EU-Australia trade deal on chopping block amid submarine fallout

·2-min read

Talks between the European Union and Australia over a free trade agreement have been postponed in the wake of Canberra’s decision to back out of a 56 billion euro submarine military contract with France.

Almost four years of trade negotiations, which had reportedly been going well, have been postponed for a month, an EU official in Canberra told AFP.

The news casts doubts on the future of the wide-ranging pact, which Australia hopes will benefit its agricultural goods, which are subject to high taxes when entering Europe.

The EU, meanwhile, wanted the agreement to provide easier access to government procurement and lower trade barriers for chemicals, machinery and food.

The talks, which began in 2017 and fall under the remit of the European Commission, had entered their 11th round last June.

Canberra hoped to see the talks, scheduled for October, lead to an early trade deal.

Diplomatic row

Australia’s decision to break its contract with Naval Group – and instead opting to buy US-designed nuclear-submarines – sparked a major diplomatic row with France, which publicly declared that it could no longer trust the Australian government.

European Commission President Ursula von der Leyen told CNN the way France was treated was "unacceptable", adding there could be “no return to business as usual” without explanations.

On the sidelines of the UN General Assembly, European Council President Charles Michel condemned a "lack of loyalty" on the part of the United States and asked for "clarification".

Even former Australian Prime Minister Malcolm Turnbull spoke of a "betrayal of trust" that would alter "our relationship with Europe for years to come”.

However Australian Trade Minister Dan Tehan, who was due to travel to Europe for the talks, said: "We understand France's reaction to our submarine decision, but at the end of the day, every nation has to act in its national interest – which Australia has done.

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