French President Emmanuel Macron said Thursday that an offer to cooperate with Australia on submarines still stood, after a bitter row over a canceled contract last year threatened to torpedo relations.
Macron was left furious when Australia’s previous prime minister Scott Morrison abruptly tore up a contract for France to build a dozen diesel-powered submarines and announced a deal to buy US or British nuclear-powered subs.
The row derailed relations and threatened to sink an EU-Australia trade agreement, but the two sides have made up since Prime Minister Anthony Albanese took power in Canberra.
The delivery of the new nuclear submarines could take years, potentially leaving Australia short of capacity at a time when China is increasing its assertiveness in the region.
Speaking in Bangkok a day after meeting Albanese on the sidelines of a G20 summit in Indonesia, Macron said the French offer “remains on the table.”
He said France would not supply nuclear submarines to foreign countries, so the offer related only to conventional vessels. He added it would guarantee Canberra’s “freedom and sovereignty,” noting that construction would be in Australia.
“We will now see how they adapt to the difficulties (they face),” Macron said.
“There is a fundamental choice, which is to know whether they produce submarines in their own country or rely on another — whether they go for nuclear or not.”
Albanese hailed a new start in ties during a visit to Paris in July, stressing he would act with “trust, respect and honesty” in his dealings with Macron.
That meeting came after Australia agreed a massive compensation deal with French submarine builder Naval Group to end the contract.
The settlement of 555 million euros ($584 million) drew a line under the spat and was hailed by Albanese as “fair and equitable.” The original contract was worth an estimated 33 billion euros at the time.
The submarine row came as part of a new security pact between Australia, Britain, and the United States dubbed AUKUS aimed at countering a rising China.
France considers itself to be a Pacific power, thanks to its overseas territories including New Caledonia and French Polynesia.
But while it shares Australia’s concerns about China’s assertiveness, it has been keen to craft its own strategy for the region.
Macron is attending an APEC summit in Bangkok and on Friday he will give a speech as he seeks to relaunch his Indo-Pacific policy after the AUKUS humiliation.
“In this highly contested region, which is the theatre of a confrontation between the two major world powers, our strategy is to defend freedom and sovereignty,” Macron said on Thursday.
The APEC meeting comes hard on the heels of a G20 summit in Bali where Chinese President Xi Jinping and his US counterpart Joe Biden held landmark talks aimed at easing tensions between the world’s two biggest economies.