South Korea has faced a setback in its bid to acquire Canadian submarines, valued at up to 60 trillion won, raising concerns about the future of industrial cooperation between the two nations. The government had been working on a joint industrial cooperation package with the private sector, but the failure to secure the submarine deal has cast doubt on future initiatives.
According to relevant government departments, Canada has selected Germany's ThyssenKrupp Marine Systems (TKMS) as the preferred bidder for its next-generation submarine acquisition project, the Canadian Patrol Submarine Project (CPSP). Hanwha Ocean's proposal for a 3,600-ton submarine was ultimately unsuccessful.
The CPSP aims to replace the aging Victoria-class submarines with up to 12 conventional submarines, with a total project cost estimated at around 60 trillion won. Hanwha Ocean's submarine was already in operation with the South Korean Navy and was considered advantageous in terms of delivery timelines. However, the final decision was influenced by factors such as Arctic sovereignty and integration into NATO operational frameworks.
Canada sought submarines capable of long-term operations in the Atlantic, Pacific, and Arctic Oceans. TKMS's interoperability with NATO member countries like Germany and Norway, along with its alignment with European security cooperation, likely contributed to its selection.
The South Korean government is understandably disappointed. Over the past months, the Ministry of Trade, Industry and Energy, along with major companies like Hanwha Ocean, Hyundai Motor Group, and POSCO Group, had invested significant effort into developing a joint industrial cooperation package with Canada. There were speculations that Hanwha Ocean and TKMS could split the contract for the 12 submarines, but ultimately, South Korea fell short in the bidding process.
In the wake of this setback, the future of economic cooperation between South Korea and Canada appears uncertain. The two countries had been discussing not only submarine construction but also localizing maintenance, repair, and operations (MRO), as well as collaboration in steel, artificial intelligence (AI), satellite, and sensor technologies, energy and resource cooperation involving hydrogen, liquefied natural gas (LNG), and critical minerals, and R&D cooperation in icebreaker and industrial technologies.
Analysts suggest that projects directly linked to the submarine deal may lose momentum. Initiatives such as utilizing Canadian steel for South Korean submarine construction or establishing submarine MRO infrastructure in Canada were designed with Hanwha Ocean's contract in mind, making their continuation challenging.
However, it may be premature to conclude that all cooperation projects will be halted. There is potential for collaboration based on the industrial structures of both countries to continue on separate tracks. South Korea needs to diversify its energy imports and critical mineral supply chains, while Canada serves as a stable resource supplier and partner in advanced industries, aligning interests with South Korea.
As a result, there is a strong possibility that energy and resource cooperation, as well as industrial R&D collaboration, will persist. A Ministry official stated, "It is difficult to definitively say that all cooperation projects will be suspended. Projects based on the complementary industrial structures of both countries are expected to proceed regardless of the bidding outcome."
Additionally, the official noted, "Cooperation in energy and resources, as well as advanced industrial collaboration, is likely to continue expanding. While there is disappointment over the bidding process, we will do our utmost to leverage the experience and know-how gained to support K-defense bidding efforts."
* This article has been translated by AI.
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