The French government has been seething ever since Australia abandoned its $90 billion Australian dollars ($65 billion) deal last week with France in favor of a new military agreement with the United States and the United Kingdom.
“Keeping one’s word is the condition of trust between democracies and between allies,” France’s European affairs secretary Clément Beaune told Politico. His remarks were confirmed on Monday by a spokesperson. “So it is unthinkable to move forward on trade negotiations as if nothing had happened with a country in which we no longer trust,” Beaune added.
As part of the security pact, known as AUKUS, Australia will be supplied with the technology to construct a fleet of nuclear-powered submarines, considered to be superior to the conventionally powered vessels Canberra had previously agreed to buy from Paris. In response to the move, France recalled its ambassadors to the United States and Australia on Friday.
While the European Commission has the power to conduct trade talks on behalf of the 27-country bloc, it is unlikely to go ahead with the deal if the French are opposed to it.
“At the end of the last round with Australia, which took place in June, it was agreed that the next round would take place in October. This is the current state of play,” said Eric Mamer, chief spokesperson for the European Commission, after comments by the French minister. “We are analyzing the impact that the AUKUS announcement would have on this schedule.”
The European Union was Australia’s third largest trading partner in 2020, according to the European Commission. Goods trade between the two amounted to €36 billion ($42 billion) that year while trade in services was worth €26 billion ($30 billion) in 2019.
The threat to an EU trade deal comes at a time when Australia is looking to develop new export markets after relations with China, its largest trading partner, soured recently.
— Joseph Ataman and Saskya Vandoorne in Paris, and James Frater in London contributed to this report.