The failure of the annual ministerial meeting last week at the ASEAN Regional Forum in Phnom Penh, Cambodia will be a turning point for the region and a catalyst for more serious clashes over the South China Sea between China and the Philippines and Vietnam. What is more, the aftermath of the summit is shaking the core of ASEAN.

In the run-up to the summit, member countries and observers rightly saw an agreement for a “code of conduct” in the South China Sea by ASEAN and China as imperative for preventing increasing clashes between claimant naval and fishing vessels from escalating into a full-blown conflict.

Indeed, in the meetings between foreign ministers before the summit there was word that an agreement was at hand. However, as I wrote in this space last week, China would not be amenable to a binding code of conduct within a multilateral framework of ASEAN because it would constitute a major reversal of longstanding policy of preferring bilateral negotiations, where China has leverage over its smaller neighbors, and of opposing “internationalizing” the South China Sea disputes.

Needless to say, an agreement was ultimately not concluded, nor was there a joint statement issued at the end of the summit. The summit was a catastrophe.

There is also suspicion that when the Philippine foreign minister Albert del Rosario tried to bring up the South China Sea issue during the summit, as this Reuters article details, his microphone was cut off. The Cambodian hosts claimed that it was a technical glitch that felled his microphone but the timing of the malfunction is certainly suspect.

Cambodia, a major recipient of Chinese aid to the tune of $1.2 billion, ten times what it receives from the United States, was suspected by some of being vulnerable to Chinese pressure in order to control the agenda.

Analysts have pointed to the state visit of China’s president Hu Jintao to Phnom Penh in April, the first by a Chinese head of state in twelve years, where new trade deals were announced as pressure to ensure that Cambodia, the current ASEAN chair, not allow the South China Sea disputes to be placed on the agenda of the July meeting.

In the Reuters article, unnamed diplomats who were at the ASEAN summit said that Cambodia even resisted Indonesia’s last-minute attempt at brokering a joint statement because Cambodia did not want any reference to Scarborough Shoal included.

Finally, last Wednesday, after recriminations were mounting over the failed summit, the Philippine Foreign Ministry released an extraordinary document rebutting what it called the “fictions” being perpetrated by “unnamed countries” but also placing blame squarely on Cambodia for not gaining a consensus on a code of conduct in the South China Sea.

The ramifications are that for the first time since its existence an outside power, China, has been able to exploit the internal differences within ASEAN. The foundation of ASEAN, its unity and consensus on common issues, has therefore been breached with China leveraging its economic aid to a member country, Cambodia. Thus, the delicate balancing act by ASEAN countries between China and the American order in the Pacific is showing deep cracks and threatening to fall apart over the disputes in the South China Sea.

China no doubt won a tactical victory using the Cambodians to block the issue from the agenda and thus becoming isolated but in the long run, it is only generating deep resentment from ASEAN countries as well as the other powers in East Asia. As such, China’s heavy handed diplomacy will only result in its isolation in the region and the increasing probability of hostilities breaking out with the Philippines or Vietnam including the nightmare scenario of involving the United States.