According to a French diplomat, Australia made a “big error” by cancelling the submarine agreement.

Australia made a “major” diplomatic error by abandoning a multibillion-dollar contract for French submarines in favour of a deal with the US and Britain, France’s envoy to Canberra said on Saturday.

Following a trilateral security collaboration, Canberra said on Thursday that it would cancel its 2016 agreement with France’s Naval Group to develop a fleet of conventional submarines in favour of building at least eight nuclear-powered submarines with US and British technology.

The move infuriated France, a NATO ally of the US and Britain, forcing it to withdraw its ambassadors to Washington and Canberra, as well as China, a significant rising power in the Indo-Pacific area.

Malaysia warned on Saturday that Canberra’s decision to build nuclear-powered submarines might spark a regional nuclear arms race, echoing Beijing’s concerns.

“It will incite other powers to act more forcefully in the region, particularly in the South China Sea,” Malaysia’s prime minister’s office stated without naming China.

Beijing’s foreign policy in the region has become increasingly assertive, particularly its maritime claims in the resource-rich South China Sea, some of which conflict with Malaysia’s own claims.

“This has been a huge mistake, a very, very bad handling of the partnership – because it wasn’t a contract, it was a partnership that was supposed to be based on trust, mutual understanding and sincerity,” France’s Ambassador Jean-Pierre Thebault told reporters in Canberra before returning to Paris.

France has previously branded the cancellation of the deal – valued at $40 billion in 2016 and reckoned to be worth much more today – a stab in the back.

‘DUPLICITY’

Foreign Minister Jean-Yves Le Drian later described the row as a “crisis” in France’s relations with the United States and Australia.

Outside view of the Quai d’Orsay building, headquarters of France’s Ministry of Foreign Affairs in Paris, February 28, 2003.

“There has been duplicity, contempt and lies – you can’t play that way in an alliance,” he told France 2 television.

According to US State Department spokesperson Ned Price, France is a “critical ally” and the US will endeavour to settle the issues in the coming days.

Analysts believe that, while US officials hope the issue will pass quickly, it might have long-term consequences for Washington’s alliance with France and Europe, and it calls into question the united front that the Biden administration has been attempting to construct against China’s expanding influence.

Australia stated that it regretted the recall of the French ambassador, that it cherished its relationship with France, and that it would continue to engage with Paris on other topics.

“Australia understands France’s deep disappointment with our decision, which was taken in accordance with our clear and communicated national security interests,” a spokesperson for Foreign Affairs Minister Marise Payne said on Saturday.

Thebault said he was very sad to have to leave Australia but added there “needs to be some reassessment” of bilateral ties.

In separate comments made to SBS radio, Thebault said of the ditched agreement: “It was not about selling salads or potatoes, it was a relationship of trust at the highest level covering questions of the highest level of secrecy and sensitivity.”

The spat between Paris and Canberra is the worst since 1995, when Australia rejected France’s plan to resume nuclear testing in the South Pacific and recalled its ambassador for discussions.

Public opinion in France, where President Emmanuel Macron is poised to run for re-election next year, has also been harsh on Australia and the United States.

“You can understand for geopolitical reasons Australia getting closer to other anglophone countries like the United States and Britain,” said Louis Maman, a Parisian surgeon out for a stroll on Saturday on the Champs-Elysees.

“But there was a real contract and I think there was an alliance and a friendship between Australia and France. It’s spoiling a friendship,” he said. “I took it as a betrayal.”

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