November 17, 2015

Australia to have "2 + 2" Talks with Japan and Germany, but not with France (so far)

Australian Prime Minister Turnbull meets German Chancellor Merkel. From left, Australian Finance Minister Senator Mathias Cormann, German State Minister (in Foreign Office) Maria Boehmer, Prime Minister Turnbull, German Chancellor Merkel, Lucy Turnbull and German politician Volkmar Klein (Photo courtesy AFRweekend)
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Turnbull and Merkel share a joke during Turnbull's mid Nobember 2015 visit to Berlin.
(Photo courtesy News(dot)com(dot)au
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Cutaway of a TKMS-HDW Type 216. The 216 is likely the submarine Germany is offering in the Australian future submarine CEP. (Diagram courtesy Submarine Dossier )
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Readers may recall Submarine Matter’s article Japan's Submarine Sales Advantage, 2 + 2 Talks With Australia of November 1, 2015 where I wrote:

“Japan and Australia sharing the same region gives Japan an important advantage over the French and German competition for the Future Australian submarine sale. The annual "2 + 2" talks between Japan and Australia cement the ongoing defence relationship

Now a pivotal article from The Australian reveals that when Australia’s Prime Minister Turnbull met Chancellor Merkel, in Berlin last week, Australia also negotiated Defence Minister and Foreign Minister “2 + 2” talks with Germany.

This development is of major significance if Australia does not negotiate equivalent 2 + 2 talks with France during the life of the Australian future submarine Competitive Evaluation Process (CEP). The CEP may extend into late 2016 until a winner is picked or at least one contender is eliminated. As Australia now has 2 + 2 arrangements with Japan and now with Germany this may (or may not) be an indicator that France may be eliminated.

The following are some excerpts of an article (some parts I’ve bolded for emphasis) that political correspondent David Crowe for THE AUSTRALIAN, November 14, 2015, reported http://www.theaustralian.com.au/national-affairs/foreign-affairs/malcolm-turnbull-to-boost-ties-with-germany/story-fn59nm2j-1227608547216?sv=6e64b912efb1461e9d64f63d4d525c6a

“Malcolm Turnbull to boost ties with Germany”
“Australia will create a new defence and foreign affairs compact with Germany under a deal between Malcolm Turnbull and his counterpart, Angela Merkel, that dramatically broadens a $17 billion economic relationship, with an eye to huge export growth as well.

In the Prime Minister’s first major foreign policy initiative, the two countries will set up a new strategic partnership including annual summits of defence and foreign ministers and a joint effort to combat terrorism.

…The agreement spans defence, trade and economic policies to act upon a high-level report from an advisory group including [Australian] Finance Minister Mathias Cormann [originally from Belgium and speaks German fluently] and more than a dozen prominent individuals from both countries.

…A key finding of the report, obtained by The Weekend Australian, is that the two nations should start a “2 plus 2” strategic dialogue between defence and foreign ministers along the lines already in place with Britain.

This is being put in place and is the first agreement of its kind between Australia and any ­nation in continental Europe.

Government figures said the breakthrough agreement reflected an elevation in the Germany relationship, recognising it has been the “odd one out” when Australia had “2 plus 2” co-operation with the US, Japan and China, as well as Britain.

…The stronger defence ties are a boost for Germany in its bid to help build the next fleet of Australian submarines, a delicate political issue in South Australia with competition from Japan and France to do the work..."


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Wording in DFAT Briefs Significant?

Along the lines of a "2 + 2" - within the Australian Department of Foreign Affairs and Trade (DFAT) Brief on relations with Germany "the establishment of a high-level strategic dialogue involving foreign and defence ministers" is mentioned under "Significant recent developments". 

I didn't see the same sought of wording in the DFAT brief for France.

Pete

10 comments:

MHalblaub said...

Dear Pete,

such a military deal is linked to a variety of other deals. So the Australian government may also looks at other important issues. Germany has a 50 % higher GDP than France and so more trade options. Also is DCNS a different partner compared to Thyssen-Krupp of which TKMS is only a small part.

To open new markets a German submarine would be the best option.

Regards,
MHalblaub

Anonymous said...

Hi Pete & MHalblaub

Japan will respect decision of Australia for better or worse. Australia requested Japan to transfer submarine technology. Japan initially hesitated to transfer, but decided to behave as a best friend of Australia. Now situation has changed. Australia can open new market with Germany, but, please do not use secret information on Japanese submarine which Australia got in CEP. I hope Australia behave as a gentleman.

Regards
S

Peter Coates said...

Hi MHalblaub

It is true that the defence relationships, including talks, will have an arms sales aspect. I never realised the German GDP was 50% higher than France's. East-West German unification must have major population-GDP significance.

Regards

Pete

Peter Coates said...

Hi S

Unfortunately for the three CEP contenders they will probably have to wait a long time into 2016 before a winner is chosen. Australia would, of course, be under strict non-disclosure rules governing contender's information for the CEP.

Japan, like DCNS and TKMS, can reduce the risk of Australia spreading their information but not giving the most sensitive information to Australia in the first place (eg. Australia may not need to know eveything about NS110 or the latest Snorkel advances).

One measure relevant to a countries honesty in keeping its word is compartive corruption perceptions indexes. See
https://en.wikipedia.org/wiki/Corruption_Perceptions_Index Australia ranks as very non-corrupt - that is honest.

Regards

Pete

Anonymous said...

Germany GDP is only 32-35% larger than France based on 2014 numbers. Even the UK GDP has surpassed France in 2014

Anonymous said...

Hi Pete

If Australia is considering export of submarine technology, she should inform Japan about this as soon as possible. Not only CEP but also post-CEP is very important. Australia should think post-CEP situation including maintenance of relation with Japan.

Regards
S

Anonymous said...

Germany 2013 GDP $3.7 billions, France $2.8 billions (google) that's not 50% higher?
Which trade options?

If you choose a submarine based on "trade options" so maybe it's better for Australia to chose a chinese submarine?

With INS Kalvari sea trials last month, DCNS shows it capacity to build submarines outside France.

Regards
HD

Peter Coates said...

Hi Anonymous [at Nov 19, 4:29AM]

I'll leave it to you guys to debate the mathematics.

For this blog the quality of a countries large SSKs and terms of a deal are most important.

Regards

Pete

Peter Coates said...

Hi S [at Nov 19, 5:18AM]

I've heard nothing about an AUSTRALIAN INTENTION to export or re-export submarine technology.

It seems just sales sweeteners from TKMS and DCNS that if Australia buys their subs these companies will set up regional maintenance hubs (maybe including spare parts) in Adelaide.

Naturally Japan has not suggested it because Australia is the only possible Japanese sub customer. So all these basically impracticle sales sweetener promises apply to DCNS and TKMS not Japan.

I think it was in the Adelaide Advertiser, around Nov 17, 2015 where:

"The head of the Royal Australian Future Submarine program, Rear Admiral Greg Sammut, said the priority was to build submarines for the Australian fleet, not for export.
“Export is not a requirement of the competitive evaluation process... it’s about a regionally superior submarine with sovereign capability.”"

Regards

Pete

Peter Coates said...

Hi HD [at Nov 19, 6:59AM]

Thanks for "Germany 2013 GDP $3.7 billions, France $2.8 billions (google) that's not 50% higher?
Which trade options?"

I think this is US$3.7 TRILLION etc see United Nations list at https://en.wikipedia.org/wiki/List_of_countries_by_GDP_(nominal)#Lists

Australia, of course, will buy no weapons from China or Russia for may reasons including lower quality and Aus's alliance with the US.

Yes DCNS and TKMS have much useful experience organising foreign builds.

I imagine for India's submarine acquisition Project-75(I) TKMS and DCNS have also offered the "maintenance hub" status as a sweetener to India as well?

Regards

Pete