Talks between Australia and the European Union over a free trade agreement (FTA) have been reportedly postponed in the wake of the Federal Government's decision to scrap a $90 billion submarine deal with France.
Negotiations were due to be held this month but have now been put back to November, reports says.
"The FTA trade round has been postponed for a month until November," an EU official in Canberra told AFP.
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Australia last month cancelled a multibillion-dollar contract with French defence company Naval Group for 12 submarines. Instead the Federal Government decided to buy nuclear-powered vessels under the new AUKUS defence pact.
The move sparked a major diplomatic row with France, one of the European Union's largest members, and now appears to have hit ties with the entire bloc.
France has publicly said it can no longer trust the Morrison Government, accusing officials of lying and questioning whether the trade agreement can go ahead.
Trade Minister Dan Tehan, who was scheduled to travel to Europe for the talks, played down the decision.
"We understand the French reaction to our submarine decision but ultimately any nation must act in its national interest -- which is what Australia has done," he said.
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Mr Tehan flagged he plans to meet EU officials next week to discuss the free trade agreement.
"A free trade agreement is in the interests of Australia and the European Union and will strengthen our relationship that is built on a shared commitment to democracy, human rights, the rule of law and economic openness," he said.
The EU is Australia's third-biggest trading partner.
In 2020, the trade in goods between the two economies was valued at $58 billion and at $42 billion in services.
The next round of talks was due to cover areas including trade, services, investment and intellectual property rights.
