SYDNEY, July 13, 2025 (BSS/AFP) - France's defence relations with Australia have recovered after their 2021 bust-up over a major submarine contract, the country's ambassador said Sunday.

Paris expressed its "strong regrets" when Australia tore up a multibillion-dollar deal to buy a fleet of diesel-powered submarines from France, Ambassador Pierre-Andre Imbert said.

Since the 2022 election of Prime Minister Anthony Albanese, however, the defence relationship had been "restarted", he said.

"Now, the first pillar of our cooperation is defence and security, so we have a very good level of cooperation," the ambassador told AFP as French forces joined major military drills around Australia.

When Australia ditched the French deal, it opted instead to acquire nuclear-powered vessels in a new three-way AUKUS pact with the United States and Britain.

But a US defence official last month revealed that a review of AUKUS was underway to ensure it "aligned with the President's America First agenda" and that the US defence industrial base was "meeting our needs".

Under the AUKUS deal, Australia would acquire at least three Virginia class submarines from the United States within 15 years, eventually manufacturing its own subs.

The US Navy has 24 Virginia-class vessels but American shipyards are struggling to meet production targets set at two new boats each year.

Asked if France would ever consider discussing a new submarine deal with Australia if the AUKUS agreement was torpedoed by the review, the French ambassador said he was reluctant to speculate.

"I would say it's more an issue for Australia for the moment. And of course, we are always discussing with our friends of Australia," he said.

"But for the moment, they have chosen AUKUS," he said. "If this changes (and) they ask, we'll see."

More than 30,000 military personnel from 19 nations are set to join the three-week, annual Talisman Sabre military exercises, which started Sunday across Australia and Papua New Guinea.