WASHINGTON, D.C.: U.S. President Joe Biden, U.K. Prime Minister Boris Johnson and Australian Prime Minister Scott Morrison have announced that Australia will adapt nuclear propulsion systems to its submarines, but will not develop nuclear weapons.
"We all recognize the need to ensure peace and stability in the Indo-Pacific over the long-term," Biden said.
The submarines will be built in Adelaide, South Australia, in close cooperation with the U.S. and Britain, Morrison said, adding, "We will continue to meet all our nuclear non-proliferation obligations."
Johnson said the agreement will make the world safer, calling it a momentous decision for Australia.
The three leaders did not mention China, and senior Biden administration officials told reporters the partnership is not intended to counter Beijing's influence.
The governments will now begin an 18-month consultation period "to determine every element of the agreement," Biden added.
In response, the Chinese Embassy in the U.S. said countries should not form exclusionary blocs targeting or harming the interests of third parties.
As Australia's economy depends upon China, this is a bold move, said James Clapper a former director of U.S. national intelligence, speaking to CNN, adding, "Clearly, the Chinese will view this as provocative."
A spokesperson for Morrison told Reuters that the new partnership will result in canceling Australia's 2016 deal with French shipbuilder Naval Group to build a new fleet of 12 diesel submarines worth $40 billion.
In response, the French said Australia's decision was a major disappointment, and French Foreign Minister Jean-Yves Le Drian stressed that the actions of the U.S. highlighted a lack of coordination when the two allies are facing common challenges in the Indo-Pacific region.
U.S. defense companies and other firms, such as General Dynamics and Huntington Ingalls Industries, are expected to profit from the submarine agreement.
The announcement of the pact came barely one week before Biden is scheduled to host the first in-person meeting of the leaders of Australia, India, Japan and the U.S., collectively known as the "Quad" group, aimed at countering China's influence.