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By David Brunnstrom WASHINGTON (Reuters) - The United States and the European Union warned China on Wednesday that it should respect an international court ruling expected later this year on its dispute with the Philippines over territory in the South China Sea. China claims virtually all the South China Sea and rejects the authority of the Permanent Court of Arbitration in the Hague hearing the dispute, even though Beijing has ratified the U.N. Convention on the Law of the Sea on which the case is based. Amy Searight, U.S. deputy assistant secretary of defense for South and Southeast Asia, said the United States, the European Union, and allies like Australia, Japan and South Korea must be ready to make clear that the court's ruling must be binding and that there would be costs to China for not respecting it if it lost the case.More...