The choice of France to build 12 submarines under a $50 billion contract begins a new era in Australia's strategic relationship with that country, its longstanding partner within the western alliance and close collaborator in the South Pacific. 

Signing France on to the submarine construction is far more than a commercial contract. The French State owns 63% outright of the French company DCNS, that has emerged as the successful bidder for the project, and has a 26% stake in another shareholder, Thales, which controls 35% of DCNS.

Certainly the French see the contract as more than a commercial deal. French Defence Minister Drian said as much when he visited Adelaide in late February. In private comments to me yesterday, one senior French official noted with some emotion the timing of advice of the granting of the contract, on Anzac Day in the French capital, underlining the poignant historic foundations of the renewed Australian-French relationship that rests on the shared sacrifice of the past. Another has spoken of the news as a bright spot in a particularly morose period for the French, reeling from the terrorist attacks on its capital last year and so recently on Brussels. A little-reported consequence has been the major disruption to the tourism on which the French economy depends.

I have written previously of the importance of ratcheting upwards our defence engagement with our closest neighbour in the Pacific off the coast of Queensland. I have also separately laid out the increasingly complex geostrategic environment for France (and indeed for us) in the South Pacific, highlighting the critical importance for France’s acceptance in the region of its fully implementing the spirit and letter of agreements over an independence referendum in New Caledonia by 2018.

Apart from the technical merits of Australia’s decision about this major defence contract, it will pave the way for renewed collaboration and sharing of regional responsibilities with a valued partner.

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