Australia May Follow Trump in Moving Its Embassy in Israel

(Bloomberg) -- Australia is considering following U.S. President Donald Trump’s lead in moving the nation’s embassy in Israel to Jerusalem.

“Australia should be open-minded to this,” Prime Minister Scott Morrison told reporters in Canberra on Tuesday. “We’re committed to a two-state solution but, frankly, it hasn’t been going that well.”

The announcement is causing concern in Indonesia -- home to the world’s largest Muslim population and Australia’s northern neighbor -- although not enough to threaten the countries’ imminent free-trade deal.

“Indonesia conveys our strong concern on the announcement and question the merit of the announcement,” Indonesian Foreign Minister Retno Marsudi said, referring to the potential embassy move.

However Indonesian government has not made any representations to Australia about the free trade agreement or whether it was in jeopardy, Foreign Ministry spokesman Arrmanatha Nasir said. The comments were made immediately following a meeting between Marsudi and her Palestine counterpart, Riad al-Maliki.

World leaders from the Vatican to Tehran denounced Trump’s decision to relocate the U.S. embassy from Tel Aviv. The contentious inauguration in May, timed to coincide with the 70th anniversary of Israel’s independence, escalated clashes between Israeli troops and Palestinians in the Gaza Strip.

Morrison said he would ask his Cabinet to consider recognizing Jerusalem as the capital of Israel and the embassy switch -- a potential move welcomed by Israeli Prime Minister Benjamin Netanyahu.

“I’m very thankful to him for this,” Netanyahu said in a tweet after speaking with Morrison. “We will continue to strengthen ties."

Australia will also review its support for the Iran nuclear agreement due to “potentially destabilizing behavior in the Middle East when it comes to the activities of Iran,” Morrison said on Tuesday.

Asked in parliament about media reports the potential embassy move could damage Indonesian-Australian relations, Morrison said he had explained his announcement to President Joko Widodo and had been “very pleased with the response.”

In August, Indonesia and Australia concluded talks begun in 2010 on a free-trade deal that’s due to be signed next month. In 2017, two-way trade of goods between the nations was A$11.2 billion ($8 billion), making Indonesia Australia’s 14th-largest trading partner.

Morrison said he was persuaded to consider reversing the government’s long-held position to keep the nation’s embassy in Tel Aviv by Dave Sharma, a former Australian ambassador to Israel and the governing Liberal Party’s candidate in a special election this weekend in the Sydney-based district of Wentworth. The electorate has a relatively high Jewish population.

Should it fail to win the seat, Morrison’s government will lose its one-seat majority in the lower house, meaning it will be forced to rely on the support of minor parties to survive and pass legislation.

The main opposition Labor party, which polls show is on track to win national elections that must be held by May, said Tuesday’s announcement showed just how desperate the government is to win in Wentworth.

“Both the government and the opposition have supported the approach of most other nations of maintaining our embassy in Tel Aviv on the grounds that Jerusalem’s status must be determined as part of an overall two-state solution,” Labor foreign affairs spokeswoman Penny Wong said in a statement. “The people of Wentworth, and all Australians, deserve a leader who puts the national interest ahead of his self-interest.”

Morrison, an evangelical Christian, denied the potential embassy switch was motivated by domestic politics, his religious beliefs, or that Australia’s main strategic ally, the U.S., had influenced the decision.

Relations between Australia and Indonesia have been damaged by a series of scandals and spats over the decades but improved under Morrison’s predecessor Malcolm Turnbull, who lost his job in a leadership coup in August.

“Morrison’s embassy announcement seems reckless and has the potential to be received poorly in nations such Indonesia and Malaysia,” said Greg Barton, chair in global Islamic politics at Melbourne’s Deakin University. “It may not end up a big deal but it does seem unnecessary and it may not even help the government win its election in Wentworth.”

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