The Australian submarines: the perfect storm of failed diplomacy

Georges Ugeux
4 min readSep 22, 2021

For allies to be facing a public conflict like the one that emerged following the termination of the $60bn NAVAL Group contract between France and Australia, and the simultaneous signing of the AUKUS agreement between the US, UK and Australia, can only be described as a debacle for all parties involved.

The French entitlement is ill-conceived

Evidence emerged that the French authorities were not completely taken by surprise, unless they were naive enough to consider that they were divinely entitled to the contract. They already knew by the summer of 2021 that frustration was growing on the Australian side.

It was clear that the deal was on the wrong track at the time of its signing in 2016 — three full years after negotiations had begun. Could the French authorities really have considered that a price increase for conventional submarines from 36 to 52 billion euros was going to be gratefully accepted by the Australians, without going back to the drawing board? Did they treat their counterparts as clients or politicians?

The surprise of the French government was genuine, but not justified. They basically thought that they owned Australia, despite putting forth a proposition that was potentially lower in value than what competitors could offer. Indeed, the French contract was for diesel-powered submarines, versus nuclear-powered submarines in the UK/US proposal (who collaborate together and share technology for years). Nothing to do with Brexit.

Even a visit to Australia earlier in the year could not change this reality. Given the sophistication of the players in this international contract between governments, such a serious mistake can only be explained by a gallic feeling of entitlement. Yet, it does not explain the total absence of communication from the Australian government (let alone the US). Touché coulé…

The geopolitical environment changes the game

Since the beginning of the negotiations in 2013, the geopolitical situation of the Indo-Pacific region has changed. The threat represented by China has emerged as much more aggressive: the takeover of Hong Kong, the occupation of the China Sea and the threats against Taiwan have put the security of the region at the forefront of geopolitical preoccupations. China now represents 33% of Australia’s exports, which makes it difficult for Australia to balance its economic interests and its geopolitical independence. World peace is at stake.

Australia contributed further to its strained relationships with China by launching an inquiry into the source of the coronavirus, which Beijing wrongfully considers to be an internal matter, if not a State secret.

In this context, one would expect the Australian government to feel vulnerable and to look for powerful support from its allies. In this case, they turned to the United States for naval protection, which was arranged. France could not provide any such protection.

For obvious reasons, the Australians were attracted to the opportunity offered by the US to own nuclear-powered submarines and more importantly, to gain access to a technology (developed by the US and UK together) that the French have always refused to share. As expected, the Chinese expressed their dissatisfaction with the announcement: they cannot be pleased with the prospect of Australian submarines close to their waters.

The US politicization of the conflict

The presentation of Joe Biden as the world leader with the Australian PM and the UK PM in the background could only be perceived as a political and strategic victory. This is definitely how the French government perceived it (“a stab in the back”), and rightly so.

The announcements should have been left to the contractors, but Joe Biden is seeking international and domestic support. Weakened by the Afghan withdrawal, he banked on this victory to improve his international standing and to confirm that the USA is still present and relavent in the international scene.

This is where the problem lies. Joe Biden wants to lead the world and doesn’t seem to understand that this is not Obama III. The leadership of and trust in the United States have been severely eroded by Donald Trump, and the other world powers are questioning both the consistency and robustness of their principal ally. The Republican Party further heightens the global mistrust in the United States by continuing to make public finance, voting rights and abortion key elements of their political strategy.

How Secretary of State Antony Blinken (who knows France better than anyone), failed to warn the US President of the insult he was inflicting and the humiliation that France would inevitably feel (not to mention the involvement of post-Brexit UK in AUKUS), remains one of the most serious diplomatic blunders. It is only adding insult to injury, particularly given the deplorable way the United States has treated their NATO allies, following the international fiasco of the US withdrawal from Afghanistan.

Weakening European allies is extraordinarily dangerous. The relationship with China is at stake. European countries are more pragmatic than the US, but the future of democracy lies in a strong partnership between the European Union and the United States.

The recent reopening of the borders to European citizens will help. The core of the matter, however, are the risks associated with a singular focus on China putting Europe and Japan in the back seat. The United States needs partners, not followers to ensure a proper strategy to curb China’s attempts to destabilize the Western World. While the EU was not directly involved in the dispute, Germany joined France in the reprobation in a display of solidarity.

After years of diplomatic and military blunders, the US needs to transform its supremacy into a cooperative leadership. It is a revolution.

At the United Nations General Assembly, Joe Biden stated that the United States is “ready for a new era and it intends to face modern transnational threats through diplomacy, developmental aid and partnerships, not military force.”

He will be judged for his actions.

--

--

Georges Ugeux

CEO at Galileo Global Advisors and Adjunct professor Columbia Law School.