehensive Arctic strategy. The UN Convention on the Law of the Sea remains the premier forum of negotiating and arbitrating disputes over contested territory. As a nonparty, however, the United States loses invaluable leverage and position. In addition, the U.S. military does not have a single icebreaker, whereas Russia operates over thirty. Experts argue that the U.S. government should also adopt the recently proposed Polar Code, which is a voluntary agreement that "sets structural classifications and standards for ships operating in the Arctic as well as specific navigation and emergency training for those operating in or around ice-covered waters." No: Opponents argue that Arctic Council activities and the 2009 National Security Presidential Directive and Homeland Security Presidential Directive, which updated U.S. Arctic policies, are sufficient. Any collaboration with Canada to resolve disputes over the Northwest Passage might undermine freedom of navigation for U.S. naval assets elsewhere, especially in the Strait of Hormuz and the Taiwan Straits, and this national security concern trumps any advantages from collaborating on security, economic, or environmental issues in the Arctic. Last, given the dominant Russian and Canadian Arctic coastlines, future Arctic diplomacy might best be handled bilaterally rather than through broader multilateral initiatives. Recent Developments January 2014: New Chinese claims in South China Sea On January 1, China imposed new restrictions on foreign fishing vessels entering disputed portions of the South China Sea. The move angered China's neighbors Vietnam, Taiwan, Malaysia, and the Philippines and drew criticism from the United States, where a U.S. State Department spokeswoman called the act "provocative and potentially dangerous." Japan's defense minister claimed that China was "unilaterally threatening the existing international order," especially in light of China's unilateral declaration of an Air Defense Identification Zone (ADIZ) over the East China Sea in November 2013. In recent months tensions have increased throughout the East and South China Seas, as China, Japan, and others claim sovereignty over disputed territories, such as the Senkaku/Diaoyu Islands. December 2013: Ship trapped in Antarctica An international rescue operation commenced in late December 2013 after the Russian vessel Akademik Shokalskiy became trapped in ice while conducting research off the coast of Antarctica. The Chinese icebreaker Xue Long was dispatched to break free the Russian ship. Some passengers were transported to the Xue Long via helicopter, the Xue Long itself became stuck in ice. An Australian vessel then came to their assistance, transporting the rescued crew and passengers to Australia, while a U.S. Coast Guard cutter arrived to break free the Russian and Chinese vessels. While the incident demonstrated a high degree of international cooperation, it also served as a reminder that regulation of vessels in the Antarctic remains weak and many of these vessels are unfit for such harsh environmental conditions. May 2013: New global fishing rules Two new restrictions related to the trade in fish occurred in early 2013, demonstrating a growing effort to preserve marine life. In March, delegates attending the annual meeting on the Convention on International Trade in Endangered Species of Wild Fauna and Flora (CITES) voted to place robust export restrictions on five species of sharks and two species of manta rays. Although experts cautioned that the new rules would be difficult to enforce in practice, the decision marked an important victory over economic interests, particularly of China and Japan. In May, the European Parliament agreed to a sustainable fisheries policy that sets fishing limits to a level that would allow depleted stocks to recover and bans the practice of throwing back fish of unwanted species or size Additionally, in June, the European Union agreed to close loopholes on current restrictions on the practice of finning sharks. April 2013: Japan joins TPP talks Japan agreed to join negotiations over the Trans-Pacific Partnership (TPP), an ambitious free trade agreement between counties along the Pacific rim. Since the broad outline of the agreement was introduced in November 2011, sixteen rounds of negotiations have thus far brought eleven countries together to discuss the TPP. The addition of Japan, a major economic force in the region, as the twelfth participant comes as an important step in creating a robust agreement. Already, the South China Sea is the second-busiest shipping lane in the world, and should the TTP become a reality, transpacific shipping would dramatically increase. The current goal for agreement is October 2013. March 2013: IMO support for new piracy framework At a ministerial meeting in Cotonou, Benin, the International Maritime Organization (IMO) pledged to support the implementation of a new code of conduct on piracy and other illicit maritime activity. The Gulf of Guinea Code of Conduct, drafted by the Economic Community of Central African States and the Economic Community of West African States, in partnership with the IMO, contains provisions for interdicting sea- and land-based vehicles engaged in illegal activities at sea, prosecuting suspected criminals, and sharing information between state parties. The code builds on several existing frameworks to create a sub-regional coast guard. January 2013: Philippines challenges Chinese claims to South China Sea The Philippine government announced its intention to take China to an international arbitration tribunal based on claims that China violated the UN Convention on the Law of the Sea. The dispute dates back to mid-2012, when the Philippines claimed that Chinese vessels were fishing illegally in the Scarborough shoal. The dispute was further exacerbated by joint military exercises conducted by the United States and the Philippines, which reportedly included mock beach invasions. China, Taiwan, Vietnam, Malaysia, Brunei, and the Philippines have competing territorial and jurisdictional claims to the South China Sea, particularly over rights to exploit its potentially vast oil and gas reserves. Control over strategic shipping lanes and freedom of navigation are also increasingly contested, especially between the United States and China. Options for Strengthening Global Ocean Governance There are a series of measures, both formal and informal, that can be taken to strengthen U.S. and global ocean governance. First, the United States must begin by finally ratifying the UN Convention on the Law of the Sea. On this foundation, the United States should then tap hitherto underused regimes, update twentieth-century agreements to reflect modern ocean challenges, and, in some cases, serve as the diplomatic lead in pioneering new institutions and regimes. These recommendations reflect the views of Stewart M. Patrick, senior fellow and director of the International Institutions and Global Governance program, and Scott G. Borgerson, former visiting fellow for ocean governance. In the near term, the United States and its international partners should consider the following steps: Ratify the UN Convention on the Law of the Sea The United States should finally join the UN Convention on the Law of the Sea (UNCLOS), an action that would give it further credibility and make the United States a full partner in global ocean governance. This carefully negotiated agreement has been signed and ratified by 166 countries and the European Union. Yet despite playing a central role shaping UNCLOS's content, the United States has conspicuously failed to join. It remains among only a handful of countries with a coastline, including Syria, North Korea, and Iran, not to have done so.   Emerging issues such as the melting Arctic lend increased urgency to U.S. ratification. By rejecting UNCLOS, the United States is freezing itself out of important international policymaking bodies, forfeiting a seat at decision-making forums critical to economic growth and national security interests. One important forum where the United States has no say is the commission vested with the authority to validate countries' claims to extend their exclusive economic zones, a process that is arguably the last great partitioning of sovereign space on earth. As a nonparty to the treaty, the United States is forgoing an opportunity to extend its national jurisdiction over a vast ocean area on its Arctic, Atlantic, and Gulf coasts—equal to almost half the size of the Louisiana Purchase—and abdicating an opportunity to have a say in deliberations over other nations' claims elsewhere.   Furthermore, the convention allows for an expansion of U.S. sovereignty by extending U.S. sea borders, guaranteeing the freedom of ship and air traffic, and enhancing the legal tools available to combat piracy and illicit trafficking. Potential participants in U.S.-organized flotillas and coalitions rightly question why they should assist the United States in enforcing the rule of law when the United States refuses to recognize the convention that guides the actions of virtually every other nation.   Furthermore, the convention allows for an expansion of U.S. sovereignty by extending U.S. sea borders, guaranteeing the freedom of ship and air traffic, and enhancing the legal tools available to combat piracy and illicit trafficking. Potential participants in U.S.-organized flotillas and coalitions rightly question why they should assist the United States in enforcing the rule of law when the United States refuses to recognize the convention that guides the actions of virtually every other nation. Coordinate national ocean policies for coastal states The creation of a comprehensive and integrated U.S. oceans policy should be immediately followed by similar efforts in developing maritime countries, namely, Brazil, Russia, India, and China (BRIC). These so-called BRIC nations will be critical players in crafting domestic ocean policies that form a coherent tapestry of global governance. Ideally, such emerging powers would designate a senior government official, and in some cases the head of state, to liaison with other coastal states and regional bodies to coordinate ocean governance regimes. Consistent with the Regional Seas Program, the ripest opportunity for these efforts is at the regional level. With UN assistance, successful regional initiatives could then be harmonized and expanded globally. Place a moratorium on critically endangered commercial fisheries Commercial fishing, a multi-billion dollar industry in the United States, is in grave danger. The oceans have been overfished, and it is feared that many fish stocks may not rebound. In the last fifty years, fish that were previously considered inexhaustible have been reduced to alarmingly low levels. Up to 90 percent of large predatory fish are now gone. Nearly half of fish stocks in the world have been fully exploited and roughly one-third have been overexploited. The recent imposition of catch limits on all federally-managed fish species is an important and long overdue first step, which should be expanded and strengthened to a moratorium on the most endangered commercial fisheries, such as the Atlantic blue fin tuna. But tuna is hardly alone in this predicament, and numerous other species are facing the same fate. Policymakers should stand up to intense political pressure and place fishing moratoriums on the most threatened fisheries to give them a chance to rebound. Doing so would be a courageous act that would help rescue collapsing fish while creating a commercially sustainable resource.   In the longer term, the United States and its international partners should consider the following steps: Strengthen and update UNCLOS The UN Convention on the Law of the Sea (UNCLOS) and related agreements serve as the bedrock of international ocean policy. However, UNCLOS is thirty years old. If it is to remain relevant and effective, it must be strengthened and updated to respond to emerging threats such as transnational crime and marine pollution, as well as employing market-based principles of catch shares to commercial fisheries, especially in the high seas. Lastly, UNCLOS Article 234, which applies to ice-covered areas, should be expanded to better manage the opening Arctic, which will be an area of increasing focus and international tension over the coming years.   The international community should also counter the pressure of coastal states that unilaterally seek to push maritime borders seaward, as illustrated by China's claim to all of the South China Sea. Additionally, states should focus on using UNCLOS mechanisms to resolve nagging maritime conflicts, such as overlapping exclusive economic zones from extended continental shelf claims, and sovereignty disputes, such as that of the Spratly and Hans Islands. Bolster enforcement capacity Many ocean-related governance issues have shortcomings not because rules for better management do not exist, but because weak states cannot enforce them. A failure in the oversight of sovereign waters inevitably leads to environmental degradation and, in cases like Somalia, can morph into problems with global implications, such as piracy. Accordingly, the international community should help less developed coastal states build the capacity to enforce (1) fisheries rules fleets; (2) International Convention for the Prevention of Pollution From Ships regulations to reduce ocean dumping and pollution; (3) other shipping regulations in states with open registries such as Liberia, Panama, Malta, and the Marshall Islands; (4) and existing mandates created to stop illicit trafficking. Developed countries should also help less developed areas monitor environmental variables such as acidification, coral reefs, and fisheries.

Introduction Tensions have risen to dangerous levels between Japan and China over a small group of uninhabited islands in the East China Sea, called the Senkaku by the Japanese and the Diaoyu by the Chinese. These islands were once controlled by the United States as part of its post–World War II occupation of Japan and only returned to Japanese administrative control with the reversion of Okinawa in 1971. As Washington prepared to return these islands to Japan, the People's Republic of China (PRC) and Taiwan contested Japan's sovereignty. Two years earlier, a United Nations (UN) geological survey of the East China Sea revealed the potential of significant hydrocarbon resources. Contending sovereignty claims over the islands thus have both historical and resource-related dimensions. Until recently, this territorial dispute was little more than a minor irritant in Sino-Japanese relations. However, against the backdrop of China's growing military power, the island dispute has increased concerns in Tokyo about Beijing's regional intentions and the adequacy of Japan's security, while stoking nationalistic politics in both capitals. Political miscalculation in Tokyo or Beijing, or unintended military interactions in and around the disputed islands, could escalate further, leading to an armed clash between Asia's two largest powers. The United States, as a treaty ally of Japan but with vital strategic interests in fostering peaceful relations with China, has a major stake in averting such a clash and resolving the dispute, if possible. The Contingencies Sino-Japanese tensions in the East China Sea have been building steadily since 2010, when a Chinese fishing trawler rammed two Japan Coast Guard (JCG) vessels in waters near the Senkaku/Diaoyu Islands and Japan detained the captain. Although the crisis was eventually defused, the territorial dispute came to a head again in September 2012, when Japanese prime minister Yoshihiko Noda announced his government's decision to purchase three of the five islands. The islands were privately owned, but a new wave of activism, including Chinese attempts to land on the islands and a public campaign by the Tokyo governor to purchase them himself, prompted Noda to attempt to neutralize nationalist pressures. The decision triggered widespread anti-Japanese demonstrations in China, resulting in extensive damage to Japanese companies operating there. Eventually China dampened the popular response, but it has since repeatedly stated its intent to assert its own administrative control over the disputed islands. China's Marine Surveillance agency intensified its patrols of the waters in and around the islands, and China's Bureau of Fisheries patrols followed suit. The JCG in turn increased its patrols and put them on 24/7 alert. The danger of escalation to armed conflict increased when the two militaries became directly involved. On December 13, 2012, a small Chinese reconnaissance aircraft entered undetected into Japanese airspace above the islands. The JCG alerted Japan's Air Self-Defense Force (ASDF), which scrambled fighter jets based in Naha, Okinawa; however, they were too late to intercept. In January, China sent its reconnaissance aircraft back toward the islands accompanied by fighter jets, but stopped short of entering Japan's airspace, and no direct aerial confrontation occurred. Japan's Maritime Self-Defense Force (MSDF) reported that a Chinese frigate locked its firing radar on the Japanese destroyer Yudachi on January 30, 2013. Chinese authorities instigated an investigation into the incident in response to Japan's protest, leading to speculation that Beijing was unaware of the ship captain's actions. Although China's Ministry of Defense later denied that the incident took place, it did acknowledge the danger such an act posed. Given current circumstances in the East China Sea, three contingencies are conceivable: first, an accidental or unintended incident in and around the disputed islands could trigger a military escalation of the crisis; second, either country could make a serious political miscalculation in an effort to demonstrate sovereign control; and third, either country could attempt to forcibly control the islands. Accidental/Unintended Military Incident Although recent incidents have sensitized China and Japan to the risk of accidental and unintended military interactions, the danger will persist while emotions run high and their forces operate in close proximity. In stressful and ambiguous times, when decision-making is compressed by the speed of modern weapons systems, the risk of human error is higher. The 2001 collision between a U.S. reconnaissance aircraft and a Chinese fighter jet near Hainan Island is a case in point, as was the intrusion of a Chinese Han submarine in Japanese territorial waters in 2004. So-called rules of engagement (ROEs), intended to guide and control the behavior of local actors, are typically general in scope and leave room for personal interpretation that may lead to actions that escalate a crisis situation. Compounding the risk of unintended escalation between Chinese and Japanese air and naval units is the unpredictable involvement of third parties such as fishermen or civilian activists who may attempt to land on the islands. Their actions could precipitate an armed response by either side. Political Miscalculation in an Effort to Demonstrate Sovereign Control Political miscalculation of either country's intent or resolve, as well as miscalculation of the U.S. position, could lead to armed conflict. First, Japan and China are already finding it difficult to read each other's actions. Past Japanese government leasing of the Senkaku/Diaoyu Islands effectively kept nationalist activists—Japanese as well as Chinese and Taiwanese—at bay. In mid-2012, however, rising nationalist sentiments during leadership transitions inflamed the dispute. This stimulated heated debate in Tokyo over how to consolidate Japanese sovereignty and was a factor in the December 2012 election of conservative prime minister Shinzo Abe, who advocated inhabiting the islands. This escalation in asserting sovereignty claims through the use of patrols, populating the islands, and perhaps even military defense of the territory could lead to heightened tensions between the two countries and whip up nationalist sentiments, potentially limiting the capacity of leaders to peacefully manage the dispute. Second, China could miscalculate U.S. interests and intentions. Since last year, U.S. policymakers have sought to lessen tensions but have also taken steps to clarify the U.S. role in deterring any coercive action by China. U.S. and Japanese forces have conducted regular exercises to strengthen defense of Japan's southwestern islands and maritime surveillance capabilities. Both former secretary of state Hillary Clinton and former secretary of defense Leon Panetta clearly stated that the United States will defend Japan against any aggression, and on November 29, 2012, the U.S. Senate passed a resolution accompanying the 2013 National Defense Authorization Act to demonstrate congressional support for the Obama administration's commitment to Japan's defense. As tensions escalated late last year, Washington increased its deployments in and around Japan. Early this year, as military interactions raised the potential for conflict, Clinton restated the U.S. position that it would not accept any unilateral attempt to wrest control of the islands. Still, Beijing could miscalculate Washington's commitment to defend Japan and/or seek to test that commitment. Finally, U.S. assurances could lead Tokyo to overestimate Washington's response and to act in a manner that would increase the chance for confrontation. To date, however, Tokyo has tended to err on the side of caution in planning and exercises with U.S. forces, and it is unlikely Japan would act without evidence of U.S. assistance. Deliberate Action to Forcibly Establish Control Over Islands Although this seems highly unlikely today, either party could take military action to assert sovereignty over the disputed islands. Rising domestic pressures or an unexpected opportunity for a fait accompli could lead to a decision by either government to establish military control over the territory. Warning Indicators Although it seems that neither Tokyo nor Beijing wants to use force to pursue its interests in the territorial dispute, it is possible that either government could choose to do so in the future. Indicators of a strategic decision by either country to escalate tensions include: Introduction of Japanese or Chinese military forces on or in the vicinity of the islands to claim or defend sovereignty. Japan and China have kept their militaries distant from the disputed islands; a military presence would intensify the dispute and raise the probability of armed conflict. Deliberate use of economic sanctions. China's informal embargo on rare-earth exports to Japan during the 2010 crisis and the setback to Japanese investment in the latter half of 2012 suggest a new role for economic instruments of pressure in this dispute. The imposition of sanctions (i.e., embargos, boycotts, or blockades) to harm economic performance would signal a desire to escalate conflict. Government action to reduce conspicuously economic dependence would be a lesser but equally important indicator of a strategic shift. Government-sponsored nationalist activism. Nationalist activism has until now come from a host of social actors, including fishermen, local politicians, and advocacy groups. A deliberate effort by either government to stimulate popular nationalism against the other nation would signal a shift in intentions away from resolving the territorial dispute peacefully. Government calls to mobilize popular support for the defense of the islands, lift regulatory controls over access to the islands, or elect leaders who advocate sustained confrontation over the sovereignty dispute would be indicators of a strategic shift in the conflict. Short of a deliberate effort to exert physical control over the Senkaku/Diaoyu Islands, several specific indicators raise the likelihood of an inadvertent clash between Japan and China: Incident involving the loss of life in the waters off the disputed islands. No lives have been lost over the disputed islands, but should these interactions result in the loss of life, crisis management would be a serious challenge for both governments. China's Bureau of Fisheries and its Marine Surveillance patrols have increased the tempo of operations near the disputed islands. JCG ROEs give ship commanders the authority to respond; the ROEs for Chinese paramilitary agencies are less clear. In addition, fishing boats from Taiwan accompanied by their coast guard have periodically complicated the standoff. A protracted airborne standoff between Japanese and Chinese forces in the East China Sea. China's intrusion into Japan's airspace prompted Prime Minister Abe's cabinet to review its air defenses. Heightened Japanese sensitivity over the territorial dispute with China could raise the stakes for Japan's air force if Chinese forces test their readiness in the vicinity of the islands. Loss of national command control over local commanders. Local commanders could act independently in ways that are interpreted as presaging hostile intent (such as the Chinese radar lock on Japanese forces), which could trigger a defensive response that escalates the crisis. Local commanders will be hard-pressed to remain calm should interactions increase near the islands, especially if miscalculations continue. Postwar constitutional constraints on Japan's military have produced well-articulated principles and procedures for civilian control over the SDF, with clearly established ROEs and careful central government oversight over local forces. Civil-military command structures in China are less clear and not well described. Moreover, the degree of oversight of local commanders by Beijing is also unknown. Strong central government command over local forces will be absolutely essential to avoid unintended incidents from escalating. Implications for U.S. Interests The United States has major interests at stake in the growing tension between Japan and China. Three risks in particular stand out: Risk of armed hostilities with China. U.S. forward-deployed forces are deeply integrated with Japan's SDF and assist with intelligence, surveillance, and reconnaissance (ISR) support, as well as exercises designed to enhance Japan's defense capabilities. U.S. forces may be asked to assist Japan's SDF in the case of a broader military conflict, and would likely provide logistical support as well as continued ISR collaboration. Direct armed conflict with China would harm a broad array of vital U.S. economic, political, and strategic interests. Risk to U.S.-Japan alliance. The U.S. response to a Japan-China conflict would determine the future of the U.S.-Japan alliance, as well as other alliances in the Asia Pacific. Tokyo remains concerned that Washington might not fulfill its treaty obligations if Beijing escalates the conflict, and U.S. government statements of its intentions notwithstanding, domestic perceptions in Japan of U.S. hesitancy in the case of Chinese coercion will shape Japan's future security choices. Japan's postwar policy of military self-restraint and reliance on the United States for strategic protection, including its continued abnegation of nuclear weapons, would likely come to an end if the United States chose not to defend Japan against Chinese aggression. Risk to regional stability. China's dispute with the Philippines over the Scarborough Reef in the South China Sea has set a particularly dangerous precedent. Many leaders in the Asia-Pacific region are beginning to see China's maritime behavior as unpredictable and will be watching to see if Washington ultimately resists or accommodates Chinese military pressure on its periphery. The Japanese case will be decisive not only for Japan's future choices but for many other allies and friends in the region adjusting to the rise of China. Preventive Options The United States has considerable interest in doing all that it can to prevent armed conflict between Japan and China. The policies for preventing such a conflict include the following steps. Deter and Dissuade Unilateral Actions to Contest Japan's Administrative Control of the Islands Washington can regularly and consistently communicate its interest in, and position on, the island dispute to avoid ambiguity in the U.S. security commitment to Japan. Privately, Washington could also communicate to both capitals the need to avoid statements and assertions that would incite popular sentiments on the dispute and encourage peaceful dispute resolution. To deter potential Chinese assertiveness, the United States can consult closely with Japan on its response to Chinese activities near the disputed islands, and can ensure seamless U.S.-Japan defense cooperation. To counter any impulse toward Japanese assertiveness, Washington and Tokyo should confirm the conditions under which U.S. defense assistance would be rendered. Japan's leaders remain committed to limiting their use of military force to defensive missions. Should that change, U.S. policymakers should revisit the terms of defense assistance. U.S. forces can also assist Japanese agencies in a maritime emergency, should an incident involving the Japanese and Chinese militaries occur. For example, Washington can urge Tokyo to update communications and exercises between the JCG and MSDF, providing assistance if needed. To date, there has been little need for Japan to integrate its civilian maritime policing with its defense operations. As Chinese maritime forces in the East China Sea expand and the distinction between civil and military maritime forces becomes less clear, Japan can develop its planning and capabilities for sharing maritime missions. A special JCG task force at the eleventh regional headquarters in Okinawa has responsibility for the Senkaku/Diaoyu area, and a U.S. liaison team could be assigned there as well as onboard JCG vessels. Data links and other communications upgrades could be added, along with real-time exercises between the JCG and MSDF, which could include consultations with relevant U.S. forces. Risk-Reduction Measures for the East China Sea Crisis management protocols are needed for Chinese and Japanese maritime and aerial forces in the East China Sea. The United States can encourage a bilateral agreement between Japan and China along the lines of the U.S.-China Military Maritime Consultative Agreement. In May 2012, the first Japan-China High-Level Consultation on Maritime Affairs was held in Hangzhou, China, and in June, Tokyo and Beijing concluded an agreement to establish crisis communications, including a hotline. Japan and China can be encouraged to restart this initiative and push forward with consultations on a search-and-rescue agreement. A multilateral code of conduct in the East China Sea, modeled on the Association of Southeast Asian Nations (ASEAN) code of conduct in the South China Sea, could also be considered. This would require participation by South Korea, in addition to Japan and China, and could be pursued in trilateral China-South Korea-Japan talks or in a new forum with Chinese, Japanese, South Korean, and U.S. participation. Military interactions between Japanese and Chinese forces can also be more predictable if regular bilateral military-to-military consultations are held. Recent tensions with China have increased worries in Tokyo about China's long-term intentions. To ease these heightened concerns, the United States could encourage Beijing to be more transparent about its maritime strategy and strategic goals. Diplomatic Efforts to Manage (or Resolve) the Territorial Dispute Preventing armed conflict between Japan and China over the Senkaku/Diaoyu Islands dispute ultimately depends on Beijing and Tokyo finding a mutually acceptable framework for managing their differences. An active diplomatic effort to embed the island dispute in a stronger and more constructive Japan-China relationship will be needed and could be encouraged by Washington. Several options exist for managing the dispute. The first, and most preferable, is a bilateral diplomatic effort. Since 1978, both governments have sought to control their citizens from seeking access to the islands. The Japanese government's decision to preempt activist purchase of the islands does not preclude a return to the status quo ante. Second, Washington could encourage Beijing and Tokyo to explore new collaborative formulas for managing their island dispute. Developing proposals for transforming the islands into a nature preserve or some other entity that would restrict human access could also offer a way to demilitarize the dispute. However, this approach seems unlikely to attract attention in either Beijing or Tokyo at the moment. Third, if the dispute cannot be managed peacefully through bilateral negotiations, Japan and China could be encouraged to seek international adjudication. The International Court of Justice (ICJ) could be asked to open a hearing. Beijing, having challenged Japan's sovereignty claim in 1971, should initiate the ICJ adjudication process. Washington should not expect Tokyo to take the first step, but should encourage Tokyo to respond if Beijing were to submit the dispute for international mediation. Finally, Japan and China could be encouraged to develop cooperation in the management of their East China Sea maritime boundary. The East China Sea is 360 nautical miles wide, falling short of the 400 nautical miles that would be required to enforce the UN Convention on the Law of the Sea (UNCLOS), which defined 200-mile exclusive economic zones. While Japan argues for the establishment of a median line halfway between the two coastlines, China argues for an exclusive economic zone based on its extended continental shelf. This contested maritime boundary exacerbates the unpredictability of interactions between Japanese and Chinese forces across the East China Sea. Japan and China should be urged to implement their 2008 joint development agreement for exploring hydrocarbon resources in the East China Sea to build trust and cooperation in maritime management. Mitigating Options Should a military conflict erupt between China and Japan, the United States can react in several ways to contain and minimize the threat to its interests. The U.S. response would depend on the scale of the armed clash. Options for U.S. policymakers include: Urge Tokyo to stand down. Withholding U.S. military support could change Japan's strategic calculus in the context of a conflict. This option would create a severe backlash against the United States in Japan and fatally undermine the bilateral alliance. Appeasing Beijing would also embolden China to use force against other U.S. allies in the region. Contain any inadvertent incident involving the use of force. In the event of an incident between Japanese and Chinese forces, Washington could immediately use all means at its disposal to communicate to both Tokyo and Beijing its interest in preventing an armed clash from escalating. The U.S. military could offer search-and-rescue assistance for any vessel and crew involved in an armed clash. Communications with Beijing may prove difficult, but all means, including the hotline and crisis communication mechanisms outlined in the U.S.-China Military Maritime Consultative Agreement, could be used to encourage a stand-down of forces. Real-time communication between Japan's chief of joint staff and the commander of U.S. Forces–Japan will make local military coordination with Tokyo easier, but immediate attention should be given to communication between the U.S. president and the Japanese prime minister on how to control the situation. Plan for southwestern island contingency in U.S.-Japan defense cooperation. Washington and Tokyo could continue regular exercises and planning to deter, and, if necessary, defend Japan against an armed attack. Japan may ask the United States to assist should China unilaterally opt to take military action to occupy the disputed islands. The scale and timing of that assistance will depend on the scale of attack. If the conflict were to expand beyond the disputed islands to become an all-out military clash between Japan and China, the United States should be prepared for integrated defense operations ranging from maritime and air defenses to ballistic missile defense as requested by Japan. Call for an emergency session of the UN Security Council. This option would engage the UN in the effort to de-escalate the crisis, although China's seat on the Security Council could limit the effectiveness of UN action. Nonetheless, the UN could facilitate a ceasefire and a negotiated end to hostilities. Impose economic sanctions on Beijing. Washington could impose sanctions on financial transactions, the movement of goods and services, and travel between China and the United States. However, China can retaliate in kind by barring U.S. exports, curtailing or ending purchases of U.S. treasuries, and limiting investment flows. Threaten China with a U.S. military response to any use of force against Japan. Washington could adopt a strategy of escalating any use of force to gain control over the Senkaku/Diaoyu Islands into a U.S.-Japan coordinated response designed to repel Chinese forces and establish Japanese military control over the disputed islands. This could severely damage the United States' relations with China. Recommendations The United States should pursue three policy goals: promote de-escalation of the dispute, initiate crisis management consultations with Japan, and intensify efforts to create multilateral maritime risk reduction mechanisms in the Asia-Pacific region. More specifically: The United States should consistently and clearly reiterate its treaty obligation to assist in Japan's defense if China uses force to resolve the dispute over the islands. Until the risk of miscalculations subsides between Japan and China, the United States should continue to make clear its long-standing position that the Senkaku/Diaoyu Islands are covered by the U.S.-Japan security treaty. The United States should continue to encourage China and Japan to seek peaceful resolution of the dispute and remind Beijing that the unilateral actions of other powers will not change U.S. recognition of Japan's administrative control over the islands. Secretary Clinton's January 18, 2013, statement, reiterated by Secretary John Kerry on April 15 in Tokyo, offered a valuable clarification of the U.S. position. Washington should condemn harshly the use of force to settle this dispute. The United States should urge Japan and China to avoid any steps that might escalate tensions in and around the disputed islands. Washington should encourage Tokyo to continue to avoid populating the islands or deploying military forces to defend its control so long as there are no efforts by Beijing to seize control of the islands. The United States should encourage China to restart High-Level Consultations on Maritime Affairs with Japan and to implement their agreement to establish crisis management communications. The United States should continue to advocate for transparency between maritime forces in the East China Sea and the development of mechanisms for confidence building. As China's maritime power grows, greater comfort with the procedures and prohibitions on interactions with military and nonmilitary vessels, including aircraft, across this increasingly crowded sea will be required. Opportunities for Chinese participation must be expanded in existing regional maritime cooperation, such as the annual Rim of the Pacific exercises, regular regional fisheries exercises, and coast guard exercises dedicated to search-and-rescue operations and humanitarian assistance. The United States should also encourage the countries of Northeast Asia to develop Incidents at Sea agreements. Should China initiate the use of force against Japan, the United States should be fully prepared to provide military assistance to Japan. The United States should maintain the requisite capability and readiness to fulfill its commitment to assist in defending Japan. The United States and Japan should develop clear alliance crisis management procedures for an incident or armed clash in and around the disputed islands. Washington and Tokyo should design plans to manage a military clash between Japanese and Chinese militaries, including how to control escalation and communicate effectively with Beijing. Past U.S. and Japanese incidents with Chinese forces should be closely examined as the basis of an alliance response. Containing escalation should be the highest priority for alliance crisis management. The United States and Japan should continue to improve defense consultations and exercises designed to enhance Japan's southwestern defenses. The island dispute exacerbates an increasing trend of interaction between Chinese and Japanese forces in Japan's southwest. As Chinese naval strength grows, these interactions are likely to increase, raising concern that Chinese military presence in and around Japan could impinge on the United States' ability to assist in Japan's defense. Washington and Tokyo should improve ISR and amphibious landing cooperation and strengthen Japan's air defenses. The United States should strongly encourage China to expand consultations with its maritime neighbors on its evolving strategy. China's rise is creating deep uncertainty about its longer-term intentions regarding the use of its military power. Washington should continue regular regional security consultations in the ASEAN Regional Forum and encourage annual meetings of regional defense ministers. Open sea lanes, including antipiracy operations, are the lifelines of Asia's growing economy, and the United States should continue to advocate freedom of navigation. Finally, the United States should ratify the UN Convention on the Law of the Sea in order to become a more forceful actor in global deliberations over maritime rights and sovereignty dispute resolution. In both the East and South China Seas, China's neighbors are seeking the adjudication of maritime disputes in UNCLOS. The United States cannot shape the maritime debate in the Asia Pacific or defend its own maritime interests if it is not a full participant in international maritime deliberations.