ECONOMY

Australia and France intensify war of words over cancelled submarine deal

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Australia’s prime minister Scott Morrison defended his decision to renege on a submarine deal with the French government as acrimony intensified over Canberra’s decision to sign a new security pact with the US and UK.

Morrison said he did “not regret the decision to put Australia’s national interest first” in comments that came just hours after France, which is fuming over being left out of the pact, derided the UK’s role.

Jean-Yves Le Drian, France’s foreign minister, said Paris had recalled its ambassadors from Washington and Canberra on Friday but deemed it unnecessary to do the same in London because “we know about [the UK’s] permanent opportunism.”

“Great Britain is in this case a bit like the fifth wheel on the coach,” Le Drian said on France 2.

In a sign that Washington is keen to de-escalate the worsening crisis, it emerged on Sunday that US President Joe Biden has asked for a call with President Emmanuel Macron of France to discuss the submarine deal. 

Australia said on Wednesday that it had cancelled a A$50bn Franco-Australian deal for 12 conventional submarines that had been five years in the making and would instead develop at least eight nuclear-powered submarines with the US and UK in a trilateral deal that excluded France.

The so-called Aukus pact — which is designed to confront growing Chinese power in the Indo-Pacific — prompted fury in Paris, where a French diplomat said France was only informed of it on Wednesday morning despite attempts to glean information from US officials in previous days.

Morrison denied that he had been dishonest with the French government in the run-up to the signing of the so-called Aukus deal, saying that he had raised concerns about the France-Australian submarine programme “some months ago”.

“They would have had every reason to know that we have deep and grave concerns that the capability being delivered by the Attack-class submarine was not going to meet our strategic interests,” he said at a press conference on Sunday. “We had made very clear that we would be making a decision based on our strategic national interest.”

Le Drian said: “There has been a lie, there has been duplicity, there has been a major breach of trust, there has been contempt, so it’s not OK between us, it’s not OK at all. That means that there is a crisis.”

Clement Beaune, France’s Europe minister, said: “I do not see how we can trust our Australian partner . . . The word, the signing of a contract is worth something. If we no longer have confidence, we can no longer move forward.”

On Boris Johnson’s post-Brexit “Global Britain” ambitions, Beaune told a state television station: “As you can see, it is a return to the American fold and accepting a form of vassal status.”

Liz Truss, Britain’s new foreign secretary, wrote in the Sunday Telegraph that the Aukus pact showed Britain’s willingness “to be hard-headed in defending our interests and challenging unfair practices and malign acts”.

The article did not mention either France or China, but Johnson’s foreign policy is about to be tested as he prepares to meet US president Joe Biden at the White House next week.

British officials insist the Aukus pact was driven by security issues and that the UK was “fundamental” to the whole plan, but it was not intended as a snub to Paris. “We didn’t want to annoy the French,” said one.

Tensions with Macron are already running high after Brexit — particularly over the Northern Ireland protocol — and UK officials are braced for more “turbulence up to and beyond” next year’s presidential elections.

The ratcheting up of tensions with China could also complicate Johnson’s attempts to persuade Chinese president Xi Jinping to back ambitious plans to tackle climate change at November’s UN COP26 summit in Glasgow.

Alok Sharma, the British president of the summit, admitted on Sunday that it was “not yet confirmed” that President Xi would attend. Xi has not travelled outside his country since January 2020. But Sharma told the BBC: “I certainly expect China will send a negotiating team to Glasgow.”

From as far back as June, French officials said they had asked their Australian counterparts multiple times whether they wanted to change the contract from conventional to nuclear-powered submarines, which France also makes, but these questions were met with silence.

A French diplomat conceded that at a meeting on June 24, Australian officials did ask whether the Attack-class submarines being developed were still adapted to “an evolving and worsening threat environment”. 

However, he stressed that there was no mention of a “request to move from conventional to nuclear powered [submarines] and the question was never mentioned to move from a bilat[eral] discussion with us to a trilat[eral] with the US and UK.” 

Australian defence minister Peter Dutton has previously said that it was motivated to take the submarine deal in a different direction, with new partners, because the “French have a version which was not superior to that operated by the United States [and] the United Kingdom”. 

There had also been concern brewing for some time over cost rises and delays to the Franco-Australian programme.

French officials and corporate executives have pushed back strongly against the view that operational problems underpinned Australia’s decision, saying that these had been resolved early in the year.

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