Canadian Subs from a South Korean Perspective

Why is Canada’s submarine project such a big deal for South Korea?

A South Korean submarine is making its way to Canada. The KSS-III from the Republic of Korea Navy is headed to British Columbia as part of South Korea’s and Hanwha Ocean’s bid for the Canadian Patrol Submarine Project (CPSP).

The Canadian government is planning to make a decision on CPSP this spring or summer. Interestingly, the two competitors for CPSP, Hanwha and Germany’s TKMS, were recently invited to update their bids, ostensibly to better align them with the Defence Industry Strategy and make other ‘improvements’. I take that to mean that the Defence Investment Agency wants to squeeze more economic benefits out of both bidders, without being too crass about it.

Although a decision is expected soon, CPSP remains a lively competition and both companies are still showcasing their goods. Hence, the KSS-III’s visit to the west coast.

In an earlier post, I observed that Hanwha and TKMS were approaching CPSP with different attitudes. Whereas Hanwha was enthusiastic and energetic, TKMS was dour and hesitant. That’s changed recently, with the Germans showing more signs of life —if still grumpily. Over the past year, they’ve launched a limited ad campaign, made more high-level visits to Canada, and signed MOUs and agreements with various Canadian companies. Still, the contrast between the South Koreans and the Germans remains evident. Although they both want the (multi, multi-billion dollar) contract, CPSP looks like a bigger prize for the South Koreans than the Germans.

Why is that? I was curious, so I raised it with South Korean defence analysts.

To understand the South Korean position, it’s useful to start by looking at Germany’s.

TKMS and German officials emphasize two points when they talk about CPSP. First, TKMS highlights that they have a long record of exporting submarines, and in some cases, building them in other countries. They’ve sold submarines to Argentina, Brazil, Chile, Ecuador, Egypt, Greece, India, Peru, Singapore, etc. Exporting submarines is par for the course for TKMS, which means that the Canadian project, while lucrative and important, is standard practice for them. Indeed, as TKMS folk like to point out, they sold their Type 209 and 214 submarines to South Korea.

Second, both TKMS and German officials emphasize that the submarine they’ve put up for CPSP, the Type 212D, is being built in partnership with Norway. The Type 212D will therefore be operated by two NATO allies. Having Canada join the partnership would add a third NATO ally to the mix and allow all three countries to leverage their alliance frameworks and familiarities. Put differently, a Germany-Norway-Canada submarine family would expand an existing capability partnership within NATO and facilitate other kinds of cooperation under the alliance umbrella.

How does South Korea compare? South Korea has built up a significant shipbuilding capacity in recent decades, and operates a large submarine fleet of its own, but has only exported submarines to Indonesia thus far. Unlike TKMS, then, Hanwha is working to become a major submarine exporter, not maintain its status as one. That’s important to keep in mind when comparing their respective approaches. Hanwha is the new entrant, whereas TKMS is the established firm, working to keep a dominant position. That breeds hunger in the former and confidence in the latter.

The South Koreans are in part banking on their production speed and capacity to help them break through. Hanwha emphasizes that its shipyard can build up to four submarines at once. While the Canadian Armed Forces will need time to absorb new submarines, since Canada would need time to build infrastructure and train crews, the South Koreans argue that their production capacity and timelines would give the Royal Canadian Navy more flexibility when it comes to the delivery of the boats.

This production capacity doesn’t just apply to ships. The whole South Korean defence industry is gearing up for greater exports. As an example, Gulf states are scrambling to acquire South Korean interceptors in light of the American and Israeli attacks on Iran and Iranian retaliatory strikes against the United States’s regional partners. South Korea’s defence industry will likely have a bigger presence in Gulf states, as a result.

South Korea also wants to position itself as a major supplier of defence capabilities to NATO, given the increases in North American and European defence budgets. They’ve had some success in Europe already, particularly with land systems, but they’re eyeing a bigger role. Right now, South Korea ranks as the second highest defence exporter to the alliance, as the 4th largest defence exporting country in the world. A greater share of exports to NATO could see South Korea climb higher.

Selling a submarine to Canada would be a huge win for South Korea in that respect. Submarines are complex platforms to build and operate. When exported, they often require close cooperation and coordination between the exporting nation and the importing one. Maintenance and upgrades reinforce these links. There’s a level of trust and mutual understanding that has to develop for the relationship to go well and the capability to perform optimally over its life.

Winning CPSP would put South Korea into that kind of deep partnership with Canada, a NATO ally. It would be a strong signal to the rest of the NATO alliance that South Korea should be an honorary member of the club, at least in terms of capability production and development. Put simply, if a NATO ally trusts South Korea with a capability as complicated and sensitive as a submarine, the rest of the alliance should be confident about their broader range of defence systems. Indeed, South Korea was a contender for a recent submarine project in Poland, but the contract was ultimately won by Saab. Canada gives them another shot at delivering this capability to a NATO member.

Alliances figure in the South Korean equation for another reason. South Korea’s been building new defence partnerships for a while now, but like the rest of the American aligned world, the Trump administration has increased the urgency of doing so. In addition to tariffs that went against the free trade agreement between South Korea and the United States, the South Koreans have been told that they need to do more for their own defence against North Korea and that they should expect less American support in the event of a conflict on the Korean peninsula. This is as worrisome for the South Koreans as facing Russia without as much American assistance is for NATO Europe.

Faced with the prospect of a diminished American commitment, South Korea is looking to strengthen its other friendships and alliances. The Canada-Republic of Korea Security and Defence Cooperation Partnership is one step in that general direction. A shared submarine would build significantly on that and more.

A final thing I took away from my discussions was that South Korean expectations for CPSP are high. The South Koreans have pulled out all the stops for CPSP, and a loss will be tough to swallow. Defence cooperation between Canada and South Korea will still expand and deepen if Hanwha loses, but at a slower and more cautious rate.

This may be one reason the idea of splitting CPSP between South Korea and Germany is still alive. Canada is looking to build on its partnerships with middle powers in both Europe and the Indo-Pacific, which makes it hard to choose between Hanwha and TKMS for a new submarine. I suspect that Ottawa will stick with buying just one type of boat, but I can see why some want to King Solomon CPSP.