Powder Keg in the Pacific - By Rowan Callick

Over the past decade, East Asian countries have surprised observers with their eagerness to work together. After all, this is a region where ancient (and not-so-ancient) hatreds run deep. But observers shouldn't get their hopes up: Modern rivalries and historical baggage still stand in the way of transforming these arrangements into genuine regional cooperation.

On paper, progress appears to be occurring rapidly. In 2010, China, Australia, and New Zealand implemented free trade arrangements with the Association of South East Asian Nations (ASEAN), providing preferential access to each others' markets. China, Japan and South Korea are negotiating a free trade agreement. Even erstwhile enemies China and Taiwan entered into an economic agreement that reduces trade barriers such as tariffs and quotas on both sides: trade between Taiwan and China reached $128 billion in 2011, a 13 percent increase from the previous year, when the agreement went into effect.

But East Asia's patchwork of economic alliances is weighed down by history and hobbled by ineffective security arrangements. The region's three biggest flashpoints stretch back decades, if not centuries, and are like volcanoes -- mostly dormant but occasionally deadly. Besides the French, U.S., and Chinese wars with Vietnam, the last full-on slugfest was the Korean War, which ended almost six decades ago. But its repercussions linger until the present day: North Korea and the United States never signed a peace treaty and technically remain at war. Similarly, Imperial Japan's invasion of China, Korea, Taiwan, and practically all of Southeast Asia was the greatest cause of upheaval in 20th century Asia. World War II also remains far more politically explosive in Asia than it does in the United States -- as the July torpedoing of a South Korean-Japan military pact because of lingering anti-Japanese sentiment shows.

If Japan is weighed down by its historical baggage, so is China. After Chinese guerrillas kicked out the Japanese in 1945, Mao Zedong and his Communists drove Chiang Kai-shek and the Nationalists to Taiwan in 1949, an island China still claims (and at which it still points an estimated 1,000 missiles). In July, China celebrated the creation of Sansha City, a flyspeck of 3,500 people that China claims administers about 770,000 square miles of the South China Sea. That claim grates on the five other countries (plus Taiwan) that consider parts of the sea as their territory. Philippines President Benigno Aquino seemingly spoke for everyone in the region when he said in July, "If someone enters your yard and told you he owns it, will you allow that?"

China, Japan, and Taiwan also bitterly contest the uninhabited islands known as Diaouyu in China and Taiwan, and Senkaku in Japan, which lie near Taiwan, China, and the Japanese island of Okinawa. The issue strikes a nationalist chord among the rival nations: Tokyo's governor Shintaro Ishihara mischievously suggested in June that a panda cub due to be born in Tokyo zoo should be named Sen-Sen or Kaku-Kaku.

You might think that East Asian countries, which are increasingly wealthy and stable, would seek regional allies to help protect their own interests and defend their sovereignty. But this is a region of shifting diplomatic sands, and mistrust continues to stymie apparently rational arrangements. Incredibly, there is only one regional alliance that requires a military response to an attack -- it's between China and North Korea, an agreement "sealed in blood," as China's Defense Minister Liang Guanglie described it in 2009.