The AUKUS Deal

Australia backed out of a $66 billion submarine contract with France this month, opting instead to collaborate with the United States and the United Kingdom. France's ambassadors to the United States and Australia were recalled in protest.

In 2036, the Australian Navy's six Collins-class submarines will reach the end of their operational life. In 2016, France was chosen over Germany and Japan to assist Australia in the replacement of 12 ageing diesel-electric submarines. The Future Submarine project was dubbed the "biggest and most complex defence acquisition in Australian history" by the Australian government at the time. That was five years ago, though. And tensions are rising in the Indo-Pacific area, which stretches from America's west coast to Australia and India's shoreline. China's military and political interests in the region have expanded, as has its naval fleet, which has more than doubled in size since 2015, making it the world's largest. As a result, Australia has stated that it needs assistance that France will not be able to provide.

Australia stated that it would join the United States and the United Kingdom in AUKUS, a trilateral security collaboration that prioritises the building of nuclear submarines for Australia. The Australian Department of Defense will form a task force over the next 18 months to guide the coalition's goal of being a "reliable steward" of nuclear technology.

However, pulling out of the agreement has left France feeling cheated as well as leading to a major financial setback. Thousands of jobs in France's defence industry will be affected, according to Chatham House, a London-based policy think tank. Australia's new pact with the United Kingdom and the United States has left France isolated on the strategic landscape. The goal for France was to build a relationship with the largest nation in the South Pacific, one that would have resulted in a close and long-term agreement for the next half-century, bolstering France's diplomatic and military network in a key region.

Since 1945, the United States has overseen and supervised Oceania. It has a network of military outposts around the region, as well as its own territory, long-standing political ties, and even its own state — Hawaii.

China has significantly sharpened its expansionist stance in the Pacific, taking advantage of a relative drop in US participation in the region during the Obama administration (while Joe Biden was vice president), prompting a US turnaround over the previous three years. The US wanted Australia to cancel its deal with France and replace it with one with Washington, assuring American control over a submarine fleet that they will virtually build themselves.

While the cancellation of the Australian contract with Naval Group was harsh, it was not entirely unexpected given Australia's long history with the United States, especially considering Australia’s repeated expressions of discontent to Paris. In fact, France's view of a reversal of Australia's strategy is erroneous. AUKUS is a well-thought-out decision for Australia, in keeping with the country's 200-year diplomatic heritage. It does not, however, imply that it is a wise or safe decision.

The notion of "great and powerful friends" characterizes Australian diplomacy. Until 1942, when the Australian parliament adopted the Statute of Westminster, Australia's diplomatic decisions were mostly made by or in partnership with London. Since 1945, these decisions have been made with a little more independence, albeit frequently in agreement with Washington. In Korea, Vietnam, Iraq – in 1990 and again in 2003 – and Afghanistan, Australia accompanied the United States. These small contingents have allowed the US to hide its actions by posing as members of multinational coalitions.

The military and diplomatic project between France and Australia revealed a misunderstanding of what the Australians consider to be the most important issues in the Indo-Pacific. France wants to keep the peace in the region, whereas Australia, rightly or not, believes that a war between China and Taiwan – and hence between China and the United States, which Australia would support – is a distinct possibility.

The new AUKUS pact appears to have been in the works for the past six months, according to recent sources, with the Australians talking to the British, the British talking to the Americans, and the three countries then deciding to take a fresh look at the issues at hand. As a result, Australia terminated its contract with France and stated that it would begin talks on a new deal with the United States.

The AUKUS declaration occurred right before the EU's own Indo-Pacific policy was to be announced. The US is undercutting European efforts in the region, according to the European narrative, and the fact that Britain, which has walked out of the EU, is involved adds a layer of complication. Some Europeans believe the US is untrustworthy — the current scenario has arisen soon after the catastrophic American pullout from Afghanistan — and that Europe must act independently.

What implications does this have on India?

The French have cancelled a trilateral dialogue conference of foreign ministers scheduled for New York on the sidelines of the United Nations General Assembly. There will be a setback in the near future. However, India's relations with the United States, the United Kingdom, and Australia have significantly improved in the recent five years. France has also played an essential role for India, and there is a high level of trust in France in New Delhi.

India is preparing to buy more submarines, with some arguing that nuclear submarines are preferable to conventional submarines since India faces the same dilemma as Australia in terms of the Chinese navy approaching close.

Because France is already a resident power in the Indian Ocean, and India has an interest and stake in maintaining it there. India is also a member of the QUAD which allows them to collaborate with the Americans, British, and Australians. The submarine issue could provide an important opportunity for India and France to reconsider what else they can accomplish jointly in the Indian Ocean.