France could block EU-Australia trade deal in retaliation for submarine crisis

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France is threatening to block free trade talks between Australia and the European Union in retaliation for Canberra scrapping a submarine contract with Paris in favor of a security alliance with the US and Britain.

France's European Affairs Minister Clement Beaune told Politico: “Keeping one's word is the condition of trust between democracies and between allies. So it is unthinkable to move forward on trade negotiations as if nothing had happened with a country in which we no longer trust.”

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Australian and EU officials are scheduled to hold their next round of talks over a trade deal on October 12.

The US and Britain announced on September 15 a new Indo-Pacific security alliance that will equip Australia with nuclear-powered submarines, which is widely seen as a move to counter China’s growing influence in the region.

Australia then scrapped a 2016 multi-billion-dollar contract with France to build 12 conventional diesel-electric submarines.

The announcement enraged Paris that accused the Washington of “duplicity”, and Canberra of “betrayal” and declared that a crisis struck at the heart of Western alliances.

France recalled its ambassadors to the US and Australia.

While the European Commission has the power to conduct trade talks on behalf of all 27 members of the EU, it cannot successfully proceed with a deal in the face of adamant French opposition.

Bernd Lange, chair of the European Parliament's trade committee, told a briefing: “I guess this will not lead to stopping negotiations and talks with Australia, but they will be much more complicated.”

With Reuters

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