EU postpones trade talks with Australia amid submarine deal fallout

Australia’s Minister for Trade Dan Tehan 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 US$40 billion deal with France escalates.

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 with those two countries.

The cancellation has angered France, which accused both Australia and the US 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.

Tehan on Friday declined to comment on the role the submarine deal had played in delaying negotiations but 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 to Reuters.