Wednesday 15 September 2021 was a thunderclap in Paris. The announcement of the breakdown of the ‘contract of the century’ between France and Australia led to a plethora of personalities of all kinds taking to the media to denounce the ‘stab in the back’, the ‘betrayal’ and other similar Shakespearean statements. This event is an ‘accident’ on the road to a deeper game-changer: the AUKUS strategic-military agreement, which we believe owes much more to Johnson’s England than to Biden’s America.
This episode is an opportunity for us to come back to an anticipation formulated in our June 2021 bulletin:
“A far more fundamental systemic rivalry will soon become evident: that between the UK and China. […] Both countries [the UK and China] are in the same cycle of global expansionism and profound systems transformation. But while other countries are also pursuing this ambition, few are as advanced and as well grounded. [But what is impressive is the speed at which the UK is moving forward. As we saw two months ago, in the ultra-competitive post-Covid world, speed of action is vital. And, for the past five years, Britain has been racking up key strategic agreements.
AUKUS: a diplomatic victory for the UK
The British agility that we observed at the time is seen here in the exploitation of the grievance between Australia and the Naval Group. Accused of delays, extra costs, persisting in wanting to carry out larger and larger portions of the work in France when the contract stipulated that 90% of the work was to be carried out in Australia, the Naval Group also came under fire for a security breach in its Indian contract. The cancellation of the French part of the contract is hardly surprising, especially as the software part was carried out by Lockheed, the American defense giant, while Naval Group was mainly responsible for the hardware. The delay (delivery in 2050 as opposed to the original 2030) meant that the conventional propulsion no longer met expectations, even though Australia had given its agreement. Canberra did not see the point of having easily detectable conventional submarines to patrol its territorial waters and protect strategic submarine cables, which are fundamental for internet and 5G connections.
It would therefore seem that the Australian government approached the Biden administration during the G7 meeting in Cornwall to discuss an exit from this agreement, which was then considered disastrous. With China now the new priority in Washington, the US was only too happy to sell the submarines itself, as Lockheed was already the supplier of the combat system.
This is where British diplomacy, already anticipated by the GEAB, comes in: as part of the Global Britain policy, Boris Johnson is said to have gone out of his way to convince his Australian counterpart to use British industry. The argument was that given the proximity of British and Australian military protocols, the UK was ideally placed to replace France.
But there is much more to this deal than just the sale of submarines. As the contract changed hands, a new platform for cooperation in defence, intelligence and cyber security was announced under the acronym AUKUS (Australia, UK and US). For the United States, this arrangement complements the more diplomatic Quad, which brings together Japan, India, the United States and Australia. The alliance of the Anglo-Saxon intelligence services 5 Eyes should also be noted. It is possible to see a certain return to the containment strategy that was used by the United States against the USSR. This time it is directed against China. Of course, it must be qualified: on the one hand, the Chinese and American economies are much more interdependent than those of the two blocs during the Cold War. Moreover, China has developed partnerships with a much greater economic and financial scope. These organisations enshrined in the Australia agreement are indeed much more significant in scope.
Aukus is effectively a system of defence, cyber security and intelligence cooperation between the US, UK and Australia. It is intended as a response to China’s growing inflexibility. However, the alliance risks reigniting an arms race in a region that is both sensitive and vital to the global economy.
The submarine deal is therefore a victory for the UK. It is a victory for British industry, which has won a lucrative contract, but also for its armies, which have been able to replace the United States as supplier of the submarines. It is not only a victory for British industry, which has won a lucrative contract, but also for its armies, which have gained a stronger alliance, and its intelligence services, a new partnership.
The reactivation of the old British networks is in line with the GEAB’s anticipation of the UK’s ability to garner strategic alliances and partnerships. Moreover, if submarine cables are now back at the heart of strategic thinking, the United Kingdom can count on its old naval tradition. Indeed, the defence of submarine cables has been a priority for the British Navy since the 19th century. There are indeed established habits and patterns of thought in dealing with this type of strategy.
AUKUS, a strategy of desperation?
On the domestic front, the British economy is suffering from various setbacks. The 2008 crisis has weakened the City, while the Covid crisis will weigh on public spending for years to come. Shortages of consumer goods, petrol and staff continue. Finally, internal dissension within the Conservative Party is tainting the AUKUS. Indeed, Theresa May made a remarkable speech fearing that this broad agreement would lead to an arms race and too much anger from China.
Externally, there is dissension, particularly between the US and the UK. On the one hand, Washington is facing its own financial difficulties over the debt. Moreover, Nancy Pelosi has already begun to criticise London for its Irish policy, accusing it of making the situation there worse. Finally, if the United Kingdom tries to reposition itself quickly, it is not certain that it will be able to exist outside the American orbit, which is less and less focused on Europe. There is already dissension between the 5 Eyes countries on the attitude to be used towards China. Both the United States and the United Kingdom seem to be playing it safe in a context where they are fragile.
The situation in France, on the other hand, seems to be less precarious than one might think. It is true that President Macron has suffered a diplomatic setback in Australia. But the Naval Group has managed to conclude a new contract in Greece. This could be a sign of France’s strengthened position in the EU.
Perhaps we should look at why the government chose to highlight the submarine episode. The idea is probably to use its future presidency to accelerate the tempo and obtain some diplomatic advances in Europe. Moreover, France has several naval bases from Djibouti to Papeete, and is quite capable of imposing itself as a privileged partner. This kind of relay is rare, and President Biden will have to see the value of going easy on his French ally. Scott Morrison was also supposed to manage his relationship with his French interlocutors better. The French reaction created a real embarrassment and it is not impossible that Paris will get compensation.
French territories are on virtually every Australian trade route, and Canberra should start to feel it. The real problem for France, however, would be the outcome of the latest referendum on New Caledonian independence. If the archipelago chooses to remain in the French fold, France could choose to develop its base at Pointe Chaleix. However, defeat would be a new thorn in the side of France and Australia as China deploys a chequebook diplomacy in this region that would be hard to counter. This Australian choice to weaken France could do Beijing’s business, which AUKUS is supposed to counteract.
Ultimately, the UK’s repositioning following Brexit deserves careful study. Paris will find itself in a unique position of strength in 2022 with the presidency of the European Union. It will have to use all of its diplomatic weight to convince its European partners to move forward on many issues. In the next GEAB, we will propose elements of reflection on the various issues of the French presidency of the Union, its method and its substance.