US Weighs in on Australia’s BRI Controversy Amid State and Federal Divide

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US Weighs in on Australia’s BRI Controversy Amid State and Federal Divide

U.S. Secretary of State Pompeo inserted himself into an ongoing dispute between the Australian federal government and the state of Victoria over China’s BRI.

US Weighs in on Australia’s BRI Controversy Amid State and Federal Divide
Credit: State Department Photo by Ron Przysucha/ Public Domain

The Australian federal government in Canberra and the state government of Victoria have long been bitterly divided over the state’s inclusion in China’s Belt and Road Initiative (BRI). Over the weekend, U.S. Secretary of State Mike Pompeo added to the rift. 

Speaking to Sky News on Sunday morning, Pompeo said that while he’s not aware of the specifics of Victoria’s engagement with Beijing, it could impact his nation’s Five Eyes intelligence-sharing partnership with Australia.

“We will not take any risk to our telecommunications infrastructure or any risk to the national security elements of what we need to do with our Five Eyes partners,” he said. 

“To the extent they have an adverse impact on our ability to protect telecommunications from our private citizens, or security networks for our defense and intelligence communities – we simply disconnect, we will simply separate.”

China’s BRI, a trillion-dollar 21st century Silk Road that includes new ports, highways, railways, and other infrastructure projects, has already taken hold in more than 70 countries around the world. It is the most ambitious infrastructure project in modern history, with the simple aim of rerouting global trade to and from China. 

Daniel Andrews, the premier of Victoria, said after signing a memorandum of understanding with China on BRI initiatives in 2018 that the agreement would give Victorian infrastructure experts access to the hundreds of billions of dollars of projects slated for the BRI.

“With the biggest infrastructure program in our state’s history under way, we have the design and delivery skills China is looking for, meaning more jobs and more trade and investment for Victorians,” he said.

“In four years, we have more than tripled Victoria’s share of Chinese investment in Australia and nearly doubled our exports to China. We said we’d reboot our relationship with China and we’re getting it done.”

Victoria’s deal with Beijing is a non-legally binding agreement for the state to be involved in the BRI and for the two parties to work together on future projects. 

Although Victoria is not bound by the agreement, Canberra has argued that the state government crossed a line by meddling in foreign affairs, lacks national security perspective, and is overall too cozy with China – putting it at odds with Canberra’s cautious approach to Chinese investment in the region.  

Tension between Beijing and Canberra has mounted ever since Australia called for an independent inquiry into China’s handling of the coronavirus. Beijing went on to ban beef imports from four Australian abattoirs and hit Australia’s barley producers with an 80 percent tariff.

Producers in Victoria have escaped China’s tariffs relatively unscathed, though, and the four abattoirs that China banned imports from are based in the states of New South Wales and Queensland.

Following Pompeo’s remarks, the U.S. ambassador to Australia, Arthur Culvahouse Jr., released a statement saying he wanted to “set the record straight.”

“The United States has absolute confidence in the Australian Government’s ability to protect the security of its telecommunications networks and those of its Five Eyes partners,” he said. 

“We are not aware that Victoria has engaged in any concrete projects under BRI, let alone projects impinging on telecommunications networks, which we understand are a federal matter. If there were telecommunications initiatives that we thought put the integrity of our networks at risk, of course we would have to take a close look at that, as the Secretary suggested.” 

While Culvahouse attempted to walk back Pompeo’s comments, the federal government in Australia had already begun to use them as cannon fodder in their criticism of Victoria.  

Prime Minister Scott Morrison said Victoria was stepping into federal government policy territory and that they didn’t support the decision at the time that the agreement was made.

“National interest issues on foreign affairs are determined by the federal government,” he said. “It’s always been the usual practice for states to respect and recognize the role of the federal government in setting foreign policy.”

Home Affairs Minister Peter Dutton has described the BRI as “a propaganda initiative from China” that bring an “enormous amount of foreign interference.”

Others have accused Victoria of undermining the federal government in its efforts to seek clarity on China’s handling of the coronavirus and the on-going relationship between the two countries amid the diplomatic spat that ensued. 

On Monday, The Age newspaper in Melbourne reported that the Victorian government used the BRI agreement with China as an electoral weapon to help the Andrews government win votes in three seats with a high number of Chinese-Australians in the 2018 election. 

While Victoria is under the spotlight, few have taken on the task of reminding Australians that the federal government has itself made a joint infrastructure deal with China – albeit behind closed doors. 

The then-Australian prime minister, Malcom Turnbull, told reporters in 2017 that “an agenda is probably the best way to describe [the BRI].”

But Turnbull’s trade minister, Steven Ciobo, signed a memorandum of understanding in September of that year for cooperation on building infrastructure such as roads, bridges, and dams in third countries. 

The Department of Foreign Affairs and Trade has refused to release the details of the agreement under the Freedom of Information Act, claiming that both parties to the agreement are required to release the text of the MOU, but since China has not done so, Australia is bound under the element of confidentiality.