(Adds Morrison's comment on EU trade deal, Philippines reaction)
By Colin Packham
CANBERRA, Sept 21 (Reuters) - Australian Prime Minister Scott Morrison said on Tuesday he will not speak with the French president at the United Nations this week even though French anger over cancellation of a $40 billion defence contract could threaten an Australian-EU trade deal.
Australia last week scrapped a deal with France's Naval Group to build a fleet of conventional submarines and will instead build at least eight nuclear-powered submarines with U.S. and British technology after striking a trilateral security partnership with those two countries.
The cancellation of the deal has angered France, which accused both Australia and the United States of stabbing it in the back, and it recalled its ambassadors from both Canberra and Washington.
While U.S. President Joe Biden has sought to speak to French President Emmanuel Macron to ease tensions, Morrison said he would not hold a separate bilateral meeting with the French leader.
"There is not an opportunity for that at this time. I'm sure that opportunity will come in time," Morrison told reporters in New York when asked if he would speak to Macron on the sidelines of the United Nations General Assembly.
European Union countries expressed solidarity with France on Monday in a show of unity seen as threatening Australia's bid for a free trade deal with the bloc.
Australia and the EU are set to hold the next round of talks on a trade deal on Oct 12.
Australian Minister for Trade Dan Tehan on Monday said he expected those talks to go ahead as scheduled despite the French disappointment.
But Morrison sought to temper expectations that a deal will materialise. "It's not an easy thing to do, to get an agreement with the European Union on trade, I think everyone understands that," he said.
While Australia struggles to mend ties with Europe, the nuclear-powered submarines issue has also divided Canberra's Asian allies and angered China and North Korea.
Indonesia and Malaysia have said Australia risks igniting an arms race, though the Philippines on Tuesday said it supported Canberra's nuclear submarine deal as it would help bring stability to the region.
"The enhancement of a near-abroad ally's ability to project power should restore and keep the balance rather than destabilise it," Philippines Foreign Minister Teodoro Locsin said in a statement.
Morrison will meet Biden and European leaders on the sidelines of the United Nations General Assembly in New York before travelling to Washington for a meeting of the quadrilateral security dialogue, made up of India, Japan, the United States and Australia - which convenes later this week.
(Reporting by Colin Packham Editing by Robert Birsel and Michael Perry)