Defense procurement chief says NATO interoperability, not technology, cost Korea the Canadian submarine contract

Defense Acquisition Program Administration chief Lee Yong-cheol apologized Tuesday over South Korea's failure to win Canada's submarine procurement program, while arguing the country remained competitive on key technical and delivery criteria and vowing to use the setback as a springboard for expanding defense exports.

Speaking at a press briefing at the Defense Ministry, Lee said he respected Canada's decision but took personal responsibility for the outcome. "Despite the public's strong attention and all-out pan-government support, we failed to deliver results — that is entirely due to my own shortcomings," he said.

Lee went through the selection criteria that Canadian Prime Minister Mark Carney cited when he named Germany's TKMS as the preferred bidder and Hanwha Ocean as the reserve bidder for the Canadian Patrol Submarine Project.

"I believe there was no meaningful gap between us on submarine performance — including fuel-cell-based air-independent propulsion and lithium-ion batteries — early delivery, 100 percent offset job creation, and regional benefits from MRO base placement," he said.

He added that South Korea had demonstrated in person that its submarines could conduct long-range operations of up to 14,000 kilometers while deployed, and that active Canadian Navy crew members had rated the vessels highly for habitability and operability.

Lee said South Korea had competed on equal footing with Germany in terms of performance and contract conditions, but identified NATO interoperability as the decisive factor in the outcome.

"I believe the gap emerged in NATO interoperability — the ability to share training, maintenance, parts and even crew," he said. "Canada chose to prioritize the network already established among NATO allies and its Atlantic strategic alliance."

He also pushed back against any suggestion that South Korea was fundamentally outclassed in submarine operations.

"Submarines are inherently limited in the concept of joint operations because stealth underwater is the core capability," Lee said. "I do not think we are overwhelmingly inferior in operability. Canada simply placed strategic importance on the convenience of NATO-compatible parts and maintenance."

Lee sought to draw meaning from the loss nonetheless. "This was an opportunity to imprint our submarine technology and industrial competitiveness on the global market," he said, drawing a parallel with South Korea's experience of losing a Norwegian tank contract before going on to secure a large-scale export deal with Poland. "It can become a turning point, just as that was."

He also assessed the broader defense market environment, warning that security-alliance-based bloc formation and a preference for domestically produced weapons had become structural constants. "Overcoming this requires securing a technological edge and a breakthrough localization strategy," he said.

Looking ahead, Lee outlined plans to strengthen research and development and accelerate the defense sector's shift toward AI. "We will speed up the development of systems incorporating physical AI capabilities," he said, "and use this experience as a stepping stone to becoming a top-four global defense exporter."

Meanwhile, a DAPA official said Tuesday that Prime Minister Carney had called President Lee Jae-myung in advance to seek understanding "with full diplomatic courtesy" before the announcement, describing the gesture as "the product of a commitment to sustaining the importance of diplomatic cooperation" between the two countries.