We may never have Paris again: Australia grapples with the consequences of sinking subs

When Foreign Affairs Minister Marise Payne and Defence Minister Peter Dutton held 2+2 consultations with their French counterparts three weeks ago it was business as usual on the submarines front.

“Both sides committed to deepen defence industry cooperation and enhance their capability edge in the region. Ministers underlined the importance of the Future Submarine program,” a statement released says.

All the gushing talk of deepening cooperation, a historically close strategic partnership, shared values and principles, gave no indication that for the past 18 months the Morrison government had been working towards screwing over the French.

On Thursday morning Prime Minister Scott Morrison announced the $90 billion submarine contract with French manufacturer Naval Group had been scrapped. French President Emmanuel Macron found out just hours earlier over the phone. Shared values and close strategic ties be damned.

“They had every reason to know we had deep and grave concerns,” Morrison said of the project.

The French are pretty pissed off, and it’s clearly news to them. On Friday France recalled ambassador Jean-Pierre Thébault, leaving Australia in a diplomatic row with a country it has historically counted as an ally.

So far the government appears blindsided by the depth of France’s rage, and unprepared for the geopolitical consequences to come out of yet another unforced error in the foreign policy space.

The communication

According to Morrison and Dutton, Australia had been raising concerns with France over the submarines for some time.

The government, Dutton said, had always been “upfront, open and honest”, noting that he’d raised concerns with French counterpart Florence Parly at last month’s consultations. 

Dutton and Morrison have a point: the problems with the Naval Group contract — spiralling costs, delays, a tetchy relationship with Defence — have been well documented for many years. So much so that at Senate estimates in June, Defence secretary Greg Moriarty confirmed he was considering alternative submarine options.

When Morrison and Macron met at the Élysée Palace in Paris that month, Macron reaffirmed France’s “full and complete commitment” to the submarine project. By then, Naval Group had engaged lobbyists in Canberra. 

Still, the government’s pivot clearly took Paris by surprise. Yesterday Morrison confirmed he’d called Macron at 8.30 on the night before the announcement. His government had been quietly talking about problems with the Future Submarine Project for 18 months, without alerting the French. Judging by their reaction, Morrison’s call was clearly unexpected.

Minister for Europe and Foreign Affairs Jean-Yves Le Drian, who sat down with Payne and Dutton just months ago, has at various points called the decision a “stab in the back” and “duplicity”.

“We thought we were mates,” Thébault told reporters on en route to Sydney airport. 

How France could respond

The French response might seem like a bit of overheated Gallic histrionics. Actually there are many ways France can screw us. Paris’ anger could scupper the government’s hopes for a free trade agreement with the European Union. The French are already calling on other countries in the bloc to reconsider the deal. France was meant to play a key role in those negotiations. Now it will not. 

One sticking point for FTA negotiations is the EU’s proposed carbon border adjustment mechanism, where tariffs will be placed on imports based on emissions. Tensions with France could make it harder for Australia to overcome a growing gulf with the EU on climate, particularly ahead of the COP26 summit in Glasgow in November.

And the falling out seriously undermines Australia’s strategic cooperation with France. Work done to maintain closer military ties has come undone. The submarine deal was just the tip of the iceberg for heightened cooperation in the Indo-Pacific, including vital maritime surveillance work. In June, Macron offered Australia support as it faced the “front lines of tensions” in the region. That easy support can’t be taken for granted any more.

It’ll be 18 months before we get to know much more about the nuclear submarines. They might not be protecting Australia until 2040, in a geopolitical environment that will be dramatically different from today’s. In the short term, however, Australia must live with the consequences of angering the French.