Australian Foreign Minister Marise Payne cancels two deals between Victoria & China under new foreign veto laws.

The Morrison government has used its sweeping new foreign veto laws to tear up Victoria’s Belt & Road agreements with China, in what the Chinese Embassy has denounced as a “another unreasonable and provocative move”.

The foreign minister, Marise Payne, said she would cancel those two deals, along with two older agreements between the Victorian government and Iranian and Syrian entities, because they were “inconsistent with Australia’s foreign policy or adverse to our foreign relations”.

But a spokesperson for the Chinese Embassy in Canberra said the move showed the Australian government had “no sincerity in improving China-Australia relations”.

“This is another unreasonable and provocative move taken by the Australian side against China,” the Embassy spokesperson said on Thursday. “It is bound to bring further damage to bilateral relations, and will only end up hurting itself.”

The federal government introduced new laws last year allowing it to review and cancel a range of international agreements struck by state and territories, councils and universities.

While the government was always believed to have Victoria’s Belt & Road agreements in its sights, the decision was only confirmed on Wednesday evening.

The cancellation covers a memorandum of understanding that the Labor premier, Daniel Andrews, signed with China’s national development and reform commission in 2018. That included a pledge to work together on initiatives under Xi Jinping’s signature Belt & Road infrastructure-building program.

The veto also targets the subsequent framework for establishing a working group, at a time when relations between the Australian and Chinese governments have sunk to the lowest levels in decades.

The Victorian agreements have long been viewed warily by the federal government and security agencies.

Prof Rory Medcalf, head of the national security college at the Australian National University, has previously argued the Victorian government’s agreements “undermined the national interest by weakening the commonwealth government’s ability to set the terms for key international relationships”.

Last year Medcalf said accepting the memorandum of understanding without including language on governance, environmental standards or even labour rights “serves mainly as a propaganda gift to Xi Jinping”.

But the Chinese Embassy spokesperson said on Thursday cooperation between China and Victoria under the Belt & Road Initiative was “conducive to deepening economic and trade relations between the two sides” and would “promote economic growth and the well-being of the people of Victoria”.

Andrews has previously defended the agreements on the basis that it was important to secure an increase in infrastructure investment in Victoria.

But Payne said she considered the agreements to fail the test in Australia’s Foreign Relations (State and Territory Arrangements) Act, which passed the parliament late last year, after “review and consideration”.

She said states and territories had now completed their initial audit of existing arrangements with foreign national governments, as required by the legislation.

Payne said she had so far been notified of more than 1,000 arrangements under the new legislation. She thanked the states and territories “for their cooperation and for what is developing as a cooperative approach under the scheme”.

“The more than 1,000 notified so far reflect the richness and breadth of Australia’s international interests and demonstrate the important role played by Australia’s states, territories, universities and local governments in advancing Australia’s interests abroad,” she said in a statement.

“I will continue to consider foreign arrangements notified under the scheme. I expect the overwhelming majority of them to remain unaffected. I look forward to ongoing collaboration with states, territories, universities and local governments in implementing the Foreign Arrangements Scheme.”

The Victorian government did not criticise Payne’s decision when contacted for a response on Wednesday evening.

“The Foreign Relations Act is entirely a matter for the commonwealth government,” a Victorian government spokesperson said. “The Victorian government will continue to work hard to deliver jobs, trade and economic opportunities for our state.”

Apart from the Belt & Road deals, the other two cancelled agreements are:

Memorandum of Understanding between the Department of Education and Training (Victoria) and the Technical and Vocational Training Organisation, Ministry of Labour and Social Affairs, the Islamic Republic of Iran, signed 25 November 2004.

Protocol of Scientific Cooperation between the Ministry of Higher Education in the Syrian Arab Republic and the Ministry of Tertiary Education and Training of Victoria, signed 31 March 1999.

But Payne said she had decided to approve a proposed Memorandum of Understanding between the Western Australian government and Indonesia’s Ministry of Energy and Mineral Resources. That deal focuses on cooperation on human resources development in the energy and resources sector.

Universities have previously labelled the new foreign veto laws as “significant overreach”. They have complained the legislation is so “extraordinarily wide” that it allows the foreign affairs minister to cancel agreements with international counterparts that may go against Australia’s foreign policy, even if that policy isn’t written down anywhere, publicly available or formally decided.

Author: Daniel Hurst Foreign Affairs & Defence Correspondent.