Biden’s Submarine Accord with Australia

Photo source: Politico

By Naveed Qazi | Editor, Globe Upfront

Australia has stabbed France in the back. They ditched a nuclear deal with them worth more than $66 billion and instead acquired nuclear powered subs from the United States. Canberra had signaled in June 2021 that it was looking to turn away from the contract signed in 2016, during the Turnbull government, with French company DCNS (now known as Naval Group) to build twelve Barracuda submarines. Outraged and humiliated, France had recalled its ambassadors from the U.S. and Australia.

France had hoped that its deal with Australia would bring the two countries strategically closer. According to a report in Guardian, France was even looking to protect its interests,  which include the overseas territories of New Caledonia and French Polynesia. It is the only European country with a presence in the region, with nearly two million French citizens and more than seven thousand troops.

When the deal was first announced in 2016, then Prime Minister Malcolm Turnbull suggested that the Barracudas would be built in Australia, with ninety percent local input, sustaining two thousand eight hundred local jobs. This was seen to shore up support for his government ahead of an election, which was then just weeks away. Few had thought it a coincidence that the subs would be built in Adelaide, which was once considered the headquarter of Australia's car manufacturing industry, which Turnbull’s government had effectively killed. Australia had already spent two billion AUD on the project. But, the promise of thousands of Australian jobs and a boon for local industry soon faded, too. According to an Oped by Zoya Sheftalovich in Politico: ‘By 2020, Naval Group and French government had revised the 90 percent local input figure down to 60 percent. By 2021, the French firm was pushing back against even that, saying Australian industry wasn't up to scratch.’

Although, when Australia signed a deal with the Biden government, French had been quoting precise commitment in the contract clauses, hinting that going out of the deal was impossible. In their defence, Australia cited the terms of one of its contracts with Naval Group, under which either Canberra or the French firm could terminate unilaterally "where a Party’s ability to implement the Agreement is fundamentally impacted by exceptional events, circumstances or matters."

According to the new deal, Australia will receive at least eight nuclear-powered submarines in the agreement by 2040 from US. Aside from vexing France, which will lose billions in expected revenue and $1.7 billion in sunk costs, the deal even infuriated China, which rebuked the U.S. and Britain for sharing highly sensitive nuclear technology. This deal had been done in secret.

The Australian Navy's six Collins-class submarines were set to reach the end of their service life in 2036. And in 2016, France was chosen over Germany and Japan to help Australia replace its older subs with 12 new diesel-electric submarines. At that time, the Australian government called the Future Submarine project the largest and most complex defence acquisition in the nation's history.

But while Australia needed new subs urgently, the first of the French submarines would not have been delivered at least until 2035, according to a report in Politico. The building timeline of the vessels would have extended into the second half of this century. In fact, Australia had announced recently that it would undertake an extensive and costly refurbishment of its old submarines to serve the navy until the new vessels were commissioned. However, they soon changed track and talked for a new military sales contract with the US.

Only six nations in the world have nuclear submarines. Nuclear-powered submarines bought from United States have several operational advantages over the submarines Australia would have received under the original deal with the French. They are faster and stronger. The U.S.-made vessels can last decades without a need to refuel, have greater range and are more difficult to detect than their conventional counterparts. The French-made vessels, on the contrary, were a nuclear submarine design converted to operate as diesel-electric hybrids.

This is only the second time in history that the US has agreed to share its capability of building nuclear-powered submarines with another country. The only other nation that has benefitted in the past is the UK, with which the US has shared the technology as part of an arrangement that dates to 1958.

The decision of Australia to partner with the U.S. and U.K. in a trilateral pact over France also signalled that its strategic view toward China has changed "very dramatically".

According to Garret Martin, co-director of the Transatlantic Policy Center at American University, Australia has a lot of sea coast to defend, and as the Pacific Ocean is massive, having long range submarines give them certain competitive military advantages.

The deal also shows how important it is for Biden administration to counter the Chinese threat especially in the South China Sea, even if it means ruffling feathers with a major ally in Europe such as France. China's military fleet, has more than doubled since 2015, making it the largest naval force on the planet.

United States does not claim any part of the South China Sea, but has promoted the freedom of navigation by air and across the waterway, which Washington accuses Beijing of militarising. China, on the other hand, believes that stances of US are severely damaging regional peace and stability, intensifying an arms race, and also harming international nuclear non-proliferation efforts. For them, the Western allies are shooting themselves in the foot. Although, there seems to be a low chance of military conflict arising in the sea, even with the new developments emerging.

There has been a speculation inside the military circles that the transition to a new nuclear submarine program was initially been overseen by Retired US Vice Admiral William Hilarides, who chairs the federal government's Naval Shipbuilding Expert Advisory Panel.

The London-based policy think tank Chatham House commented that the broken deal will affect thousands of workers in France's defence industry. More importantly, the institute said, Australia's new deal with the U.K. and U.S. has left France ‘seemingly alone on the strategic landscape’. That’s why the balance of power has become more contested now.