East Timor hailed its move to democracy May 20 by signing the Timor Gap Treaty with Australia just hours after becoming the world's newest independent state. However, the signing of the treaty was more an empty symbol of goodwill than a declaration of cooperation between the two on developing the Timor Sea's vast natural resources.

Negotiations over the sea's boundaries between Australia, Indonesia and East Timor – along with the involvement of a number of international players, such as oil companies and Non-governmental Organizations – will grow much hairier and will not end up being in East Timor's favor.

The Timor Sea, situated between East Timor and Australia's northern coast, contains numerous valuable oil and natural gas fields. East Timor hopes revenue from development in the sea will help put an end to its status as Asia's poorest country. But disputes with Australia regarding maritime borders – and thus claims to profits over the fields – could threaten Dili's aspirations.

The treaty signed this week by Dili and Canberra demarcates the Timor Gap section of the sea into three areas of cooperation – A, B and C.

In areas A and C, East Timor claims 90 percent of the revenue left over after oil companies collect their cut of production profits; Australia gets 10 percent. In Area B, 90 percent of the yield goes to Australia and 10 percent to East Timor. Dili signed the arrangement in order to begin collecting returns as soon as possible.

The arrangement, however, does not address fields that lay outside the Timor Gap, the majority of which Australia now controls. Two of these fields, Greater Sunrise and Laminaria/ Corallina, will generate billions in earnings. A legal seminar, sponsored by Denver-based oil company PetroTimor in Dili March 23, advised East Timor's interim government that it could challenge the current boundaries to assert jurisdiction over a larger area of the Timor Sea.

Two days after the conference, however, Australia decided to renounce all decisions made by the International Court of Justice on the demarcation of the sea's boundaries. Canberra opted instead to engage directly in bilateral negotiations with Dili on maritime border issues.

The 1982 UN Convention on the Law of the Sea calls for maritime boundaries to lie along the midpoint between countries if less than 400 miles of sea separates them. In negotiations with Indonesia, Australia used the continental shelf argument – that a maritime boundary should lie along the deepest point of the ocean floor between the two countries – and gained 85 percent of the sea territory, which it held until East Timor voted for independence in 1999. Australia's negotiating tactics shows its tenacity in trying to keep as much control of the sea as possible.

Dili's new leadership signed the Timor Gap Treaty to start money flowing into the country as soon as possible, delaying the unavoidably contentious debate with Jakarta and Canberra over who will get the most beneficial maritime boundaries. The inevitable negotiations probably will rear their ugly heads before East Timor sees any significant revenue. Even once they do, the current arrangement and Australia's considerable influence likely will keep East Timor from receiving the highest potential profits.