France withdraws ambassadors to Australia and US over submarines deal

Australia's Foreign Ministry says it "regrets" France's decision to immediately recall its ambassadors to Australia and the US in response to a new submarine deal.

French Foreign Minister Jean-Yves Le Drian said the ambassadors were recalled on request from President Emmanuel Macron, adding the decision was "justified by the exceptional seriousness of the announcements" made by the new AUKUS alliance between the US, Australia and the UK.

The pact meant Australia scrapped a $90 billion contract to buy French conventional submarines in favour of nuclear-powered subs built with US technology.

Mr Le Drian said the cancellation of the deal constituted "unacceptable behaviour between allies and partners, whose consequences directly affect the vision we have of our alliances, of our partnerships and of the importance of the Indo-Pacific for Europe".

A spokesperson for Australia's Foreign Minister Marise Payne said the decision to end the deal "was taken in accordance with our clear and communicated national security interests".

"Australia values its relationship with France, which is an important partner and a vital contributor to stability, particularly in the Indo-Pacific. This will not change," the spokesperson said.

"We look forward to engaging with France again on our many issues of shared interest, based on shared values."

Liberal MP Jason Falinski suggested the recall may have been influenced by domestic political pressure in France.

"The French are about to go through an election season," he said.

"There is no doubt that this is what the French government needed to do to send a signal to their people that they are standing up for their interests and French companies.

"That is important, but the Australian government is driven by other considerations."

Shadow Foreign Minister Penny Wong said the Morrison Government had failed to do the "diplomatic legwork" with France before the deal was announced.

"This isn't the first time Mr Morrison has blindsided an international partner," Senator Wong said.

"It's about time Mr Morrison learnt to prioritise Australia's relationships and national interest over photo ops.

"France is a country with shared interest in our region."

US State Department spokesman Ned Price said in a statement that France was a "vital ally" and Washington was hoping to continue the discussion on the issue at the senior level in the coming days.

"France is a vital partner and our oldest ally, and we place the highest value on our relationship," he said.

A White House official said the United States regretted France's decision and would continue to be engaged in the coming days to resolve differences between the two countries.

A recall of ambassadors is highly unusual between allied countries.

In 2019, Paris recalled its envoy to neighbouring Italy after the country’s leaders made critical public comments about the French government.

Last year, France recalled its ambassador to Turkey after Turkish President Recep Tayyip Erdogan said Mr Macron needed mental health treatment.

France says it can't trust Australia

Earlier, France said it was unable to trust Australia in ongoing talks on forging a trade deal with the EU.

Paris, which has called the Australian decision a "stab in the back", appeared to issue a threat that it could affect far-reaching trade talks.

"We're having trade negotiations with Australia," European Affairs Minister Clement Beaune told the France 24 news channel.

"I don't see how we can trust our Australian partners."

The European Commission, which negotiates trade deals on behalf of its member governments, and Australia this spring completed an 11th round of trade negotiations that began in 2018.

The next round of the talks, which cover areas including trade, services, investment and intellectual property rights, is scheduled for this year.

The EU is Australia's third-biggest trading partner, with 2020 trade in goods valued at 36 billion euros ($58 billion) and at 26 billion euros in services.

France's Naval Group, partly owned by the state, had been chosen to build 12 conventionally powered submarines for Australia, based on France's Barracuda nuclear-powered subs in development.

The contract was worth about $50 billion when announced in 2016.

But US President Joe Biden, British Prime Minister Boris Johnson and Scott Morrison announced on Wednesday a new defence pact that would see Australia get a nuclear-powered submarine fleet, a privilege Washington has until now only reserved for Britain.

'Deliberately kept in the black'

In an interview with the ABC on Friday, French Ambassador Jean-Pierre Thebault said he only learned of the Australian government's decision to tear up the contract with Naval Group through media reports.

"We were deliberately kept in the black," Mr Thebault said.

Earlier on Friday, Mr Morrison rejected French criticism that it had not been warned, saying he had raised the possibility in talks with the French President that Australia might scrap the 2016 deal.

Mr Morrison acknowledged the damage to Australia-France ties but insisted he had told Mr Macron in June that Australia had revised its thinking.

"I made it very clear, we had a lengthy dinner there in Paris, about our very significant concerns about the capabilities of conventional submarines to deal with the new strategic environment we're faced with," Mr Morrison told Adelaide radio station 5AA.

Shadow Attorney-General Mark Dreyfus said the federal government must explain how it would repair "this important relationship" with France.

"The impact on our relationship with France is a concern particularly as it is a nation with important interests in our region," Mr Dreyfus said.

"The French were blind-sided by this decision and Morrison should have done much more to protect the relationship."

The French announcement came as Ms Payne was speaking at the American Enterprise Institute think tank in Washington.

She gave no sign she was aware of the move.

Referring to the submarine deal, Ms Payne said such commercial and strategic decisions were difficult to manage, but there was "no question" that France remained a valued ally.

"I absolutely understand the disappointment," she said.

"My task is to work as hard as I can … to make sure that they do understand the value we place on the role that they play and do understand the value we place on the bilateral relationship and the work we want to continue to do together."