Australia ‘unlikely’ to move Israel embassy after talks with Indonesia

In a bid to seal a $16.5bn trade deal with Indonesia, one of Scott Morrison’s ministers has privately revealed the Israel embassy shift has a ‘less than 5 per cent’ chance of going ahead.

Scott Morrison has refused to be drawn on whether a proposal to shift Australia’s embassy in Israel to Jerusaelm has a “less than 5 per cent” chance of going ahead.

The Prime Minister was asked about the remark today after Fairfax Media reported a Morrison Government minister had quietly reassured Indonesian Trade Minister Enggartiasto Lukita that the proposal - which has become the sticking point holding up a $16.5 billion free trade agreement between the two countries - had a slim chance of going ahead.

Asked today what the chances were the embassy would be moved from Tel Aviv to Jerusalem, Mr Morrison told reporters in Singapore: “All I have said is that we will consider the matter.”

The Prime Minister has copped a backlash over the idea from Indonesia, Palestine and other predominantly Muslim countries, as well as the federal Opposition, since he floated the idea the week before last month’s crucial Wentworth by-election.

Australia's Prime Minister Scott Morrison and Indonesia's President Joko Widodo at the ASEAN Summit in Singapore on Wednesday. Picture: AAP

Mr Morrison shot down Labor leader Bill Shorten’s demand that he rule out the embassy move before Christmas, saying there was a process in place already to determine if it was in the national interest.

“This matter is not going be considered in the context of the issues in relation to the trade agreement,” Mr Morrison said today.

He added: “Australia has to be sovereign in determining its foreign policy.”

“We can’t have it determined or our agenda set by any other nation. That’s just a matter of treating yourself with respect.”

Fairfax Media reports Defence Industry Minister Steve Ciobo, who was trade minister before Mr Morrison became Prime Minister, had reassured Mr Lukita the embassy move was unlikely to go ahead on the sidelines of a recent defence event in Indonesia.

Fairfax Media reported that Mr Lukita said to Mr Ciobo: “Don’t ask when it will be signed.”

Mr Ciobo is said to have replied: “Enggar, I know.”

A spokeswoman for Mr Ciobo has denied he also told the Indonesian Trade Minister: “About the possibility, I cannot say 100 per cent we will move, but, I guess, the possibility is less than 5 per cent.”

The private exchange has been leaked a day after Mr Lukita publicly confirmed the Israel embassy proposal was the sticking point preventing Indonesia from signing a landmark free trade agreement with Australia.

PM MADE AUSTRALIA ‘LOOK STUPID’: SHORTEN

Labor leader Bill Shorten was scathing of the prime minister’s embassy proposal today, saying it was a mistake.

“Frankly he made himself look stupid and made our country look stupid,” he told reporters in regional Victoria.

Mr Shorten also called on Mr Morrison to make a call on the plan now.

“I don’t see why this nation has to wait until Christmas so Mr Morrison can climb off his high horse,” he said.

“Let’s just get on with it. No shame in admitting you’re wrong, and let’s just let get onto the next issue, including improving our trade opportunities in our region.”

Labor’s foreign affairs spokewoman Penny Wong also slammed the Prime Minister’s “poor judgment” on the embassy announcement, saying it undermined Australia’s consistency and credibility with other nations.

Asked about the Prime Minister’s claim that the embassy proposal and the trade deal stalling were unrelated, Senator Wong told ABC radio this morning: “I don’t think anybody believes him, including his own side.”

“The Indonesian trade minister has made very clear that the delay in finalising this agreement or signing it is because of the government’s position on Palestine,” she said.

“The reality is, we’ve got a prime minister who has demonstrated his poor judgment.

“He’s been willing to trash long-standing bipartisan policy in a desperate attempt to get votes. “He did so against advice, without the cabinet approving it, without the minister knowing until the day before and of course the defence force who only knew after the media.

“The cost of all this chaos to Australia’s national interest is now being demonstrated.”

Senator Wong called on the government to rule out moving the embassy now, rather than leave the decision until Christmas.

“No country should dictate Australia’s foreign policy. Australia’s foreign policy should be determined by looking carefully and responsibly at Australia’s national interest and that has not occurred here,” she said.

Scott Morrison has raised the possibility of moving Australia’s embassy in Israel from Tel Aviv to Jerusalem. Picture: AAP

Others within the government have insisted that the statements hold little gravitas and that Mr Morrison will ignore protests from Jakarta and move the embassy if it’s in Australia’s national interest.

The dispute over Mr Morrison’s decision has exporters worried as talks delay a new trade deal with Indonesia, whose business with Australia is worth $16.5 billion a year.

The dispute over the decision is delaying a new trade deal with Indonesia, worth $16.5 billion. Picture: AAP

Indonesian president Joko Widodo reiterated the argument against the embassy move during talks with Mr Morrison in Singapore on Wednesday.

Mr Morrison left the meeting insisting that the embassy move and the trade deal had not been discussed at the same time in his conversation with Mr Joko.

The Indonesian government later issued a statement emphasising a two-state solution between Israel and Palestine.

Indonesian Foreign Minister Retno Marsudi (R) enforced that the signing of the deal will be delayed if Australia moves the embassy. Picture: AAP

Mr Lukita said on Tuesday that the timing of finalising the agreement was now linked to the decision on Israel.

“It can be signed anytime, but when you will sign it … depends on Australia’s position” he told reporters at the East Asia Summit in Singapore.

Indonesian Foreign Minister Retno Marsudi enforced that “if Australia insists on moving its embassy to Jerusalem, the signing will be delayed,” Mr Lukita reportedly added.

Mr Morrison said yesterday he hoped to have the review on the policy finished by Christmas.

Originally published as Australia ‘unlikely’ to move Israel embassy after talks with Indonesia