EU postpones trade talks with Australia amid sub deal controversy

Australia’s trade minister said on Friday talks with the European Union over a trade deal have been postponed, as a row over Canberra’s decision to cancel a $40 billion deal with France escalated.

Australia last month cancelled a deal with France’s Naval Group to build a fleet of conventional submarines and will instead build at least eight nuclear-powered submarines with US and British technology after striking a trilateral security partnership called AUKUS with those two countries.

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The cancellation has angered France, which accused both Australia and the United States of stabbing it in the back. Paris recalled its ambassadors from both Canberra and Washington.

In solidarity with France, European Commission president Ursula von der Leyen has questioned whether the bloc could strike a trade deal with Australia.

Australian Trade Minister Dan Tehan declined to comment on the role the submarine deal had played in delaying negotiations but he confirmed the 12th round of talks scheduled for Oct. 12 had been postponed by a month.

“I will meet with my EU counterpart Valdis Dombrovskis next week to discuss the 12th negotiating round, which will now take place in November rather than October,” Tehan said in a statement.

The Commission confirmed the next round of talks had been postponed by a month from mid-October, saying that the negotiations were focused on substance over speed.

“A one-month delay will also allow us to better to prepare,” a spokesperson said.

The Commission previously said the AUKUS announcement had prompted a “period of reflection.”

Read more: EU-US tech talks to go ahead despite France’s outrage over Australia submarine deal