The government is set to lock down new powers to review and scrap deals with other nations – with China as the primary target

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  • The federal government is about to secure new powers to review agreements struck with foreign governments and cancel any that aren’t deemed in the national interest.
  • Prime Minister Scott Morrison revealed that there were 130 current agreements under review between state and local governments as well as universities.
  • With 48 of them tied to China, it could threaten Victoria’s part in the Chinese government’s ‘Belt and Road Initiative’ as well as the operation of Confucius Institutes at Australian universities.
  • Visit Business Insider Australia’s homepage for more stories.

The federal government is looking to grant itself new powers to be able to review and scuttle deals made with foreign powers.

Prime Minister Scott Morrison announced the new legislation was aimed at pulling all government bodies into line and presenting a united front to the outside world, and especially China.

“Arrangements that adversely affect Australia’s foreign relations or are inconsistent with our foreign policy could be prevented from proceeding or terminated,” Morrison said on Thursday.

Specifically, the legislation is aimed at reviewing and potentially “cancelling” any deals struck by or under consideration of state and local governments as well as universities.

Previously, those bodies have been able to make their own deals “from trade and economic cooperation to cultural collaboration and university research partnerships – without having to inform the Commonwealth”.

In that way, it will only affect agreements made between governments or government arms, and not between corporations. Those arrangements will still be reviewed by the Foreign Investment Review Board (FIRB).

With Labor indicating it supports the legislation in principle, those powers appear to be set to pass Parliament without too many changes.

Morrison revealed there are 130 deals with 30 different countries under scrutiny.

While Morrison tiptoed around the suggestion that these powers were largely about dealing with one nation specifically, it’s clear China stands to be the most affected by the new rules.

It is responsible for 48 of the deals under review. Japan, another major trading partner, has the second most with 16.

One of the largest agreements under review will be China’s global infrastructure strategy, known as the ‘Belt and Road Initiative’ (BRI). The Victorian government has signed both a memorandum of understanding as well as a framework agreement to be part of the BRI, without federal government consultation.

“It’s never been our government’s policy, under either myself or the previous Prime Minister, that we signed up to or endorsed the BRI,” Morrison said on Thursday.

Victorian Premier Daniel Andrews appeared less than pleased at the suggestion the BRI deal could be scuttled, suggesting it would hamper Victoria’s economic recovery.

“Given announcements the Prime Minister’s made today, he’ll no doubt very soon be able to list the full range of other free trade agreements and other markets that we’ll be sending Victorian products to. I look forward to that,” he said on Thursday.

So too may the review threaten the relationship between Australian universities and China’s controversial Confucius Institutes. Critics argue the institutes allow the Chinese Communist Party (CCP) to exert influence over Chinese language and culture education taught locally. Six such agreements are to be examined.

“Where any foreign government seeks to undermine the sovereignty of Australia’s foreign policy by seeking to do deals with subnational governments, Australia needs to protect itself from that,” Morrison said.

Not all deals under review are so controversial, however. Some include research agreements between universities and state governments as well as so-called ‘friendship agreements’ between cities to promote trade.

While those presumably will live to see another day, Australia’s relationship with other countries looks a tad more adversarial.

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