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The European Union has postponed the next round of negotiations for a free trade agreement with Australia for a month. The move clearly is in retribution for the cancellation of the French $90 billion submarine contract.

French Submarine

Naval Group Australia (formerly DCNS) a subsidiary of French shipbuilding company Naval Group was Australia's international design and build partner for the Future Submarine Program.

The 12th round of negotiations was due to be held between officials of the EU and Australia in October but will now take place in November. France fell out with Australia after in a surprise move that canceled a deal with French company Naval Group a A$90bn submarine contract. 

French foreign minister Jean-Yves Le Drian told a parliamentary hearing that Australia had never expressed doubts about the A$90bn submarine contract or the strategic Indo-Pacific pact before breaking the contract.

“Everything I have told you is confirmed by the letter I received on 15 September from the Australian ministry of defence that said everything is OK let’s continue,” Le Drian said.

He said this suggested “someone lied”. He added: “Something doesn’t add up and we don’t know what.”

Le Drian reiterated that French contractor Naval Group had received a letter on the same day the contract was broken saying Australia was “satisfied” with the strategic review of the submarines and was ready for the “rapid signature for the second phase of the programme”. As a result, the decision to break the multibillion submarine contract was met with “stupor” in France, he said. The letter in question has not been publicly released

. Last week a spokesperson for Australia’s Department of Defence told the Guardian: “On 15 September 2021, Naval Group was advised that the formal exit of a system review had been achieved as required under the contractual arrangements in place at the time.” The spokesperson added: “This correspondence did not refer to or authorise commencement of the next phase of the program, which remained subject to the announcement of decisions by the Australian government.”

The Australian prime minister, Scott Morrison, has repeatedly defended the fallout from his joining with the UK and the US for a new defence cooperation arrangement to deliver nuclear-propelled submarines.

Source: Guardian, AFR

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