‘Trust is missing’: Submarine row could delay EU-Australia trade deal

Canberra”s decision to scrap a €56 billion contract for submarines with France has complicated the EU’s negotiations for a free trade deal with Australia, an MEP has warned.

Bernd Lange, chairman of the European Parliament’s Committee on International Trade, called it a “question of trust”.

“Now the trust is missing,” he told Aussie broadcaster ABC, and “it is a question of how serious and how reliable Australia is”.

“Some [EU] members could ask for more safety nets and more safeguards in such an agreement, so I guess the dialogue and the negotiation will take more time,” he added.

Although Lange said there was “no clear commitment to stop” negotiations, he ruled out the deal would be struck before the next French presidential election, in May 2022.

Why did Australia cancel the submarine deal?

Last week, US President Joe Biden announced a new alliance involving the UK that would deliver Australia at least eight nuclear-powered submarines.

It meant Canberra cancelled an existing contract with France for 12 diesel-powered submarines, something Paris called a “stab in the back”

France also recalled its ambassadors from the US and Australia.

On Monday, French Foreign Minister Jean-Yves Le Drian declared that there was a “crisis of trust” in the US.

The White House responded saying it will continue “to be engaged to resolve our differences”, while Australian prime minister Scott Morrison denied French claims that they only became aware of the submarine deal the day it was announced.

On Monday, the EU’s top diplomat Josep Borell called for “less confrontation”, as he met the Australian foreign minister Marise Payne in New York for the UN General Assembly of world leaders.

He said “the current challenges to stability in the [Indo-Pacific] region” required “more cooperation and coordination among like-minded partners”, like the UK, Australia and the US, and “less fragmentation”.

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