Australia Reacts, EU Postpones Trade Talks Amid Dispute

Australia’s finance minister said he saw the “value” of free trade talks between the European Union and Australia being postponed after a dispute arose over Canberra’s decision to cancel a multi-million-euro French submarine contract, an EU official said.

Treasury Secretary Simon Birmingham said people should not “over-interpret.”

“These are trade talks that I know the EU continues to view as valuable and important. Of course Australia sees the value and importance of these talks,” Birmingham told Sky News Australia on Friday.

Miriam Garcia Ferrer, spokeswoman for the EU commission in charge of trade, confirmed the decision to the Associated Press Friday, but gave no specific reason for the delay.

The European Union is in talks to reach a trade deal with Australia in 2018. A 12th round of talks is scheduled to take place later this month via video conference.

Australia signed a $66 billion contract with the French government’s majority-owned Naval Group in 2016 to build 12 conventional diesel-electric submarines.

But PM Scott Morrison canceled the contract last month as part of an alliance with the US and UK that will prepare at least eight nuclear-powered submarines for the Australian fleet.

The move not only angered France, but also sparked criticism from European Commission president Ursula von der Leyen.

France has accused the US and Australia of treason over the cancellation of the contract and its successor, which the three-nation alliance had secretly negotiated. France briefly recalled its ambassador from Washington in protest, and so far there is no word on when the French ambassador might return to Australia.

According to European Union data, the 27-nation bloc is Australia’s third-largest trading partner in 2020, after China and Japan, ahead of the US.

After the previous round of talks in June, the European Union said the discussions were held “in a favorable and constructive atmosphere and demonstrate a shared commitment to negotiating an ambitious and comprehensive agreement.”

An EU official with direct knowledge of the matter said the dispute over the submarines played a role in the decision to postpone talks but stressed that however no agreement was ready to be confirmed.

The spokesman spoke on condition of anonymity because he was not authorized to speak publicly about the case.

The official said the delay was not the end of the talks and insisted that the two sides would continue to work together to reach an agreement. [uh/lt]

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