Photo/Illutration In this July 4, 2019, file photo Australia’s Treasurer Josh Frydenberg speaks in Parliament in Canberra. (AP Photo)

CANBERRA--Prime Minister Scott Morrison welcomed France’s decision to return its ambassador to Australia and said Thursday the bilateral relationship was bigger than the canceled submarine contract.

Morrison dismissed suggestions that Australia needed to rebuild its relationship with France after canceling a 90 billion Australian dollar ($66 billion) contract last month, an act French Foreign Minister Jean-Yves Le Drian described as a “stab in the back.”

“We already have cooperation. See, the Australia-France relationship is bigger than a contract,” Morrison said.

“France’s presence and significance and influence in the Indo-Pacific isn’t about a contract. It’s about the fact they have an actual presence here, in the Indo-Pacific, that they have a long-standing commitment and work with Australia across a whole range of different issues,” he added.

France recalled its ambassadors from Washington and Canberra after Australia dropped the contract with majority French state-owned Naval Group to build 12 conventional diesel-electric submarines.

Under an alliance that includes Britain, Australia will instead acquire a fleet of eight nuclear-powered submarines built with U.S. technology.

France quickly returned its ambassador to the United States, a NATO partner.

Le Drian told a parliamentary committee that Ambassador Jean-Pierre Thebault would return to Canberra to help “redefine the terms” of the bilateral relationship and defend French interests in winding up the contract.

It is not yet clear how much the termination of the contract signed in 2016 will cost Australia. It had already spent AU$2.4 billion ($1.8 billion) on the project, Morrison said last month.

He did not elaborate on the costs when asked on Thursday.

“We have a very good understanding of how we’re going to proceed with that matter. We’ll be working within the contract as it’s set out,” Morrison said.

France and its European Union partners have reacted with hostility toward Australia over its shock decision to ditch the French deal.

Morrison said French President Emmanuel Macron wouldn’t take his calls.

“I look forward to our first meeting again, our first phone call again,” Morrison said. “I acknowledge it’s a difficult period, of course it is. There was no way that we could have taken this decision without it ... causing deep disappointment and hurt to France.”

When leaving Australia, an angry Thebault described the canceled contract as an “incredible, clumsy, inadequate, un-Australian situation.”

“This has been a huge mistake, a very, very bad handling of the partnership,” Thebault said.

This week, Trade Minister Dan Tehan has been snubbed by French officials while in Paris.

Negotiations on a free trade deal between Australia and the EU that were to take place this month have been postponed until November. Bernd Lange, a German lawmaker and chairman of the European Parliament’s Committee on International Trade, said questions have been raised about whether Australia can be trusted.

Agriculture Minister David Littleproud saw the ambassador’s return as a positive sign.

“We’re understanding the disappointment they have, but at some juncture we’re going to have to move forward, and we believe that an EU free trade agreement would be a good juncture,” Littleproud said.

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