A long-planned round of free trade talks between Australia and the EU has been postponed, a European official confirmed on Friday, after fury over Canberra’s decision to cancel a major French submarine contract.
“The NAFTA trade round has been postponed for a month until November,” an EU official in Canberra told AFP, questioning the future of the long-range pact.
Australia abruptly canceled a multi-million dollar contract for 12 French submarines last month, opting instead to buy US-designed nuclear-powered vessels.
The decision sparked a major diplomatic dispute with one of the largest members of the European Union and now it appears to have touched ties with the entire bloc.
France has publicly said it can no longer trust the Australian government, accusing officials of lying and questioning whether the trade deal can go ahead.
Australian Trade Minister Dan Tehan, who was scheduled to travel to Europe for the talks, downplayed the decision in a statement to AFP.
“We understand the French reaction to our decision on submarines, but ultimately any nation must act in its national interest, which is what Australia has done,” he said.
Tehan said he plans to meet with EU Trade Commissioner Valdis Dombrovskis next week to discuss the twelfth round of negotiations.
“We will continue to prepare for the twelfth round of negotiations and work to conclude a free trade agreement that is in the interest of both Australia and the EU.”
The EU is Australia’s third most important trading partner.
In 2020, trade in goods between the two economies was valued at € 36 billion ($ 42.4 billion) and € 26 billion in services.
The next round of talks was to cover areas such as trade, services, investment, and intellectual property rights.