MELBOURNE—Australia has made a “huge” diplomatic error, the French ambassador said on Saturday having been recalled to Paris after Canberra ditched a multi-billion dollar order for French submarines in favor of an alternative deal with the United States and Britain. “I think this has been a huge mistake, a very, very bad handling of the partnership—because it wasn’t a contract, it was a partnership that was supposed to be based on trust, mutual understanding, and sincerity,” Ambassador Jean-Pierre Thebault told journalists in Canberra. Australia said on Thursday it would scrap the deal signed in 2016 for France’s Naval Group to build a fleet of conventional submarines and would instead build at least eight nuclear-powered submarines with U.S. and British technology after striking a trilateral security partnership. France called the cancellation of the deal—valued at $40 billion in 2016 and reckoned to be worth a lot more today—a stab in the …