EU's statement on South China Sea reflects divisions

BRUSSELS (Reuters) - The European Union issued a statement on Friday noting China’s legal defeat over the South China Sea but avoided direct reference to Beijing, reflecting discord among EU governments over how strongly to respond to the court ruling.

Chinese ships are seen during a search and rescue exercise near Qilian Yu subgroup in the Paracel Islands, which is known in China as Xisha Islands, South China Sea, July 14, 2016. REUTERS/Stringer

While the European Union is neutral in China’s dispute with its Asian neighbors in the South China Sea, Britain, France and Germany want to make clear that Beijing must uphold international law as it seeks a bigger global role.

But speaking with one European voice has become difficult as some smaller governments, including Hungary and Greece, rely on Chinese investment and are unwilling to criticize Beijing despite its militarization of South China Sea islands.

Croatia and Slovenia have their own maritime dispute and are worried about setting precedents by coming out too strongly in favor or against the court in The Hague that ruled on the South China Sea case, the Permanent Court of Arbitration.

In the statement of all 28 EU governments, the bloc acknowledged Tuesday’s ruling in The Hague and said it was “committed to maintaining a legal order of the seas and oceans.”

After three days of difficult talks in Brussels to reach a common position, the European Union said all sides should resolve the maritime dispute “through peaceful means, to clarify their claims and pursue them in respect and in accordance with international law.”

EU governments said they supported a “swift conclusion” on talks for a so-called code of conduct for the South China Sea, a vital waterway through which $5 trillion of trade passes a year.

In the case brought by the Philippines, the court ruled on Tuesday that Beijing’s claim to 85 percent of the sea violated Manila’s economic and sovereign rights under the 1982 U.N. Convention on the Law of the Sea.

The United States and Japan responded by urging China to respect the court’s decision. China has refused to recognize it.

“It is not easy to speak with one voice,” said a senior EU diplomat. “We have no issue with a peaceful settlement, but the way we phrase the statement is very sensitive.”

Beijing’s envoy to Washington said the verdict would “intensify conflict and even confrontation”, though he said Beijing remained committed to negotiations in disputes over the vital trade route.

Reporting by Robin Emmott; Editing by Janet Lawrence