(Bloomberg) — Australia is joining a new Indo-Pacific security partnership with the U.S. and U.K. that could pave the way for it to acquire nuclear-powered submarines, likely signaling the end of its deal with France to buy conventional craft.
Australian Prime Minister Scott Morrison, U.S. President Joe Biden and U.K. Prime Minister Boris Johnson are set to announce the trilateral security partnership in a virtual meeting on Wednesday, according to senior Biden administration officials.
The new framework comes as China expands its military presence in the region, though one of the U.S. officials said it isn’t targeting China or any other country. As part of the agreement, the countries aim to increase cooperation on other defense measures, such as cybersecurity and artificial intelligence, the officials said.
The U.S. and U.K. are backing Australia’s ambition to acquire nuclear-powered submarines, and the countries will begin 18-months of talks over requirements that would need to be met for obtaining the submarines. Australia isn’t seeking nuclear weapons, one of the officials said.
The plan to use American and British technology for a fleet of nuclear-powered submarines would scrap Australia’s $90 billion program to build up to 12 French-designed submarines, the Australian Broadcasting Corporation reported earlier.
A spokesperson for French military shipbuilder Naval Group declined to comment.
Reports that the submarine deal would be scrapped came as a surprise to the French company, according to a person familiar with the matter. Naval Group had met all its contractual obligations to date, from pricing to timelines to pledges for local production in Australia, the person said. It had expected commitments over 50 years under its contracts and would intend to negotiate a breakup fee as a result.
The White House views the security pact as binding Australia to the U.S. and U.K. for generations and noted that it comes during the 70th anniversary of the Australia-New Zealand-U.S. Security Treaty, ANZUS.
The new alignment is seen as a rare, one-off engagement, meaning there’s no plan for additional countries to join the framework, the official said.
Biden held a phone call with Chinese President Xi Jinping last week to complain about Beijing’s lack of engagement on bilateral and global issues such as climate change and the Covid-19 pandemic.
Biden proposed an in-person meeting with Xi but the Chinese president declined to commit to one. White House Press Secretary Jen Psaki said there are ongoing discussions “about what the next steps should be about engagement on the leader-to-leader level.”
Biden mentioned the trilateral plan in his conversation with Xi, though he didn’t share specifics, one official said. The Biden administration will explain the intentions behind the pact — which the countries are calling AUUKUS — to countries that are interested, the official added.
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