France calls on EU allies to freeze Australia out of free-trade agreement; Tehan insists talks still on

Dan Tehan says he’s confident discussions over the EU-Australia free-trade agreement will continue despite French fury over the cancelled subs contract.

France’s ambassador to the US, Philippe Etienne, left, says the Australian submarine deal was ‘an essential part of our Indo-Pacific strategy and engagement’. Picture: AFP

Trade Minister Dan Tehan says he’s confident discussions around the EU-Australia free-trade agreement will continue, despite French attempts to scuttle the deal.

France is seeking to scuttle the proposed EU-Australia free-trade agreement, asking fellow European nations to “reconsider” the deal in retaliation for the Morrison government’s cancellaton of the $90bn submarine contract.

Furious French government representatives are asking fellow EU countries to join a French campaign to pull out of the three-year talks on the agreement because of what is seen as an Anglosphere betrayal of an EU member.

However, ahead of his trip to Europe to discuss the trade deal on October 12, Mr Tehan said he could see “no reason” why those discussions wouldn’t continue, saying it was in the “mutual interest” of both parties for negotiations to continue.

He also defended the government’s conduct with their French counterparts, reiterating that Scott Morrison was simply looking after Australia’s sovereign national interests.

“So those conversations were being had and ultimately when it comes to making a decision in your sovereign national interest,” Mr Tehan told ABC’s Radio National on Monday morning.

“You have to weigh up everything and you have to weigh up what ultimately is in the best interest of, especially the geostrategic environment that we currently find ourselves in. And that’s what the government has done.”

Earlier on Monday, French ambassador Jean Pierre Thebault accused Mr Morrison of keeping his country in the “dark intentionally until the last minute,” warning the incident could mean “we’re not friends.”.

Despite Defence Minister Peter Dutton insisting his French counterparts were informed of the decision beforehand, Mr Thebault said Australia’s conduct was not how you treated allies, describing the situation as a “big rift caused by attitudes we discovered afterwards”.

“The question seems to be only did we get the call one hour, or four hours before the announcement,” Mr Thebault told ABC Radio National.

“No, when you’re partners, when you are trusted partners, don’t behave like that, it’s a question of principle, is a question of dignity and mutual respect in relations between states.”

The French ambassador said while Mr Morrison had discussed issues with his French counterpart in June, there was never any sign the deal was in jeopardy of being scrapped.

“This is not an Australian attitude towards friends, and maybe we’re not friends,” he said.

France recalled its ambassadors to the US and Australia on Friday and cancelled a gala at the French embassy to celebrate Franco-American relations, following the announcement of a three-way security pact between Australia, the United States and United Kingdom (AUKUS) last week to get Australia nuclear submarines from the US.

France Armed Forces Minister Florence Parly has also cancelled a planned meeting with her British counterpart Ben Wallace as amid increasing French fury.

US President Joe Biden will attempt to defuse the escalating crisis this week when he speaks with French President Emmanual Macron in a phone call which the White House requested.

France’s ambassador to the US, Philippe Etienne, one of France’s most senior diplomats, who accompanied Mr Macron to Australia in 2018, told The Australian the 2016 submarine deal was “much more” than an agreement among businesses.

“It was an essential part of our Indo-Pacific strategy and engagement which our President announced in Australia in 2018,” he said, speaking to France’s shock and humiliation. Scott Morrison said on Sunday he understood the French disappointment over the cancellation of the contract, which could lead to Australia paying $2.5bn to the French Naval group, but said the contract was no longer in Australia’s best interests.

The Prime Minister said he raised concerns about the Naval Group contract with the French government in the past six months and Mr Macron was told of the decision the night before it was announced. “Of course we are disappointed with the recall of the ambassador and we understand their disappointment but we must take decisions in our clear sovereign interest,” Mr Morrison said.

Mr Morrison said the best defence and intelligence strategic advice was the French submarine would not be able to do what Australia required in the future and the government could not “go forward” with a contract that did not serve Australia’s national interest.

European diplomats are describing the situation as a crisis in relations and other EU nations are likely to endorse French calls for action. But the Australian government is less concerned about the French calls because the EU-FTA has shown “little movement” in talks. The Australian government is also aware of EU members wishing to continue their bilateral trade relations and existing contracts, especially in defence.

Australia kicked off free trade talks with the European Union, the nation’s second-biggest trading partner and second-biggest source of foreign investment behind the US, in July 2018 seeking abolition of EU tariffs of up to 12 per cent on Australian minerals, metals, and chemicals.

But negotiations have moved slowly with the EU insisting on “content before speed” in the agreement and disputes over geographical naming rights – for cheese and wine – and “carbon borders” placing more European tariffs on Australian imports because there is no commitment to achieve net zero carbon emissions by 2050.

Talks with the UK on post-Brexit trade with Australia have moved more quickly, starting in June 2020 and agreement in principle in June this year.

Penny Wong said while Labor supported the defence and strategic decisions there were “very concerning developments” in the relationship with France.

“When it comes to preparing the groundwork with important partners, like France, I think it is yet again Mr Morrison focusing on announcements and not doing the whole job,” she said.

French Foreign Minister Jean Yves Le Drian, speaking on French TV, accused Australia and the US of “lying, duplicity, a major breach of trust and contempt”.

A senior French official in Washington complained France had been “blindsided” by the decision and suggested the French deal was better than the proposed US deal. “It’s very probable the American submarines will arrive later, be much more expensive, and nuclear propulsion is not an easy topic”, he told The Australian.

“We try to tell the truth. We are one of your closest allies in the Indo-Pacific.”

Defence Minister Peter Dutton defended the handling of the cancellation of the $90bn French contract, arguing the Morrison government had been “upfront, open and honest.”

Mr Dutton said he had raised concerns in talks with French Defence Minister Florence Parly and that Paris had sent a representative to Australia a couple of weeks ago because the contract was in trouble.

“We’ve been open about our concerns,” Mr Dutton told Sky News on Sunday. “We need to act in our national interest.”

Opposition foreign affairs spokeswoman Penny Wong said Mr Morrison’s fixation on making announcements contributed to the diplomatic fallout from the cancellation.

Senator Wong said the deal demonstrated the Prime Minister had failed to do the requisite job, as she called on him to “repair the relationship” between the countries.

“I think what you can see here is again Mr Morrison has been so focused on making the announcement that he doesn’t take responsibility for doing the whole job,” Senator Wong told ABC radio on Monday morning.