Trade negotiations between the European Union and Australia have been postponed in the wake of Canberra’s decision to ditch a multi-billion-euro deal for nuclear-powered subs it had with France in favor of one with the US and UK.
On Friday, Australia’s Trade Minister Dan Tehan revealed that trade talks with the bloc had been put on hold, telling Reuters he would meet with his EU partner Valdis Dombrovskis next week to discuss the 12th round of negotiations, which will take place in November instead of later this month.
The delayed discussions come amid strained relations with Paris, after London, Washington, and Canberra last month announced plans to build at least eight nuclear-powered but conventionally armed submarines and provide them to Australia. The new so-called AUKUS alliance is dedicated to a “free and open Indo-Pacific” – a move that appears designed to counter Beijing’s growing influence in the region.
As a result of the trilateral pact, Australia binned a $40-billion deal it had with France’s Naval Group for a dozen submarines, leaving Paris furious.
French Foreign Minister Jean-Yves Le Drian described Canberra’s actions as a “stab in the back,” and said Europeans needed to reflect “on the very concept that we have of alliances and partnerships.”
Australia has scrambled to make amends in the wake of the fallout, which saw French diplomats sent home from Canberra and Washington for consultations.
Last month, Tehan said a full trade agreement with the EU would be beneficial for both Australia and Brussels, as the bloc would use it as a way to “strengthen its engagement with the Indo-Pacific, because they realize that the region carries the economic weight of the world.”
European Commission President Ursula von der Leyen sided with France in the subs spat, however. Speaking to CNN last month, she remarked that “one of our member states has been treated in a way that is not acceptable,” and said the three countries had “a lot of open questions” to answer.
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