Subject: Statement by Rep. Dennis Kucinich during FTA debate

These are extended remarks entered into the record from last week's debate in the U.S. House of Representatives during the debate on the U.S.-Australia Free Trade Agreement]

Statement of Rep. Dennis J. Kucinich

U.S. House of Representatives

In Opposition to H.R. 4759, the United States-Australia Free Trade Agreement

July 14, 2004

Mr. Speaker, I rise today in opposition to H.R. 4759, the United States-Australia Free Trade Agreement, and I wish to draw members' attention to Australia's unauthorized oil drilling for resources in the Timor Sea, at the expense of the world's poorest and newest nation, East Timor.

East Timor gained independence in 1999, and since then, has received a great amount of aid from the international community. Australia has been one of the more generous nations. East Timor is still one of the most impoverished nations in Asia however, and despite its modest government budget, it will accrue an estimated deficit of US$126.3 by 2007. This deficit cannot be good for East Timor.

Close off the coast of East Timor lies many rich oil and gas fields. But East Timor does not stand to profit. Instead, Australia claims sovereignty over the fields and is only half-heartedly negotiating with East Timor to arrive at an equitable sharing of the oil. In 2007, East Timor is expected to start collecting a small amount of revenue from just some of rich oil and natural gas resources that exist in the Timor Sea, just off the coast of East Timor. East Timor's rightful claim is protected by international law, the 1982 UN Convention of the Law of the Sea, which specifically says that the maritime boundary between two countries exists halfway between the countries. Despite this law, Australia has laid claim to the resources, citing an illegitimate treaty with Indonesia from 1972 that delimited Australia's maritime boundary as the continental shelf line, which exists much closer to East Timor than Australia. At the time the treaty was signed, East Timor was occupied by Indonesia. East Timor gained independence in 1999 thereby invalidating the treaty between Indonesia and Australia.

Between 1999 and 2002, Australia made $638 million from the Laminaria-Corallina oil fields, even though these fields are twice as close to East Timor than Australia. By 2007, Australia is expected to make $1.266 billion from these fields.

The Laminaria-Corallina oil fields are just some of the many rich resources that exist in the Timor Sea. The Greater Sunrise fields, located 150 km south of East Timor, and 400 km north of Australia, although not yet tapped, are expected to bring in over $30 billion. Certainly East Timor's economic future could improve considerably with these resources included in its territory.

Australia has proposed a Joint Petroleum Development Area, an area covering 40% of the energy fields in the Timor Sea, and specifically the Bayu-Undan field. In this Area, East Timor would receive 90% of the oil production, estimated by the Australian government to be valued at $300 million. The success of this production, however, is yet to be determined, as the resources will not bring in revenue until 2007. But as for the much richer Greater Sunrise field, expected to yield $30 billion, Australia claims the right to over 80%.

Australia claims to be negotiating with East Timor about their much-needed maritime boundary in "good faith." Yet it took over of year of pleading by the East Timorese government in order for the Australian government to finally concede to the negotiation process, and they only conceded to meet twice per year. East Timor has requested that the maritime boundary be determined within 3-5 years, a reasonable amount of time for settling this type of dispute, yet Australia has refused, claiming this dispute is much too complicated for a time limit to be set. In the meantime, Australia only benefits from time passing, as it continues to drill in the Laminaria-Corallina oil fields and has taken initial steps to guarantee drilling in the Greater Sunrise fields. It has been suggested to the Australian government that revenue from the resources extracted in the disputed area be held in escrow until the maritime border is determined between East Timor and Australia. Once again, the Australian government has refused, displaying "bad faith" in the negotiating process.

Australia is a strong and wealthy country, certainly the stronghold of the region. East Timor has very little, and any leverage it may have in negotiating with Australia over its rightful claim to the resources in the Timor Sea lies completely in its moral claim. I urge my colleagues to support the efforts of the world's newest independent state.


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