Tensions loom as Obama meets Japan, China leaders

PHNOM PENH (Reuters) - In his first meeting with a Chinese leader since his re-election, U.S. President Barack Obama said on Tuesday Washington and its chief economic rival must work together to "establish clear rules of the road" for trade and investment.

His comments on the final leg of a three-day Southeast Asian trip follow a U.S. election campaign in which China was repeatedly accused of unfair trade practices and illustrate the work ahead in a region already simmering with tension over territorial disputes involving Beijing.

"It is very important that as two of the largest economies in the world that we work to establish clear rules of the road internationally for trade and investment," Obama told Chinese Premier Wen Jiabao before an East Asia Summit of Asia-Pacific leaders in the Cambodian capital Phnom Penh.

Divisions over Chinese sovereignty claims in the South China Sea marred a Southeast Asian leaders' summit on Monday and roiled a July meeting of the Association of Southeast Asian Nations (ASEAN) where foreign ministers failed to agree on a communiqu? for the first time ever.

"I'm committed to working with China and I'm committed to working with Asia," Obama said. China and the United States had a "special responsibility" to lead the way on sustained global growth, he added before the meeting was closed to media.

Wen highlighted "the differences and disagreements between us" but said these could be resolved through trade and investment.

Japanese Prime Minister Yoshihiko Noda told Obama earlier that mounting Asian security problems raise the importance of the U.S.-Japan alliance, a veiled reference to tensions over Chinese sovereignty claims and maritime disputes.

"With the increasing severity of the security environment in East Asia, the importance of the Japan-U.S. alliance is increasing," Noda told Obama in a bilateral meeting in Phnom Penh.

Obama is expected to raise Asia's divisive territorial disputes in closed-door meetings later on Tuesday at the East Asia Summit, which also includes leaders from ASEAN, India, South Korea, Australia and New Zealand.

ASEAN includes Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, the Philippines, Singapore, Thailand and Vietnam.

ASEAN Secretary-General Surin Pitsuwan insisted Southeast Asia remained united, even as U.S. ally the Philippines objected to Cambodia's statement on Monday that ASEAN agreed not to "internationalize" the maritime dispute ? diplomatic code for saying it would resolve the issue without U.S. involvement.

"We're not going to allow the issue to cloud or to affect other pursuits that we're doing together here," Surin told reporters.

China's claims of sovereignty over the South China Sea set it directly against Vietnam and the Philippines in one of Asia's most divisive and vexing security problems. Brunei, Taiwan and Malaysia also lay claim to parts of the sea.

Sino-Japanese relations are also under strain after the Japanese government bought disputed islands known as Senkaku in Japan and Diaoyu in China from a private Japanese owner in September, triggering violent protests and calls for boycotts of Japanese products across China.

China says both disputes involve sea-lanes vital for its economy.

"It's going to be very important for us to coordinate effectively to promote jobs and growth, trade and investment throughout the Asia Pacific region," Obama told Noda.

"HOW CAN THERE BE A CONSENSUS?"

China prefers to address conflicts through one-on-one talks.

On Monday, Noda challenged efforts by summit host Cambodia, a staunch China ally, to limit discussions on the mineral-rich sea.

Cambodia had said Southeast Asian leaders had agreed not to internationalize the South China Sea row -- a claim that was strongly disputed by Philippine President Benigno Aquino who raised the possibility of finding an "alternative route" to discuss the issue with countries outside the 10-member ASEAN.

Alternative diplomatic routes for the Philippines would likely involve the United States, one of its closest allies, which has said it has a national interest in freedom of navigation through the South China Sea's vital shipping lanes.

"How can there be a consensus? A consensus means 100 percent," said Philippine Foreign Minister Albert del Rosario. "It was translated into a consensus without our consent."

ASEAN on Sunday agreed to formally ask China to start talks on a Code of Conduct (CoC) aimed at easing the risk of naval flashpoints, according to Surin. But Wen played down the need for urgent action in talks on Sunday night with Cambodian Prime Minister Hun Sen.

Late on Monday, Obama and Southeast Asian leaders launched a trade initiative known as the U.S.-ASEAN Expanded Economic Engagement, which is aimed at smoothing a path for Asian nations to link up with the Trans-Pacific Partnership, a pact the United States is negotiating with 10 Asian countries and the Western Hemisphere, the White House said.

The Trans-Pacific Partnership excludes Chinese participation until it undertakes significant economic reforms.

(Additional reporting by Mark Felsenthal, Stuart Grudgings, Prak Chan Thul and James Pomfret, and Jutarat Skulpichetrat; Writing by Jason Szep; Editing by Raju Gopalakrishnan)

Source: http://news.yahoo.com/asia-tensions-loom-obama-meets-japan-china-leaders-054612574.html

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