Australia's ditching of a $90billion French submarine deal could derail a potential free trade agreement with the European Union.
France is outraged at Prime Minister Scott Morrison's termination of a plan for the Naval Group to build 12 diesel-powered Attack-class submarines by the mid-2030s.
Australia last week announced a new pact with the US and the UK, known as AUKUS, to produce nuclear-powered submarines within two decades in response to China's rise in the Pacific.
The US is sharing its nuclear technology with a new nation for the first time since 1958 when it formed a defence alliance with the UK
European Commission President Ursula von der Leyen has weighed in to express her outrage at Australia terminating a 2016 arrangement for France to build diesel submarines in Adelaide.
Australia's ditching of a $90billion French submarine deal could derail a potential free trade deal with the European Union (pictured is a submarine designed by the French Naval Group)
'There are a lot of open questions that have to be answered,' she told CNN in New York.
'One of our member states has been treated in a way that is not acceptable.'
France's Europe minister Clément Beaune said Paris could scuttle further progress on an EU-Australia trade deal.
'Keeping one's word is the condition of trust between democracies and between allies,' he told Politico.
'So it is unthinkable to move forward on trade negotiations as if nothing had happened with a country in which we no longer trust.'
Australia has since June 2018 been in negotiations with the EU to devise a free trade deal.
During the 2019-20 financial year, Australia's two-way trade with the EU was worth $78.7billion, Department of
