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Australian Government Tears up Victoria’s Belt and Road Agreement with China

Tim Callanan wrote . . . . . . . . .

The Commonwealth has used its powers to tear up Victoria’s Belt and Road Initiative (BRI) agreements with China, along with two other, much older agreements with Iran and Syria.

The scrapping of Victoria’s BRI arrangement came before the agreements were even fully formed, and certainly before they delivered any real benefits for either party.

The Chinese Embassy described the decision as “unreasonable and provocative”, but Australia’s Foreign Minister Marise Paine said the arrangements were inconsistent with Australia’s foreign policy.

What is the Belt and Road Initiative?

China’s BRI began life in 2013 as the One Belt One Road initiative, with the goal of building a vast network of trade routes across the globe.

In early 2017, China hosted 28 world leaders, as well as representatives from another 70 countries, to a two-day summit in Beijing to spruik the initiative.

Among the delegates was Victorian Premier Daniel Andrews.

China has been involved with hundreds of projects under the BRI, ranging from hydroelectricity projects in Uganda to rail links in Malaysia.

Victoria signed a Memorandum of Understanding (MOU) with China in October 2018 to be part of the BRI which, by that stage, already involved more than 100 countries and international organisations.

What was in Victoria’s Belt and Road deal?

The initial MOU in 2018 was short on detail, but promised trade, financial and policy cooperation.

The framework was laid out in more detail in October 2019, with a working group formed to be co-chaired by Daniel Andrews and China’s National Development and Reform Commission Vice Chairman Ning Jizhe.

Infrastructure was a key part of the agreement, which promised to “increase the participation of Chinese infrastructure companies in Victoria’s infrastructure construction program.”

That involved encouraging Chinese infrastructure firms to establish a presence in Victoria and bid for major projects.

Victoria agreed to send regular delegations of Victorian Infrastructure firms to China to “better understand opportunities”.

The agreement also raised other potential areas of cooperation, including manufacturing, biotechnology, and agriculture.

There was also an agreement to develop trade and market access “especially for agricultural products, food, nutraceuticals and cosmetics”.

None of the agreements under the BRI are legally binding.

What stage was the agreement at?

Victoria and China were yet to agree on a ‘Cooperation Road Map’ which would have further fleshed out the BRI deal.

This was supposed to have been signed by March 2020, but the COVID pandemic led to delays in finalising the plan.

Daniel Andrews last year defended the agreement, saying it was important for Victorian jobs.

The Victorian Premier came under more pressure to cancel the deal, amid escalating tensions between China in 2020.

Mr Andrews condemned an inflammatory tweet by a Chinese government delegate in the wake of a landmark war crimes inquiry, but refused to back out of the BRI arrangement.

“This relationship is far too important to farmers, to manufacturers, to workers, to profits for Victorian companies and therefore prosperity for our state,” he said.

How can the federal government cancel a state deal?

The deals were quashed under the federal government’s Foreign Arrangements Scheme, which came into force in December, 2020.

The scheme gives the Commonwealth the power to veto deals between states and territories and foreign entities which “are not consistent with Australia’s foreign policy.”

Foreign Minister Marise Paine said the move was not intended to target China.

“It’s about ensuring that we have a consistent approach to foreign policy across all levels of government, and it isn’t about any one country, most certainly not intended to harm Australia’s relationship with any countries,” she said.

There have been concerns about China potentially using the BRI to gain power and influence across the world, in what’s been dubbed “debt-trap diplomacy.”

The most striking example of this was in Sri Lanka, where China took control of the country’s second-largest port on a 99-year lease after the country failed to pay off a $1 billion debt linked to its BRI agreement.

What exactly were the deals that were cancelled?

The federal government cancelled four arrangements, of which two were related to Victoria’s BRI agreement with China.

They include:

  • The Memorandum of Understanding between Victoria and China which was signed on October 8, 2018.
  • The Framework Agreement between Victoria and China signed on October 23, 2019.

The two other agreements that were cancelled relate to the Kennett and Bracks governments, and include:

  • A Memorandum of Understanding between the Victorian Education Department and Iran’s Ministry of Labour and Social Affairs, signed on November 25, 2004.
  • A Protocol of Scientific Cooperation between Victoria’s Ministry of Tertiary Education and Training and Syria’s Ministry of Higher Education, signed on March 31, 1999.

Source : ABC News

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