France tries to delay EU-Australia trade deal amid Aukus fallout

France seeks EU support to delay deal as punishment after Australia cancelled £48bn submarine contract

France is seeking to enlist European Union support to delay a planned EU-Australia trade deal, as part of a plan to punish Australia for what it regards as serial deceit and subterfuge by Canberra before it cancelled the contract for 12 attack-class French submarines.

The A$90bn (£48bn) submarine contract was the centrepiece of French-Australian cooperation in the Indo-Pacific, but the Australians have instead opted to form a US-UK-Australia pact dubbed Aukus, and build eight nuclear-powered submarines likely to be delivered between 2030 and 2040.

The EU Commission president, Ursula von der Leyen, weighed into the diplomatic row on Monday, saying France had been treated unacceptably by the US, Australia and the UK and that many questions remained unanswered. EU foreign ministers were due to discuss the crisis on the sidelines of the UN general assembly in New York.

The next round of EU-Australia trade talks – the 12th – are due next month, and it remains to be seen how deeply other EU states wish to become embroiled in the fallout from the French loss of a commercial contract.

The Australian trade minister, Dan Tehan, denied that the security row would spill into the planned free trade deal with Australia’s third largest trading partner. “It’s just very much business as usual when it comes to our negotiations on that free trade agreement,” he said. “Everything points to the fact that it’s in both the European Union and Australia’s interests that we continue that FTA.”

France has recalled its ambassadors to Washington and Canberra in an unprecedented protest and its armed forces minister, Florence Parly, currently in Mali, has postponed a planned meeting this week with the British defence secretary, Ben Wallace. A planned phone call between the US president, Joe Biden, and the French president, Emmanuel Macron, requested by Biden has not yet been put into diaries.

In New York, the French foreign minister, Jean-Yves Le Drian, said he had no plans to meet his US counterpart, Anthony Blinken, at the UN general assembly this week, unless they bumped into one another “in a corridor”.

It was now up to Europe to define its own Indo-Pacific strategy as an alternative to the US-driven approach, which he warned was leading to confrontation with China.

“The Europeans have their own fundamental interest,” Le Drian said. “These may not be in contradiction with those of the United States but we need to talk about it, and the Europeans fundamentally need to be taken into account by the United States … so the Europeans shall not be left behind in a strategy chosen by the United States.”

Macron, facing re-election next year, was remaining silent about the commercial and diplomatic humiliation inflicted on his country, which has effectively left the French strategy for the Indo-Pacific, based on cooperation with Australia and India, in tatters.

But lawyers acting for the French government and the state-backed Naval Group are already preparing a massive compensation claim that will turn on the flexibility and break clauses written into the contract first signed in 2016.

Other French options include selling nuclear-powered submarines to India, or persuading the US, Australia and the UK to let them join the Aukus security pact, and even play a role in building the submarines.

Boris Johnson insisted that the pact, due to extend beyond submarine manufacture to AI and robotics, was not intended to be exclusionary. “The UK and France have a very, very important, indestructible relationship, and of course we will be talking to all our friends about how to make the Aukus pact work so that it is not exclusionary, not divisive, and it really does not have to be that way,” he said.

He claimed the pact was just a sensible way to share certain technologies. “But that does not mean in any way mean that we wish to be adversarial to anyone else.”

Ben Wallace, speaking in the Commons, also sought to soothe the French, saying: “There is no absolutely no intent here by the UK government to slight, upset or drive a wedge between us and France. There was no sneakiness behind the back. It was fundamentally Australia’s right to choose a different capability, and it did.”

But the French say no mention of the planned cancellation of the contract was made by the British when Wallace and the then foreign secretary, Dominic Raab, met their French counterparts in Paris to discuss their “separate responsibilities” in the Indo-Pacific.

The value of Johnson’s soothing words may be reduced in French eyes by Johnson choosing to celebrate the new pact with Australia by dining on Tuesday night at the Australian ambassador’s residence in Washington.

The French insist that despite direct inquiries from Australian ministers, they were never given any private warning that the contract was so close to being torn up. Australia says it was a matter of public record, including in Australian parliamentary hearings, that the government was considering a plan B due to inadequacies in the French-designed submarine, including range.

France believes that the US, especially Kurt Campbell, the White House coordinator for the Indo-Pacific, actively encouraged Australia to drop the French contract by making the unprecedented offer to share its nuclear-powered technology. The US feels vindicated by the support for the move among its allies in the region.

The pact, or at least the humiliation of France, has not been met with universal acclaim in the Conservative party. The Tory chair of the defence select committee, Tobias Ellwood, said the French had overreacted, but he added the “timing and manner of this announcement is not without diplomatic consequence and prompts further questions about the cohesion, purpose and leadership of Nato after a bruised departure from Afghanistan”.

He warned: “China’s authoritarian behaviour cannot be defeated solely by military means. We need all the tools and all the alliances working towards a common strategic goal.”


Patrick Wintour Diplomatic editor

The GuardianTramp

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