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Australia's new maritime deal fuelled by fears of regional disorder amid China's rise

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Australia’s landmark maritime treaty with East Timor is expected to make major concessions to the tiny nation to demonstrate Canberra’s commitment to the law of the sea, amid rising concerns over China bucking the rules in pursuit of its own territorial claims.

After 15 years in which successive Australian governments have implacably stuck to their claim over most of the natural gas-rich seas, Australia is understood to be eyeing a more strategic picture in 2018 in which a shared commitment to rules is the best hope of heading off tensions.

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Australia and East Timor strike border accord

Foreign Affairs Minister Julie Bishop and Timor Leste Deputy Prime Minister Agio Pereira sign the maritime border agreement, ending disputes over the maritime boundary between the two countries.

But in a separate complication, the agreement — which is understood to deliver at least 70 per cent of expected gas revenues to East Timor in a virtual reversal from Canberra's earlier positions — could also prompt Indonesia to reconsider its own maritime boundaries with Australia.

China has both publicly and privately used Australia’s protracted dispute over its maritime boundary with East Timor to accuse Canberra of hypocrisy when it raises its concerns over Beijing’s behaviour in the South China Sea.

Foreign Minister Julie Bishop is expected to trumpet the treaty as a show of commitment to the “rules-based order” when she signs it in New York on Wednesday morning Australian time along with Agio Pereira, the East Timorese minister responsible for borders, in the presence of UN Secretary General Antonio Guterres.

The signing comes ahead of Prime Minister Malcolm Turnbull’s hosting of key south-east Asian leaders in Sydney next weekend for an ASEAN special summit.

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Also this week, Admiral Harry Harris, Donald Trump’s pick to be the next US ambassador to Australia, is visiting Canberra.

He met with Defence Minister Marise Payne and top military brass and declared on Twitter that the US and its allies were “committed to maintaining a free and open Indo-Pacific, which has brought security and economic prosperity to all who live in this critical region”.

On the Timor Sea treaty, Australia had long argued it was entitled to 80 per cent of the area — which includes the lucrative Greater Sunrise natural gasfield — because its continental shelf extended that far. It has practically reversed that position, Fairfax Media understands.

The agreed boundary will lie around the mid-point between the two countries’ coasts.

The extent to which the Turnbull government has been prepared to make concessions indicates the degree to which it is eager to promote a rules-based order as a focal point around which to cement relationships in Asia. One implication from last year’s foreign policy white paper was that Australia should deepen its relationships in Asia to weather possible storms arising from US-China rivalry.

The treaty, which largely puts to rest a dispute that has festered since 2002 when East Timor achieved independence from Indonesia, also sets out a legal and financial scheme for Greater Sunrise.

Fairfax Media understands that under the treaty, 70 per cent of the gasfields will be East Timor’s and 30 per cent Australia’s. Royalty revenues will be divided roughly the same way, though East Timor’s share could rise to 80 per cent under certain conditions.

Australia and East Timor have kept Indonesia informed to reassure it that the agreement will not impinge on its own maritime boundaries. Some experts have raised the possibility that Jakarta could demand a revision to its own maritime boundaries with Australia.

By making concessions, Canberra is accepting a more recent interpretation of maritime law, which Jakarta could also say applies to its boundaries. The Indonesian government is understood not to have raised this with Canberra, though it is likely waiting to see the detail of the treaty.

Its foreign ministry said on Tuesday it would issue a statement once details of the treaty had been released. But such a renegotiation of long-held boundaries would be a major undertaking.

The treaty is the result of an international panel that helped run a conciliation, which is not legally binding but which both countries have signalled they mean to follow. It is the first such conciliation in the history of the 1982 UN convention on the sea.

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