On July 24, the European Union and the Philippines signed a statement announcing that they were significantly expanding their cooperation on defence, maritime security and strategic resilience.This also comes as the EU negotiates a free trade agreement with the Philippines.Why is the EU deepening ties with the Philippines at this moment? The answer lies in the archipelagic nation’s location — the South China Sea, an area where China has long made territorial claims. And as the US slowly takes a backseat in the Indo-Pacific, the EU appears to be taking on a greater role.Why is the South China Sea so important for a grouping in a different part of the world? How is the EU getting involved? We explain.First, what is the South China Sea dispute?The South China Sea is situated just south of the Chinese mainland and is bordered by Brunei, China, Indonesia, Malaysia, Philippines, Taiwan and Vietnam. The countries have bickered over territorial control in the sea for centuries, but tensions have soared to new heights in recent years as an increasingly powerful China looks to assert more power over the region. Competing claims in the South China Sea.In 2016, the Philippines filed an arbitration case in an international tribunal, seeking to strike down China’s expansive territorial claims in the sea, and won. Ten years on, however, that has done little to dissuade China from flexing its muscles. Both countries’ vessels have had several tense face-offs in the region for years now.What is the EU doing?Security is a key part of the EU-Philippines agreement. As part of the pact, the EU has approved its first-ever security assistance measure in the Indo-Pacific under the European Peace Facility (EPF), worth €15 million (about $17 million).Story continues below this adThe assistance measure is expected to strengthen the Philippines’ “maritime domain awareness” while supporting freedom of navigation and respect for international law, an EU Spokesperson at the European Commission’s (EC) offices in Brussels told The Indian Express.Simply put, this is an investment in the Philippine Navy’s non-lethal capabilities — especially surveillance and monitoring. This may help the coastal state to independently track and deter “gray-zone coercion” in contested waters of the South China Sea.Also Read | South China Sea back in spotlight: What’s happening and why it matters“Gray-zone coercion” refers to actions just short of open conflict that are meant to pressure or intimidate another country. These include using coast guard vessels, water cannons or aggressive manoeuvres in disputed waters — an apt description for China’s playbook over the years.The Philippines is not an isolated partner. Rather than building a formal military alliance, Brussels is developing a network of security partnerships across Southeast Asia and the Indian Ocean, focused on areas such as maritime security and information-sharing. India is also a partner.Story continues below this adSo what’s in it for the EU? To understand that one must understand the importance of the South China Sea.What’s the importance of the South China Sea?There are 11 billion barrels of oil and 190 trillion cubic feet of natural gas in deposits under the South China Sea, according to the estimates of the US Energy Information Agency.Moreover, the sea is home to rich fishing grounds — a major source of income for millions of people across the region. The BBC reported that more than half of the world’s fishing vessels operate in this area.Most significantly, the sea is a crucial trade route. The UN Conference on Trade and Development estimates that over 21% of global trade, amounting to $3.37 trillion, transited through these waters in 2016.Story continues below this adWhat is the EU looking to achieve here?Around 40% of the EU’s external trade passes through the South China Sea, the spokesperson quoted above said.“This assistance measure for the Philippines reflects the EU’s growing engagement as a security partner in the Indo-Pacific. The region is increasingly important for the European Union because its stability, maritime security and respect for international law directly affect our own security and economic interests,” the spokesperson said.Importantly, these strategic moves come at a time when the US’s relationship with the Indo-Pacific is changing. Its role as the region’s main security guarantor is being challenged as it deals with crises around the world. The country has also been calling upon its allies to step up their defence engagements.Ken Moriyasu, Senior Fellow at the Hudson Institute, told The Indian Express: “The Donald Trump administration is otherwise preoccupied with their engagements in Iran and Ukraine. It currently doesn’t possess the capacity — diplomatically, militarily or economically — to sustain heightened tensions with China. Naturally, the US is unlikely to raise tensions with China over the Philippines simply because their priorities dictate otherwise.”Story continues below this adThis is where the EU comes in. Manjeev Singh Puri, former Indian ambassador to the EU, told The Indian Express: “They are trying to become a pole — an interesting development since it might lay a possible foundation for the start of multi-polarity within a Western context.”“The EU is trying to signal to the international community that they are no longer seeking shade under the American security blanket. This is visible through their push for strategic autonomy in conjunction with their NATO commitments,” Puri said. “This step, however, doesn’t diminish their relations with China but is a signal that they are more than just an economic power in an evolving world.”“The trajectory of the US-China relationship has not changed”, Moriyasu said. “The EU stepping in to offer their support to the Philippines is surely to be viewed favourably by both the US and more importantly, the Philippines, considering their positioning in the region.”Still many hurdlesThe way forward for the EU in its hopes of establishing permanence to a rules-based order in the Indo-Pacific still faces many hurdles.Story continues below this ad“At the 10th anniversary of the South China Sea arbitration award, there were a host of countries that publicly supported the ruling. Interestingly, what stood out was the countries that were absent — of which there were a fair few. It was telling that specific nations did not engage with the joint statement”, Moriyasu said.The abstinence of key regional countries like Vietnam, Malaysia, South Korea and India (among many others) underscores the complexities the EU is likely to face in a theatre where legal arguments are not enough.