As a conflict with France over the so-called Aukus security alliance escalates, trade negotiations between Australia and the European Union have been postponed.
Canberra terminated a $37 billion ($27.5 billion) deal with France to build a fleet of conventional submarines earlier this month.
Instead, it will construct at least eight nuclear-powered submarines using technology developed in the United States and the United Kingdom.
Paris was enraged by the decision, which it described as a “stab in the back” by the US and Australia. In fact, France recalled its diplomats from both Canberra and Washington shortly after the Aukus accord was revealed.
The ambassador to Washington will now resume his duties, but it is unclear whether the envoy to Canberra will follow suit.
In support of France, European Commission President Ursula von der Leyen has expressed doubts about the EU’s ability to reach a trade agreement with Australia.
The Australian Trade Minister, Dan Tehan, declined to comment on what role, if any, the submarine deal played in prolonging negotiations, but he did reveal that the next round of talks, which were set to begin on October 12th, had been postponed until the following month.
The European Commission stated in June that negotiations on a free trade agreement had “progressed in most areas of the prospective agreement” following the most recent round of talks.
A number of topics, including trade, investment, and intellectual property rights, were slated to be discussed in the next round of negotiations. The EU is Australia’s third-largest trading partner, with about $72 billion in goods and services traded last year.
Aukus, according to analysts, is the most significant security agreement between the three countries since World War II. France considers the Asia-Pacific region to be of critical strategic and economic importance, with 1.65 million French residents living on islands such as La Réunion, New Caledonia, Mayotte, and French Polynesia.