Australia’s treatment of France ‘unacceptable’, EU says

France has been treated unacceptably by Australia and the European Union will need answers before relations can normalise, European Commission president Ursula von der Leyen has said, as a submarine contract row threatens to halt a trade deal with Canberra.

Paris reacted with fury after Australia dumped a deal worth more than €50 billion to sign a new defence co-operation agreement with the United States and Britain that would secure it nuclear-powered submarines, as it seeks allies to push back against growing Chinese might in the Indo-Pacific region.

“There are a lot of open questions that have to be answered. One of our member states has been treated in a way that is not acceptable, so we want to know what happened and why,” Dr von der Leyen told an interview with CNN. “Therefore, you first of all clarify that, before you keep on going with business as usual.”

The intervention follows pressure by France for backup in the row, and echoes a suggestion by French Europe minister Clément Beaune, that Paris could block further progress on an EU-Australia trade deal.

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“Keeping one’s word is the condition of trust between democracies and between allies,” Mr Beaune told Politico. “So it is unthinkable to move forward on trade negotiations as if nothing had happened with a country in which we no longer trust.”

Trade deals require the unanimous support of the 27 member states to be adopted. The 12th negotiating round on the plan to ease trade barriers had been expected to take place next month, and Australia had initially hoped to conclude a deal by the end of this year.

Offence

The rift, which saw Paris recall its ambassadors to Australia and the US in an extraordinary signal of offence, is dominating diplomatic discussions as the United Nations General Assembly gets under way in New York.

It is set to be the predominant topic of discussion as EU member states meet for discussions on the sidelines of the conference.

France has asked other EU member states to open talks on the future of the transatlantic relationship and on the union's common defence strategy in light of the development, ahead of a European summit on defence due to be convened by President Emmanuel Macron, when France assumes the rotating presidency of the EU next year.

Paris has long pushed for the EU to forge its own path independently of Nato, and has cast the events as confirmation that Europe cannot rely on its partnership with the US to secure its strategic interests, despite overtures of friendship from the new administration of President Joe Biden following the difficult Trump years.

Yet it is far from clear that other EU member states are unanimous in support for Paris. Germany’s defence ministry announced the signing of a new letter of intent on a military space partnership with Australia in Berlin on Monday, and Eastern European member states have long-held reservations about France’s championing of European self-reliance, seeing it as a potential challenge to the alliance with the US.

Defence co-operation

Apart from its anger at the cancellation of the submarine deal, France was outraged by a lack of consultation ahead of the move, which it views as cutting it out of defence co-operation in a region in which it is heavily invested.

Officials have also expressed umbrage at the lack of warning from Canberra, which reaffirmed the “importance” of the deal in a statement in August. France’s ambassador to Australia, Jean-Pierre Thébault, described the move as “treason” and a “crime” that had seen France “blindsided intentionally for 18 months”.

Australian prime minister Scott Morrison has pushed back against the accusations, however, referring to long-held doubts about a deal marred by delays and cost overruns, and said he would never regret "the decision to put Australia's national interest first".