Last week, the Morrison government cancelled Victoria’s two Belt and Road Initiative (BRI) agreements under its new Foreign Arrangements Scheme.

The government revealed it is auditing more than 1000 agreements that state governments, local governments and universities have made with other countries.

Creating a national register of these agreements could be useful, but not if the process chills personal contact between non-federal agencies and their international peers. A confident, outward-looking democracy, such as Australia, should not allow that to happen.

While the Victorian government overreached in its China diplomacy, its two BRI deals and its two education deals with Syria and Iraq – also cancelled under the Foreign Arrangements Scheme – were reportedly never used. This suggests they should be seen as ill-considered public relations initiatives, not major strategic threats.

In the past, the federal government has been more open to infrastructure cooperation with China. Coalition officials continued to discuss the BRI with China after Victoria signed its BRI memorandums in 2018, and a conservative Northern Territory government leased the Port of Darwin to a Chinese company in 2015.

The federal government’s timing suggests there is a political dimension to its recent actions. The Foreign Arrangement Scheme was implemented amid rising tensions in Australia–China relations and political clashes between the federal government and the Victorian Labor government over the management of COVID-19.

The government has celebrated the introduction of the national cabinet system to resolve difficult federal–state issues, and it has backed the business community’s push for a “Team Australia” approach to Asian engagement. These new tools should be used to ensure the Foreign Arrangements Scheme is implemented more productively in the long term.

ASEAN’s Myanmar fix

South-East Asian leaders met last weekend to discuss the Myanmar coup, and they subsequently announced a “five-point consensus”, focused on ending the recent violence, providing humanitarian assistance to the Myanmar people, creating a dialogue between all parties and appointing a special envoy to oversee the process.

The summit, held by the Association of Southeast Asian Nations (ASEAN), achieved more than some sceptics expected – ASEAN is notoriously slow-moving.

Myanmar junta leader Min Aung Hlaing attended in person, but the summit host, Indonesia, pointedly did not recognise him as the head of government, and several leaders spoke bluntly about the need to implement the consensus. The absence of Thai prime minister Prayut Chan-o-cha, purportedly due to COVID-19, was the biggest setback to the group’s show of regional unity.

Myanmar’s shadow national unity government, which includes democracy supporters and ethnic minorities who oppose the junta, initially described ASEAN’s five-point consensus as “welcome news”. But other opponents of the junta criticised the leaders for failing to call for the release of the Myanmar’s political prisoners.

Nevertheless, the summit was an important step towards unwinding the coup and preventing Myanmar’s failure as a state.

By deciding not to impose all of the sanctions on the military regime that were backed by other Western governments, Canberra effectively bet that ASEAN leaders would make some progress.

Its decision to cooperate with ASEAN still looks sound, especially as Canberra’s strategy for dealing with rising superpower rivalry in Asia is based on close relations with South-East Asian countries.

Recognition dilemma

The Morrison government is facing a difficult decision on whether to formally recognise Myanmar’s national unity government.

It is unclear whether the unity government has really bridged the deep divisions between opposition forces in Myanmar, and if Australia recognises its legitimacy it would probably mean splitting with ASEAN on the issue. ASEAN did not permit the national unity government to attend its recent leaders’ summit.

Australia’s position is further complicated by its decision in January 2019 to recognise opposition politician Juan Guaidó as the president of Venezuela.

In doing so, it broke with a thirty-year-old Australian diplomatic policy of only recognising states, not governments. The policy, introduced by the Hawke government, was designed to give Australia more flexibility in dealing with countries when their governments are in doubt.

International law expert Don Rothwell said the Morrison government had offered “no justification” for its change of approach, “yet the implications for Australian foreign policy could be momentous”.

Guaidó is still not in power in Venezuela, due to a stand-off between the national assembly that supports him and the rest of the government, which is controlled by Nicolás Maduro.

However, Guaidó is arguably closer to power than the national unity government is, though the two election victories of its National League for Democracy members suggest the unity government has greater public support.

Australia’s former policy of recognising the state was designed to navigate this sort of complexity. The government now faces a more important decision than the little-remembered one it made on Guaidó two years ago.