Australian Prime Minister Scott Morrison said on Tuesday he will not speak with the French president at the United Nations this week even though French anger over cancellation of a $40 billion defence contract could threaten an Australian-EU trade deal.

Australia last week scrapped a deal with France’s Naval Group to build a fleet of conventional submarines and will instead build at least eight nuclear-powered submarines with U.S. and British technology after striking a trilateral security partnership with those two countries.

The cancellation of the deal has angered France, which accused both Australia and the United States of stabbing it in the back, and it recalled its ambassadors from both Canberra and Washington.

While U.S. President Joe Biden has sought to speak to French President Emmanuel Macron to ease tension, Morrison said he would not hold a separate bilateral meeting with the French leader.

“There is not an opportunity for that at this time. I’m sure that opportunity will come in time,” Morrison told reporters in New York when asked if he would speak to Macron on the sidelines of the United Nations General Assembly.

European Union countries expressed solidarity with France on Monday in a show of unity seen as threatening Australia’s bid for a free trade deal with the bloc.

Australia and the EU are set to hold the next round of talks on a trade deal on Oct 12.

Australian Minister for Trade Dan Tehan on Monday said he expected those talks to go ahead as scheduled despite the French disappointment.

Morrison will meet Biden and European leaders on the sidelines of the United Nations General Assembly in New York before travelling to Washington for a meeting of the Quad group of countries – India, Japan, the United States and Australia – later this week

Reuters