[This article was actually selected to be published on Newsworthy, UNSW's student publication]
On the 11th of June 2022, nine months after the failed submarine deal between Australia and France, a settlement has been found between the Commonwealth and Naval Group. The Australian government will pay $835 million to the French defence contractor, as compensation for backing away from a deal that would have seen Australia acquire French submarines.
As this deal occurs three weeks after the federal election, it might seem like politics played a large role in resetting the relationship between the two countries after the diplomatic freeze. While it cannot be considered as the sole factor, the change of government in Canberra did not go unnoticed in Paris.
“The defeat of Mr. Morrison… is very fine by me.” Outgoing French Foreign Minister Jean-Yves Le Drian had indeed strong feelings about Australia backing out of the $90 billion defence contract last September. Since then, the French felt betrayed and humiliated. From their point of view, Australia, the United Kingdom and the United-States (through the AUKUS military partnership) went behind the back of an ally to negotiate their own deal, while the original one was officially still going ahead. Asked whether he thought if then Prime minister Scott Morrison was a liar, French President Emmanuel Macron also spoke in unambiguous terms “I don’t think, I know”.
But after open tensions, we can expect French officials to use a more diplomatic language when commenting on the Australian prime minister. Indeed, even though the Albanese government will go on with the AUKUS deal, three elements allowed for a reset of the relationship.
The first one is time. If the federal election really helped the French to see the water under the bridge flow faster, it is worth noting that negotiations for the financial compensation started months ago. “This kind of deal does not happen in one week”, as Ross McInnes reminds us. Mr McInnes, a businessman, is the French Special Representative for Australia, appointed by the French Ministry of Foreign Affairs. He states that Naval Group representatives, as well as Australian senior civil servants and diplomats have been negotiating a settlement for a while; and Mr McInnes gives them credit for reaching a fair deal. “The tensions were with Mr Morrison, Mr Dutton and Mrs Payne who have been duplicitous towards us”. And changes were made on this aspect over time.
Another condition allowed for a de-freezing of the relationship. Since the original contract was signed in 2016, the French started working on the submarines, and the cancellation of the deal made their investments vain. That’s why it was also important for them to receive a financial compensation. Sébastien Lecornu, the new French Armed Forces Minister, acknowledges in a statement that the $835 million settlement is “fair and equitable” for parties involved.
A third element revolves around the common interests of the two countries. In his statement, French Armed Forces Minister describes France and Australia as neighbouring countries, through New-Caledonia. And the two countries share the ideal of a stable region. According to Hugh Piper, Research and Policy Manager at the James Martin Institute for Foreign Policy, it is especially true when considering the growing influence of China in the Pacific. “Australia and France have a very similar way of looking at the threat and the nefarious influence that China is currently posing in the region”. And a common antagonist can be a way to put aside some differences. More broadly, it is a general statement when Mr. Piper says that the two countries have “too many shared issues that they need to cooperate on for them not to work together”.
Therefore, the future will see a re-establishment of the Australian-French relationship after a setback. The results of the election won’t change the submarine contract, but a new government is a good way to press the refresh button on a diplomatique dispute. In the future, Australia might want to avoid seeing one of its partners feel humiliated, and paying for submarines that won’t come. A stable and coherent Defence strategy, whoever the Prime minister is, can allow that.
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