Australia formally signed a A$50 billion (US$35 billion) “strategic partnership” with France to build 12 state of the art submarines on Monday, a signal of Canberra’s willingness to project power across the Pacific. Prime Minister Scott Morrison hailed the “very audacious plan” at a ceremony in Canberra as “part of Australia’s biggest ever peacetime investment in defence”. The partnership’s main pillar is a contract for France’s Naval Group – a consortium with state backing – to build 12 attack-class submarines and has been years in the making. At roughly US$35 billion, this is Australia’s largest defence procurement project and the largest foreign sales deal by French shipbuilder Naval Group. The first submarine is expected to be finished in the early 2030s, starting with sea trials around the first quarter of 2031 and operational testing in late 2032. Beijing causing anxiety in South China Sea: Australian defence minister Critics say that is too late: the waters to Australia’s north and east are the scene of an intense struggle between the United States, China and regional powers, who are all vying for influence. Beijing has made territorial claims to much of the South China Sea – a marine thoroughfare that is vital to maintain the supply of ores, minerals and crude that fuel the Chinese economy. It takes a lot of confidence for Australia to bet on France Florence Parly, French Armed Forces Minister Washington fears that China is becoming increasingly assertive over those claims to display its dominance over smaller Asian nations and become the prime regional power. Australian military analysts hope the subs will allow the country to maintain a credible deterrent against possible hostile actions. “Of course the government can’t say it’s about China; it has to be country-blind, but China is the only country with the capability that could conceivably threaten Australia in a high-intensity conflict and therefore I think, yes, it is fundamentally about deterring China,” said Euan Graham, executive director of La Trobe Asia in Melbourne. Graham said that France had the advantage of being the only bidder that could produce nuclear submarines, which unlike their diesel and electric counterparts have virtually unlimited range. “I think that is an unspoken advantage that if there is a further deterioration in Australia’s circumstances, then mid-life through the submarine programme the decision may be taken to switch to nuclear propulsion and the French offer the best transition path from conventional propulsion to nuclear propulsion,” he said. Aiming to curb China’s influence, Australian PM agrees to kava imports from Pacific nations “Australia is a long way from everywhere, and that of course, is a good thing in some senses, but if it needs to react then it takes a week to get even up to the closest operating area in Southeast Asia, and that of course comes at the cost of fuel,” said Graham. Visiting French Armed Forces Minister Florence Parly co-signed the agreement in a ceremony that took place in the shadow of a memorial to US forces in front of the Australian defence offices in Canberra. “It takes a lot of confidence for Australia to bet on France and a lot of confidence for France to share with Australia the capability that is so close to the core of our sovereignty and our strategic autonomy and a result of immense investment over decades,” Parly said. Under the Strategic Partnership Agreement, 12 conventionally powered submarines derived from the Naval Group Barracuda nuclear design will be constructed in a new shipyard in South Australia. Parly hailed the agreement, which was negotiated and drafted entirely in English, as a long-term partnership between Australia and France and dismissed some “whining about the lengths of the negotiations”. “Behind those masses of dark steel, behind those eyeless beasts” there was friendship and a common attachment to multilateralism and the rules-based order, she said. Naval Group chairman Herve Guillou said Australia chose the French submarine design because of its endurance, long range and acoustic superiority. We are looking at a very, very long-term partnership with Australia Herve Guillou, Naval Group chairman “We are bidding in the Netherlands today. That is one really important bid because they are looking as well for expeditionary submarines,” he said, hoping the Australia contract would serve as a launch pad for contracts in other countries including India, Poland and Brazil. Guillou confirmed the first Australian submarine should be sailing in the early 2030s, the last in the early 2040s with the last decommissioned probably in the early 2080s. “We are looking at a very, very long-term partnership with Australia,” he said. The agreement comprises two thick volumes with 23 schedules, with two more schedules to be added later. It sets conditions on what intellectual property Australia has access to and which it owns, and covers a range of provisions for contract termination or missed deadlines. Guillou also said an alliance with Italian shipbuilder Fincantieri would permit the two companies to team up on research, development and procurement for some common projects, either bilateral or for export. “If we look at the change in the market, we need European players to unite more strongly to be able to face the new giants in this market, like CSCC in China, like OSK in Russia,” he said. “We really want to take the initiative of being stronger before the others are stronger.” Additional reporting by John Power