(Bloomberg) — Australia is joining a new Indo-Pacific security partnership with the U.S. and U.K. that will allow it to acquire nuclear-powered submarines, sparking a rift with France at a time when the Biden administration is pushing allies to counter Chinese assertiveness.
Australian Prime Minister Scott Morrison, U.S. President Joe Biden and U.K. Prime Minister Boris Johnson earlier unveiled the security partnership in a virtual meeting. France said the new partnership scuppers Australia’s 2016 deal with a French shipbuilder Naval Group to build up to 12 submarines — a project that had blown out to an estimated A$90 billion ($66 billion).
In a press briefing on Thursday, Morrison defended the decision and said he understands it’s disappointing for France. Touting a “forever partnership” with the U.S. and U.K., he said it would take as many as 18 months to work out details of the agreement before work on the subs begins in Australia. Building and commissioning such nuclear-powered submarines can take years, or even decades.
“As a prime minister I must make decisions that are in Australia’s national security,” Morrison said. “I know that France would do the same.”
Lack of Coherence
The decision to scrap the program was “contrary to the letter and spirit of the cooperation that prevailed between France and Australia” and shows “a lack of coherence,” France’s Minister of Europe and Foreign Affairs Jean-Yves Le Drian and Armed Forces Minister Florence Parly said in statement.
“The regrettable decision that has just been announced regarding the FSP program only reinforces the need to make the issue of European strategic autonomy loud and clear,” the French ministers said in reference to the Future Submarines Program. “There is no other credible way to defend our interests and our values in the world, including in the Indo-Pacific.”
Early reports that the submarine deal would be scrapped came as a surprise to Naval Group, according to a person familiar with the matter. The company had met all its contractual obligations to date, from pricing to timelines and pledges for local production in Australia, the person said. It had expected commitments over 50 years under its contracts and would negotiate a breakup fee.
Morrison said the nuclear submarines would be built in Adelaide. That city is where Naval Group has been planning to build the 12 conventionally-powered submarines in a program that has been hit by reports of time and cost over-runs.
Realistically, the nuclear-powered submarines won’t be ready for commission in this decade, said Paul Maddison, former commander of the Royal Canadian Navy. “It’s a bold decision and a real opportunity for Australia.”
Morrison said Australia isn’t seeking nuclear weapons and the submarines would be conventionally armed. News of Australia’s deal prompted New Zealand Prime Minister Jacinda Ardern to say the country wouldn’t allow Australian nuclear-powered submarines to enter its waters.
She cited a decades-old nuclear-free policy as one of the reasons why New Zealand wasn’t invited to join this new partnership. However, the pact means “absolutely no change in our already strong relationship with the United States, the U.K. and of course, Australia.”
China Military Capability
The new framework comes as Beijing increases its military capability and influence in the Asia-Pacific, though a senior U.S. official said it isn’t targeting China or any other country. As part of the agreement, the countries intend to increase cooperation on other defense measures, such as cybersecurity and artificial intelligence.
“We all recognize the imperative of ensuring peace and stability of the Indo-Pacific over the long term,” Biden said earlier at the initial announcement of the partnership.
“We need to be able to address both the current strategic environment in the region and how it may evolve, because the future of each of our nations and indeed the world depends on a free and open Indo-Pacific, enduring and flourishing in the decades ahead,” he added.
Biden had a telephone conversation 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. He proposed an in-person meeting with Xi but the Chinese president declined to commit to one.
The U.S. President also mentioned this 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.
Morrison said he had further calls with allies around the region after announcing the partnership, which he would extend to China despite growing tensions between the two countries that have put ministerial-level ties in a deep freeze. “There’s an open invitation for President Xi to discuss other matters,” he said.
Australia Relations
The pact will be seen as a coup for Morrison, who has wanted to ramp up his nation’s involvement in U.S.-led pacts in a bid to counter what he sees as an assertive China in the Indo-Pacific. That’s included crafting the Five Eyes intelligence-sharing network into a group that’s issuing statements criticizing Beijing’s human rights record and bolstering the Quad security arrangement that also involves Japan and India, and is due to hold its first leaders’ level meeting in Washington this month.
Under Morrison’s watch, Australia’s relations with China — it’s largest trading partner — have nosedived in the wake of his government’s call last year for independent investigators to enter Wuhan to probe the origins of the coronavirus. Beijing has since inflicted a range of trade reprisals, including crippling tariffs on Australian barley and wine, while blocking coal shipments.
Herve Lemahieu, a director of research at the Lowy Institute, described Morrison’s new deal as momentous, with Australia set to join an elite group operating nuclear-powered submarines.
“It does send a very clear signal,” Lemahieu said in a Bloomberg Television interview. “This is very clearly designed to bolster alliances amid rising tensions with China over disputes ranging from the South China Sea to Taiwan. There is no way America would be sharing this kind of technology with Australia if it weren’t for China.”
(Writes through and updates with more details from Morrison briefing, New Zealand comments, analyst view)
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