Aukus: How transatlantic allies turned on each other over China’s Indo-Pacific threat

The meeting between the leaders of the US, UK and Australia on the fringes of the G7 summit on June 12 seemed innocuous enough — the resulting four-sentence communique, vowing to “deepen” co-operation in the Indo-Pacific, a footnote to the celebration of western entente after Donald Trump’s exit from the White House.

More consequential for the French delegation was Emmanuel Macron’s first bilateral meeting with Joe Biden that day, before an evening beach barbecue at Cornwall’s Carbis Bay. “The US is back,” Biden told reporters as he sat next to the French president. “Leadership is partnership,” Macron noted.

Paris’s assessment about what happened in England could not have been more wrong — nor its sense of betrayal more intense when it discovered last week that Biden, Boris Johnson and Scott Morrison had in fact given a fresh impetus to a strategic alliance that would reshape security in Asia to contain China’s rising military aims. The pact would rip up a French-led $36bn contract to build 12 diesel-powered submarines for Australia and undercut Macron’s ambitions in the Indo-Pacific.

France’s ensuing diplomatic fury — it recalled ambassadors from Washington and Canberra, and pushed to postpone a key EU-US trade meeting — has opened the biggest rift among western allies since the US-led invasion of Iraq in 2003. On Wednesday, after talking to Macron, Biden appeared to concede that France had been ill-treated. He agreed to meet the French president in Europe next month to reset relations. Even so, the feud is likely to deepen growing doubt in Europe over the US’s reliability as an ally amid Washington’s foreign policy shift to Asia.

The so-called Aukus alliance signals to Europe that “it is not perceived as a global player with whom the United States will gain [from a deeper] co-operation, at least in the Indo-Pacific,” said Marie Jourdain, visiting fellow at the Atlantic Council and former French defence official. This decision and the transatlantic row raised the question of “the European allies’ importance for the United States regarding competition with China and Russia”, she added.

Canberra has doubts but Paris keeps the faith

Australian officials said Paris had ignored signs that the contract was in trouble, including when Pierre-Eric Pommellet, the head of French submarine builder Naval Group, landed in Adelaide in February to headlines that Morrison had ordered a review of the Barracuda deal signed in 2016.

Pommellet had hoped to move the contract along the “detailed design” phase to unlock a big payment. But he returned home empty-handed.

In reality, Canberra had been looking to back out of the French contract for months, Australian officials said. Morrison had concerns about its cost and the slow progress in creating local jobs and transferring technology. In January 2020, the country’s auditor-general revealed in a report that the defence expert advisory committee had urged the government to explore an alternative to the French submarines as early as 2018.

There were leaks in the Australian media about government discontent. In Paris, inquiries about what looked like an “active smear campaign” in the press against the deal were met with reassurance from Australian counterparts, a French official involved in the talks said. The French view was that cost overruns and delays were to be expected in such a big defence contract.

Many of Pommellet’s interlocutors were not themselves in the know about the secret plan B, an Australian defence official said. But France also failed to grasp the implications of Australia’s increasing worries over China’s military might in the Indo-Pacific.

Canberra had come to the conclusion that diesel-powered submarines — which it had requested in the initial tender — were no longer the best way to keep Beijing at bay. The French had their own nuclear propulsion technology; in June, they even asked Canberra whether it wanted to shift to nuclear, according to Paris diplomats.

Pierre-Eric Pommellet returned home from Australia empty-handed © Fred Tanneau/AFP/Getty

The US propulsion technology is one of the “crown jewels of the American military” because it allows submarines to be stealthy when submerged and helps evade sonar detection, said Thomas Shugart, former US commander of a nuclear-powered submarine and now at the Center for a New American Security. (The French insist that their diesel-fuelled water pump jet technology is actually quieter than reactors’ permanently running cooling systems.)

But beyond the technological debate, the Morrison government had decided to cement a broader alliance with the US. Canberra had reckoned the Trump administration would never share its technology. The installation of Biden in the White House provided a new opportunity, an Australian defence official said. In early 2021, Morrison set up a small cabinet committee, which he chaired, to explore a US deal — one in which the UK was to play a role.

BoJo and ScoMo hatch a plan B

Jean-Yves Le Drian, France’s foreign minister, later dismissed the British role in the Aukus pact as akin to being “the fifth wheel on a carriage”. But Canberra saw Britain, which has shared nuclear technology with the US since 1958, as a potential intermediary to help Australia secure Washington’s technology.

One morning in March, British navy officers Tony Radakin and Nick Hine were filled in on the plan for the first time by Australian defence and military officials during a video call in London.

It seemed far-fetched that this call would initiate a pact uniting the US, Britain and Australia as allies against China in the Pacific. The news that the Australians hoped to switch from conventional to nuclear-powered submarines was a “huge leap”, a UK defence official said.

“The UK was well placed, from its own experience, to explain what technology-sharing arrangements would be acceptable to the American nuclear establishment,” Malcolm Chalmers, research director at London’s Royal United Services Institute, said. “It’s a big step for a complex that is highly sensitive about security leaks.”

After Canberra and London took the proposal to Washington, representatives from the three countries intensified work, a senior US official said. The personal relationship between Morrison and Johnson — two populist conservative politicians — came into play, according to British and Australian people involved in the talks. Johnson made a point of putting “ScoMo” on the guest list for his G7 summit in Cornwall.

The US judged that informing Paris was Canberra’s job. But Australian officials say it was not in their interest to alert Paris; keeping the French deal alive heaped pressure on Biden to agree a deal that would bring huge industrial rewards to the US.

mmanuel Macron, second left, and Australian prime minister Malcolm Turnbull, centre, on the deck of HMAS Waller, a Collins-class submarine operated by the Royal Australian Navy, at Garden Island in Sydney in May 2018
Emmanuel Macron, second left, and former Australian prime minister Malcolm Turnbull, centre, on the deck of HMAS Waller, a Collins-class submarine operated by the Royal Australian Navy, in Sydney in May 2018 © Brendan Esposito/AFP/Getty

France knows something’s afoot but is left in the dark

Meanwhile, Paris was starting to fret. It turned to Washington for clarification — US company Lockheed Martin was due to be part of the contract. Through June and July, Macron’s diplomatic adviser Emmanuel Bonne, defence minister Florence Parly and Le Drian separately expressed worries over the contract to their US counterparts, according to officials briefed on the talks.

Their interlocutors were mute or claimed not to know. On September 10, Le Drian and Parly each requested to speak with their US counterparts, Antony Blinken and Lloyd Austin. No calls took place until after the Aukus agreement was announced on September 15 (paving the way to a more formal 18 month-consultation phase). The pact was confirmed in the morning by Biden’s national security adviser Jake Sullivan to French ambassador Philippe Etienne, who had requested an emergency meeting at the White House. “A stab in the back”, Le Drian commented on French radio the following day.

“It’s a pretty serious crisis between France and the US. The presidents and ministers have discussed it, and that’s good — but trust is not yet restored and that will take time,” said Maya Kandel, director of the US programme at France’s Institut Montaigne.

Joe Biden with Scott Morrison, left, and Boris Johnson announcing the agreement on September 15 © Oliver Contreras/Pool/EPA/Shutterstock

Johnson’s inner circle said they had thought through the consequences for the Macron relationship of pursuing the Aukus idea — dubbed “Operation Hookless” in London. “There was a bigger prize at stake,” they said.

But some British diplomats say Johnson underestimated the implications for London’s long-term relations with its European neighbour and defence partner. “A number of people have woken up to the fact they have caused quite serious damage to the relationship with France,” said Sir Peter Ricketts, former UK ambassador to France. “You can’t fix this in the short term. This is one of those occasions when the French remember.”

After meeting Biden in the Oval Office on Tuesday, Johnson brushed off the row with Macron, saying “Donnez-moi un break”. That evening at the Australian embassy in Washington, the crisis with France was “extensively” discussed, according to someone in attendance. But the overriding mood was celebratory. At the end of the meal — courgette flowers stuffed with goats cheese and Wagyu beef with polenta — Johnson and Morrison signed each other’s menus.

Additional reporting by Sebastian Payne in London and Anna Gross in Paris

Australia’s submarine saga

April 2016

France’s DCNS is selected as the preferred bidder to build conventional submarines for the Royal Australian Navy, seeing off competition from Japanese and German rivals. Under the A$50bn (US$36bn) deal, the company, which later changed its name to Naval Group, agreed to build 12 Shortfin Barracuda submarines and help maintain them over a 50-year period.

February 2019

After long delays, Naval Group signs a strategic partnership agreement with Australia for delivery of the submarines. Negotiations over the ownership of technology and the shape of the industrial partnership were only resolved after talks between French president Emmanuel Macron and Australia’s prime minister Scott Morrison on the sidelines of a G20 meeting.

October 2019

Australia reassesses its defence strategy and military capabilities, saying it had underestimated the speed of change in the region. Australia’s defence minister says the Indo-Pacific region is at the centre of the most fundamental geopolitical change since the second world war and the nation’s defence forces needed to adapt to meet the challenges.

January 2021

Chinese military aircraft simulated missile attacks on a US aircraft carrier during an incursion into Taiwan’s air defence zone, according to intelligence from the US and its allies.

September 2021

Australia cancels the deal with Naval Group and says it will instead procure at least eight nuclear-powered submarines as part of a pact with the UK and US.

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