Australia Signs Historic, Billion-Dollar Defence Contract With South Korea Amid Increasing Regional Tensions

Australian Prime Minister Scott Morrison (R) looks on as South Korean President Moon Jae-in signs the official visitors book at Parliament House on December 13, 2021 in Canberra, Australia. Lukas Coch - Pool/Getty Images

Australia has signed-off on a historic $1 billion weapons contract with South Korea as Prime Minister Scott Morrison held formal talks with President Moon Jae-in in Canberra.

The first international leader to visit Australia since the country reopened its borders, Moon and first lady Kim Jung-sook arrived in the capital on the weekend before a formal welcome and meeting at Parliament House on Dec. 13.

The new deal with South Korea defence giant Hanwha, which will provide 30 self-propelled howitzers and 15 armoured ammunition supply vehicles for the army in Geelong, Victoria, is Australia’s largest defence contract with an Asian country.

“(It) is one of several projects that will modernise the Australian Army, ensuring it continues to maintain a capability advantage now, and into the future,” Defence Minister Peter Dutton said.

“We are committed to keeping our region safe while protecting our interests in a rapidly changing global environment.”

The contract is expected to create at least 300 jobs in the greater Geelong region when the construction starts in 2022, according to the plan first announced during the 2019 federal election.

Australian Defence Minister Peter Dutton reacts during a bilateral meeting with South Korean President Moon Jae-in at Parliament House on December 13, 2021 in Canberra, Australia. Lukas Coch - Pool/Getty Images

Moon’s visit comes amid a time of concerns about Beijing’s expansion in the Indo-Pacific region.

“There is a lot of concern from many countries within the region in relation to some of the bullying from the Chinese government,” Dutton told Sky News. “We want peace and stability to prevail in our region, and that is why we have close relationships with people of shared values. It is very important and probably more so than ever.”

The defence minister said ties between Australia and South Korea is “quite a remarkable one” and is deepening.

“It’s a very important visit; it comes at the end of his term,” he said, referring to Moon’s expected conclusion of presidential term next year.

As the two countries mark 60 years of diplomatic relations this year, the visit also sees their ties updated to “comprehensive strategic partnership” status, which Australia already has (or it’s equivalent) with ASEAN, China, Fiji, France, Germany, India, Indonesia, Japan, Malaysia, and Papua New Guinea.

Australian Prime Minister Scott Morrison (2nd R) with First Lady Jenny Morrison (R) pose for photographs with South Korean President Moon Jae-in (2nd L) and First Lady Kim Jung-sook (L) at Parliament House on December 13, 2021, in Canberra, Australia. Lukas Coch - Pool/Getty Images

The updated ties reflect “the depth and breadth of our cooperation and people-to-people links, and common aspirations to work even more closely together in our region,” Prime Minister Morrison said.

“Our comprehensive strategic partnership with the Republic of Korea is underpinned by our joint commitment to defence and security cooperation.”

President Moon and the first lady will lay wreaths at the Australian War Memorial and the Australian National Korean War Memorial, in commemoration of the sacrifices Australia made in the Korean War.

As Australia’s fourth-largest trading partner, South Korea’s major imports from Australia include iron ore, coal, natural gas, and beef, while its exports to Australia include cars and refined petroleum. Bilateral trade accounted for around $41.3 billion of Australia’s international trade in 2019 (4.5 percent of total), according to government statistics.