CANBERRA: Australia said Saturday it was noting with regret France's recall of its ambassador over the surprise cancellation of a submarine contract in favour of a US deal.
France recalled its ambassadors to Australia and the United States on Friday in an unprecedented show of anger over a deal among the United States, Australia and Britain to provide Australia with a fleet of at least eight nuclear-power submarines.
The deal scraps a 90 billion Australian dollar (USD 66 billion) contract with French majority state-owned Naval Group, signed in 2016, to build 12 conventional diesel-electric submarines.
Foreign Minister Marise Payne's office said in a statement: "We note with regret France's decision to recall its Ambassador to Australia for consultations following the decision on the Attack Class project."
"Australia understands France's deep disappointment with our decision, which was taken in accordance with our clear and communicated national security interests," the statement said.
It added that Australia valued its relationship to France and looked forward to future engagements together.
Payne and Defence Minister Peter Dutton are currently in the United States for annual talks with their US counterparts and their first with President Joe Biden's administration.
French Ambassador to Australia Jean-Pierre Thebault said Australia never mentioned that the project could be scrapped.
Thebault told Australian Broadcasting Corp. in an interview recorded on Friday that he found out about the U.S. submarine deal: "Like everybody, thanks to the Australian press."
"We never were informed about any substantial changes," Thebault said.
"There were many opportunities and many channels. Never was such a change mentioned."
After the US deal was made public this week, Prime Minister Scott Morrison said he told French President Emanuel Macron in June that there were "very real issues about whether a conventional submarine capability" would address Australia's strategic security needs in the Indo-Pacific.
Morrison was in Paris on his way home from a Group of Seven nations summit in Britain where he had talks with soon-to-be-alliance partners Biden and British Prime Minister Boris Johnson.
Thebault said he had also been at the meeting with Macron and Morrison.
Morrison mentioned "there were changes in the regional situation," but gave no indication that Australia was considering changing to nuclear propulsion, Thebault said.
"The relationship between France and Australia was built on trust," Thebault said.
"So fundamentally, everything was built on trust. Everything was supposed to be done in full transparency between the two partners," he added.
Thebault said difficulties the project had encountered were normal for its scale and large transfers of technologies.
French Foreign Minister Jean-Yves Le Drian said in a statement on Friday that recalling the two ambassadors, on request from Macron, "is justified by the exceptional seriousness of the announcements" made by Australia and the United States.
Le Drian said Australia's decision to scrap the submarine purchase in favor of nuclear subs built with U.S. technology is "unacceptable behavior between allies and partners."
Senior opposition lawmaker Mark Dreyfus called on the Australian government to fix its relationship with France.
"The impact on our relationship with France is a concern, particularly as a country with important interests in our region," Dreyfus said.
"The French were blindsided by this decision and Mr. Morrison should have done much more to protect the relationship. The government needs to explain what it is going to do to fix this important relationship," he added.