UK’s Huawei decision: Merkel to follow?

“There’s no reason why we shouldn’t have technological progress here in the U.K. — allow consumers, businesses in the U.K. access to fantastic technology, fantastic communications — but also protect our security interests and protect our key partnerships with other security powers around the world,” Johnson said on January 27th 2020. One day later Boris announced his decision regarding the involvement of Chinese tech giant Huawei in the roll-out of the 5G comms network: “high-risk vendors” will be excluded from the sensitive core of networks, and there will be a 35% cap on their involvement in the “non-sensitive parts” (f.e. antennae, basestation/towers). This is lower than the 50% which was rumored before to be acceptable to the UK government for the periphery. The new figure may force BT and Three, two of the country’s four nationwide operators, to replace existing (4G) and already installed equipment of Chinese origin. Interestingly the UK’s National Cyber Security Centre (NCSC) issued an accompanying statement that said: “Huawei has always been considered higher risk by the UK government.”

Yet despite being viewed and termed as such, Huawei wil be allowed to help with the build up of the RAN (radio access network) in the UK! The theory is that by limiting Huawei to the RAN but banning it from the core, the authorities make the risk of its involvement more “manageable”. How exactly the public won’t know, the details of these security measures are usually kept secret. Johnson’s decision sounds very similar to a compromise proposal formulated by the German coalition partner CDU/CSU back in December 2019….Just like the UK, Germany political parties have been split on the Huawei topic. Merkel will have to accept that the majority of the German parliament does not want Huawei equipment to be deployed at the core of the network. As to the periphery, the role of Huawei is likely to be reduced too: according to the December compromise proposal of the Unions fraction a maximum of 30% of the RAN network may still be owned by “a non-European supplier” by 2025. In Germany Huawei currently makes up around 70% of the 4G network…But a few days ago Merkel has requested her party to again postpone a final decision to March, as she wants to re-align at European level!! She is held hostage by the German car manufacturers, who have made themselves too dependent on the Chinese market and are afraid to lose business if Germany would decide to ban Huawei….And Merkel surely is watching closely the US reactions to the UK decision…

US warnings

The US has warned Europe and in particular the UK and Germany to fully ban Huawei in order to ensure future security, intelligence and trade co-operation. Will the US President and government deem the UK’s compromise decision sufficient? Or is Boris Johnson risking a historic rupture in the United Kingdom’s intelligence-sharing and trade relationships with the U.S. by still allowing a role for Huawei in Britain’s 5G networks? Johnson has claimed there are no alternatives to Huawei: fact is the UK, just as Germany, made itself too dependent on the Chinese equipment maker over the past decade, without paying much attention to or having any debate about the national security aspects. Boris as the mayor of London was one of the main drivers of this close cooperation with Huawei… The alternatives just came/come at a higher price… Question now is whether these short-term savings are worth the long-term costs and risks… Johnson’s seems to bet “yes, they are”. He does again believe the UK can have it both ways with this Huawei compromise, just as with his Brexit approach, the “have our cake and eat it policy”.

On the one hand Boris Johson today has shown (intended to show?) he isn’t Trump’s poodle. He apparently cares more about not delaying the roll-out of 5G, indispensable for the speedy modernization and upgrade of the countryside and British economy, which will face a lot of challenges post Brexit, than securing a trade deal with Trump. Probably in London the expectation is the old and close ties will be maintained with the USA anyhow ‘cos Trump himself has sent mixed messages over his genuine stance towards the Chinese telecom company. Possibly Johnson is counting on clemency of his “buddy Donald”: if behind closed doors the Prime Minister would f.e. ask for the President’s understanding the UK can not afford any delays and extra costs in the roll-out of 5G, while promising to eventually replace Huawei’s equipment in the periphery of the network to meet America’s concerns, London might hope Trump’s disappointment would gradually dissipate. And perhaps Johnson could even suggest the UK and the USA should work closely together to enable and accelerate more and cheaper (technology/software) alternatives to Huawei, to phase out all Chinese equipment in the periphery once feasible….And promise the UK will never make itself dependent on Chinese technology again…

Risks

On the other hand Johson faces the big risk China and the USA will be less patient and understanding than the EU in any (trade) negotiations. On its own the UK will have less power and clout to influence the opinions in either the USA or China, both intoxicated by their country first ideology. The UK needs a trade agreement with both great powers more urgently than vice-versa in order to compensate for the negative economic impact of Brexit. For China and the US, the EU (and Germany!) is still more important than the UK. By leaving the bloc right at the moment the geopolitical dispute between the USA and China is flaring up, Britain finds itself in an even more vulnerable position than the EU itself…. Over the years since the Brexit referendum, the geopolitical situation has changed tremendously, and it has moved UK’s interests on many China-related issues much closer to Brussels, though people like Nigel Farage, the leader of the Brexit party, failed/fail to realize or understand this. Today he decried Johson’s decision on Huawei, blaming his Prime Minister for putting the UK first, but wasn’t that what Brexit was all about? “A terrible decision. This is bad for national security, an insult to our closest friends and a sign that our establishment have been paid off by China.”

The common issues with the EU range from industrial policy, to investment screening, to cooperation in research and technological innovation. On all of them, there still is significant room for cooperation between Britain and Europe, provided Johson isn’t aiming for a hard brexit. Otherwise the UK not only risks to be excluded from the American intelligence/data sharing network, but also of being banned from the European single digital market…

The trade deals

Trump has already promised Johnson a “massive” trade deal this year, but the President must at least be upset his maximum pressure campaign has not generated the desired results in London. Trump surely will translate his frustration into an even harder stance in the trade negotiations with the UK: taken together with the U.K.’s reluctance to fully back the U.S. hardline position on Iran and differences over a digital tax, Washington might demand, as part of any U.K. – U.S. trade deal, a clause that lets the U.S. withdraw should Britain f.e. enter into a free-trade agreement with a “non-market” country like China. Trump insisted on such a clause in the new trade deal with Canada and Mexico while he was preparing his own phase 1 trade deal with China ….! And the American Congress, which has identified China a system rival and long-term threat, could turn out to be even more hawkish than the President on the future security co-operation and trade relations! As we all know, the anti-Huawei policy does have bipartisan support….

Take Federal Communications Commission Chairman Ajit Pai, who was appointed by President Barack Obama and elevated to chairman by Trump, who recently said: “If you want to trust that companies subject to Chinese jurisdiction won’t comply with a request from the Chinese intelligence services, that’s your choice. But it’s not a choice that I believe is a wise one when it comes to our national security here in the United States.” Unlike existing internet infrastructure, “5G will be controlled by software that could be used remotely for surveillance,” Pai commented.

Core vs Periphery in 5G

The US argument is that any distinction between the core and the radio is blurring with the switch to 5G networks, meaning only a comprehensive ban on Huawei and ZTE would guarantee security. Ericsson, the Swedish 5G equipment maker, has been saying the same about this technological shift. The distinction between core and periphery makes limited sense in the new generation of networks. To achieve the desired combination of high speed and ‘low latency’ – which is necessary for advanced 5G applications, from autonomous driving to industrial applications in manufacturing – base stations are now more than the mere antennae they were in the past. They are becoming smart, as core functions are moved to the edge of the network and computing can take place closer to the end user in the base station. Pretending that there would be a clear-cut distinction – between a core network that can be secured and the radio access network – is an illusion, according to quite a few telecom experts. Whom to believe?

Senator Cotton, 42, a Republican, has repeatedly warned PM Boris Johnson and the UK that including Huawei in the UK’s infrastructure will directly affect the special relationship. Two weeks ago Cotton launched a bill to block any nation which uses the Chinese firm from sharing US intelligence, even saying: “In those circumstances, the US would also review any planned trade arrangements with the UK” and added: “In choosing Huawei, Downing Street would grant the Chinese Comm­­unist Party the ­ability to conduct pervasive espionage and provide Beijing with long-term economic and political leverage over the UK.”  Boris Johson’s government risk assessment clearly has reached a different conclusion….

Europe’s lack of a strategic debate

Will Johson’s decision be followed by Canada and Germany? It would mean a major defeat for the Trump government and underline the poor mutual relationships if more major American allies would follow in the footsteps of the UK. Unfortunately, the current debate in Europe on how to enhance “strategic autonomy” has been very narrow. It concentrates mainly on carving out foreign policy independence from the bullying, dictating Trump administration. How to ensure European sovereignty in the digital age does deserve far more attention and public debate. This greater sovereignty should or could have started with boosting European R&D spending, favoring European alternatives to Huawei and better public understanding of the security risks of Chinese 5G. Moreover, more transatlantic information exchange and intelligence sharing with the United States on China will also be crucial for the decade to come as the PRC’s (military and economic) power will continue to grow…

China’s losing battle in Europe

Despite the disagreements between European countries and the USA, China and Huawei have no reason to cry victory: even though the Chinese company will still play a role in Europe’s 5G, clearly China and Huawei are facing a growing lack of trust by politicians and intelligence organizations across Europe. Huawei is an untrusted company, but -for economical and political reasons – not (yet) considered untrustworthy enough to be fully excluded from Europe’s digital infrastructure…. Last year the European Commission (belatedly!) concluded Huawei was able to become the EU’s top telecom supplier in record time by receiving enormous subsidies from Chinese state banks. European officials do meanwhile also admit that critical infrastructure built with technology manufactured in China may give Chinese companies access to vast troves of sensitive data and industrial information—which ultimately might be turned over to Chinese authorities. Tellingly, last week the head of the small and medium enterprises association (BDI) in Germany spoke out against any role of Huawei in his country’s network: “the security of data and networks must have the highest priority” he stated….A year ago he was still very much opposed against excluding Huawei…

Moreover, Chinese-manufactured infrastructure could make European countries more vulnerable to Chinese spying and cyberattacks delivered through the network infrastructure, and to overall national security threats. European Commission Vice President for the Digital Single Market Ansip remarked in December: “I think we have to be worried about Huawei and other Chinese companies,” recalling the mandatory collaboration between certain technology companies and intelligence agencies in China. In Brussels, the European Commission will release its 5G toolbox tomorrow, i.e. a series of recommendations on how the EU could appease some of the security concerns that have emerged with regards to the bloc’s rollout of 5G technologies. It’s up to each EU member state to review and implement. It could still further limit Huawei’s role in Europe’s 5G networks….

Let’s see in what direction the discussion in Germany is heading …and I am curious if any further debate will occur in the Netherlands once the EU security toolbox kit will have been issued….

https://www.mijngroeve.nl/history/usa-europe-china-crossing-swords/ https://www.mijngroeve.nl/history/the-die-is-cast-huawei-banned-from-core-of-dutch-5g-network-at-last/

https://www.mijngroeve.nl/history/5g-roll-out-merkels-headache/ https://www.mijngroeve.nl/history/america-first-vs-china-first/

refer also www.reuters.com en politico.com

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