Huawei decision shows the limits of US power — and Britain’s / UK takes the European way on Huawei

Huawei decision shows the limits of US power — and Britain’s

The lure of inexpensive Chinese routers and switches outweighed Washington’s pleas to its closest ally.

By RYAN HEATH AND NANCY SCOLA 1/28/20, 8:13 PM CET Updated 1/29/20, 4:49 AM CET

https://www.politico.eu/article/huawei-decision-shows-the-limits-of-us-power-and-britains/

For the United States, Boris Johnson’s embrace of Huawei is a potential tipping point in Washington’s faltering struggle with Beijing for global technological and economic dominance. For the United Kingdom, Tuesday’s decision is a pragmatic choice born of economic necessity.

In the end, the lure of the Chinese company’s inexpensive routers and switches proved irresistible to a U.K. government that is banking on a quick and cheap rollout of super-fast 5G networks to build its post-Brexit reputation for digital innovation and openness. And that was enough to outweigh the loud barrage of U.S. warnings that Huawei’s gear would open the door to espionage — not to mention a future in which the intrusive, antidemocratic principles of the Chinese Communist Party rule the technologies of the future.

The outcome bodes ill for the Trump administration’s attempts to persuade countries like Canada and Germany to spurn Huawei’s equipment, further chipping away of the United States’ future power in the networked world.

What’s more, Washington may have little choice but to accept Johnson’s move for the moment — despite the fiery words of Trump allies such as Republican Sen. Ben Sasse of Nebraska, who lamented that “our special relationship is less special now.” One U.S. official told POLITICO that some in the administration see at least a partial victory in London’s decision to exclude Huawei from the “sensitive core” of British networks, limit its involvement outside that core and acknowledge that Huawei is a “high-risk vendor.”

“'We will bank it and then see what more we can get' is what I would imagine would be our posture,” the U.S. official said, speaking on condition of anonymity.

Throughout the United States’ anti-Huawei crusade, even close U.S. allies complained that Washington was dictating, not making a case.

Not exactly fire and fury.

Why the U.S. pressure campaign fell short

Throughout the United States’ anti-Huawei crusade, even close U.S. allies complained that Washington was dictating, not making a case. Rather than presenting evidence, they said, it fell back on the sort of argument made by Secretary of State Mike Pompeo, that Huawei's security risks are self-evident: It's a Chinese company, full stop.

In the past, that might have been enough, especially given the special, exceptional role that the United States has always played in the global communications network itself. The country built the internet itself, and many of online realm’s most defining companies — from Google to Facebook to Apple to Amazon — were born in the U.S. That gave the country a certain moral, and functional, authority when it comes to tech.

But a lot has changed in the past several years. For one thing, residual anger remains outside America over former National Security Agency contractor Edward Snowden's revelations that the U.S. government was willing to tap those homegrown companies for spying, even on allies such as Germany. Whether that anger is entirely real or a performance, it has still made the rest of the world less inclined to accept Washington’s advice on how the internet should work.

And even countries that might have given the U.S. the benefit of the doubt have balked in recent months at the Trump administration's often undiplomatic 5G diplomacy. On a July episode of POLITICO's Global Translations podcast, a German diplomat working on Huawei conceded that in the end, his country would likely end up close to the U.S. position — but it wasn't going to be told what to do by the United States. (Chancellor Angela Merkel's coalition government is still struggling with a decision.)

What's more, the Germanys of the world now have options when it comes to tech — cheap, reliable, Chinese options. Both the Chinese people and Chinese government are immensely proud of Huawei because of it, and they're not going to let countries get away lightly with dismissing the company.

In the U.K., the unspoken issue is Brexit

The U.K. economy is predicted to grow by just 1 percent in 2020. With an uncertain economic future thanks to Brexit, getting rid of Huawei in favor of more expensive Swedish (Ericsson) and Finnish (Nokia) suppliers is an economic headache Britain doesn’t need — on top of the fact that such a move would also delay the networks.

Given that the decision is guaranteed to anger Britain’s closest ally — the United States — the decision demonstrates the wider tensions in the country’s post-Brexit “Global Britain” policy. Expect more of those tensions if Britain pushes ahead with a 2 percent levy on big tech firms, an action that U.S. Treasury Secretary Steven Mnuchin warned British Chancellor Sajid Javid against implementing in a Saturday meeting.

On their own, these two transatlantic fights would be a significant nuisance for Britain, but hardly a crisis. But the problem for Britain is they can’t be separated from London’s wish for a quick trade deal with the United States.

Britain wants the U.S. trade deal for two reasons: to show the rest of the world that Britain is worth doing business with as its breaks from the EU, and to pressure the EU into settling its own trade deal with the U.K. quickly.

“You think Trump is going to be soft in an election year?” one EU negotiator told POLITICO on Monday. “Come on, the U.S. deal isn’t leverage.”

But Johnson’s Huawei decision threatens to set off a cascade of complications for that strategy, especially since it alarmed senior Republican lawmakers who would may have to approve any trade deal. EU trade negotiators also scoff at the idea of Britain using U.S. trade negotiation as leverage in EU-U.K. talks.

“You think Trump is going to be soft in an election year?” one EU negotiator told POLITICO on Monday. “Come on, the U.S. deal isn’t leverage.”

The negotiations are fragile before they’ve even started: The U.S. wants full access for American drug and medical device-makers, which sparked outrage across the U.K. in 2019, given the cherished role Britain’s National Health Service plays in national life there. Meanwhile, U.S. Agriculture Secretary Sonny Perdue is talking tough in EU-U.S. trade negotiations, pushing back against an EU ban on hormone-treated beef and poultry washed with peracetic acid, which signals that Britain will be in line for the same treatment.

If delaying or losing a trade deal is the political price Britain has to pay for its Huawei decision, advisers to Johnson believe they’re making a calculated choice.

“In 10 years, we want to be a high-tech Silicon Valley across the whole of the U.K.," one British government official who works closely with Johnson told POLITICO. "That is more important than getting slightly cheaper meat.”

Annabelle Dickson and Eric Geller contributed to this report.

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UK takes the European way on Huawei

London’s refusal to fully ban Chinese 5G vendor is a boon to European capitals preparing similar measures.

By LAURENS CERULUS AND ANNABELLE DICKSON 1/28/20, 8:03 PM CET Updated 1/28/20, 9:59 PM CET

https://www.politico.eu/article/uk-takes-the-european-way-on-huawei-us-5g-security/

British Prime Minister Boris Johnson's government on Tuesday announced it will allow Huawei to sell equipment for 5G networks but keep its access limited to peripheral, non-sensitive parts of the network | Justin Tallis/AFP via Getty Images

Forget Brexit. The EU and the U.K. are sticking together when it comes to handling "high-risk" telecom firm Huawei.

British Prime Minister Boris Johnson's government on Tuesday announced it will allow Huawei to sell equipment for 5G networks but keep its access limited to peripheral, non-sensitive parts of the network. It's a measured move that concludes months of heated political debate over the issue.

In his decision to allow Huawei partial market access into future telecom networks, Johnson is siding with European countries — and shunning his chum in Washington, Donald Trump.

The U.K. solution is one of the first comprehensive policies imposed in EU member countries, and — despite the imminent split from the EU — is likely to be repeated across the Continent, too.

"The EU's approach was inspired by the U.K. one," said an EU diplomat close to the issue, who requested not to be named. A blanket ban — as requested by the U.S. — "won't be the preferred choice for most [European] countries," the diplomat said.

The U.S. has threatened to cut back on intelligence sharing with countries that allow Huawei into the networks.

Across Europe, governments are reviewing their security processes for the telecom sector, largely as a consequence of continued U.S. pressure to do so. Countries including France and the Netherlands have already beefed up their rules on telecom security, while Germany is in the midst of reviewing its rules.

National and EU officials have also worked together for months on new measures to protect 5G networks. The end result is a so-called toolbox of security measures that will be presented on Wednesday in Brussels.

The toolbox text, seen by POLITICO last week, recommends EU capitals impose "restrictions — including necessary exclusions" for "high-risk" vendors, which the EU previously defined as suppliers likely to be "subject to interference from a non-EU country." That's expected to hit Huawei and its smaller Chinese rival ZTE.

The EU's joint list of recommendations also identifies "critical or sensitive" parts of 5G networks.

In closing ranks, European governments hope to avoid retaliatory measures from both China and the U.S.

At national level, major EU countries such as France have largely followed that same rulebook, rolling out new security requirements that are likely to exclude Chinese vendors such as Huawei from core parts of the network — although draft rules in Germany have been criticized for being too lenient.

The U.K.'s move is already rubbing the United States administration the wrong way. In a statement, the U.S. said it was "disappointed" by the decision. U.S. diplomats and security officials for more than a year pressed European counterparts to go all the way and impose a blanket "ban" on Huawei equipment in Europe.

Providing cover

In closing ranks, European governments hope to avoid retaliatory measures from both China and the U.S.

Chinese officials have warned that far-reaching market blocks would harm trade relations with European countries. In the case of Germany, the Chinese ambassador to Berlin linked the country’s approach to Huawei to its car sales in China.

Johnson's move to impose only partial limits on Huawei "could give [German Chancellor Angela] Merkel additional political cover to push for her preferred approach," which is to avoid strict limits to Huawei's market access, said Paul Triolo, a researcher at the think tank Eurasia Group.

But, Triolo added, it's likely Merkel "will attempt to kick the issue down the road" as she faces political pressure from her Social Democratic Party coalition partner and members of her own conservative party.

German Chancellor Angela Merkel's approach is to avoid strict limits to Huawei's market access | Michele Tantussi/Getty Images

It’s not just China that is forcing European countries to stick together. The U.S. has threatened to cut back on intelligence sharing with countries that allow Huawei into the networks.

The U.K. will now become a test case for Trump to stand by that threat — with the rest of Europe watching.

With Brexit fast-approaching — and considering its close security relationship with the U.S. as part of the Five Eyes community — London would have been a likely partner to fall in line.

But Johnson's government instead balanced the economic interests of domestic telecom operators and his own election promise to roll out high-speed internet networks across the country, with the risk of offending his political ally in the White House.

"We continue to urge all countries to carefully assess the long-term national security and economic impacts of allowing untrusted vendors access to important 5G network infrastructure," a U.S. administration official said in the statement. "We look forward to working with the U.K. on a way forward that results in the exclusion of untrusted vendor components from 5G networks."

Steven Overly contributed reporting.