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Latest round of #5G contract allocation by China Mobile is another blow to EU 'reciprocity' demands, as @m_huotari points out. This is only the latest iteration of setbacks in
the EU-CN telecoms reciprocity saga
[THREAD] https://twitter.com/m_huotari/status/1245740811800776704
the EU-CN telecoms reciprocity saga
[THREAD] https://twitter.com/m_huotari/status/1245740811800776704
During 3G deployment, Nokia & Ericsson had approx. 50% market share in CN. With rise of CN national champions, N&E share tumbled (approx: 25% at start of 4G, 15% at end, <10% today)
Meanwhile...
1/12
Meanwhile...
1/12
Huawei started dumping subsidised products on EU market. This started EU anti-dumping/subsidy investigation in 2013. Under TDI threat, in 2014 CN negotiated...
2/12 https://uk.reuters.com/article/us-trade-eu/exclusive-eu-cites-chinese-telecoms-huawei-and-zte-for-trade-violations-idUSBRE94H03J20130518
2/12 https://uk.reuters.com/article/us-trade-eu/exclusive-eu-cites-chinese-telecoms-huawei-and-zte-for-trade-violations-idUSBRE94H03J20130518
... the 'De Gucht - Gao Telecom Settlement' (2014): EU would drop TDI cases, CN would open standardisation bodies, both agree 'reciprocity in market access and monitoring' to ensure "fair and open market access"
3/12
https://www.borderlex.eu/eutradeinsights/eu-settles-for-better-than-nothing-deal-on-chinese-telecoms/index.htmlIn
3/12
https://www.borderlex.eu/eutradeinsights/eu-settles-for-better-than-nothing-deal-on-chinese-telecoms/index.htmlIn
In 2015 (start of 5G cycle), EU-CN agree (again) in Joint Declaration to commit to 'market access reciprocity'. This commitment was - once again - reiterated in 2019 EU-CN Joint Summit statement.
But...
4/12
https://ec.europa.eu/commission/presscorner/detail/en/IP_15_5715
But...
4/12
https://ec.europa.eu/commission/presscorner/detail/en/IP_15_5715
... 2019 5G tendering of 4 big CN telecoms operators for CN 40 biggest cities, N&E, again, marginalised. Allocation (private agreements, non-transparent) described by industry as 'managed'. This week's China Mobile contracts are continuation.
5/12 https://www.wsj.com/articles/china-grants-5g-commercial-licenses-to-its-biggest-wireless-carriers-11559825246
5/12 https://www.wsj.com/articles/china-grants-5g-commercial-licenses-to-its-biggest-wireless-carriers-11559825246
Clear that numerous commitments in past decade on 'reciprocal market access' have not materialised. But it gets worse for EU companies...
6/12
6/12
... Not only was EU market share in China almost entirely wiped (some estimate CN 5G market as 40% of global market, ie. EU+US combined), they also lost considerably in their home market. #Huawei EU market share estimates vary b/w 30-40% - some report up to 80% in indvl MS
7/12
7/12
EU tools to counter developments, incl. TDI, anti-trust, and many instruments mentioned in 2020 COM 5G toolbox were already around last decade. But like today, lack of political will, fear of retaliation and 'negotiation' won the day.
In 2013...
8/12 https://ec.europa.eu/digital-single-market/en/news/cybersecurity-5g-networks-eu-toolbox-risk-mitigating-measures
In 2013...
8/12 https://ec.europa.eu/digital-single-market/en/news/cybersecurity-5g-networks-eu-toolbox-risk-mitigating-measures
COM (De Gucht) was eager to take action. But industry was not asking COM to act, even lobbying against action for fear of making things worse (market share at the time still decent + booming CN market). Next to no support from industry...
9/12 https://www.euractiv.com/section/digital/news/de-gucht-juggles-politics-diplomacy-in-high-stakes-china-gambit/
9/12 https://www.euractiv.com/section/digital/news/de-gucht-juggles-politics-diplomacy-in-high-stakes-china-gambit/
... De Gucht faced opposition in Council by a German-led coalition forcing COM to settle w/ CN on the 2014 agreement.
This FT piece from 2013 really nails the political economy of EU trade and EU-CN relations at the time - and is as relevant today.
10/12 https://www.ft.com/content/aa79490a-f8f6-11e2-86e1-00144feabdc0
This FT piece from 2013 really nails the political economy of EU trade and EU-CN relations at the time - and is as relevant today.
10/12 https://www.ft.com/content/aa79490a-f8f6-11e2-86e1-00144feabdc0
The *economic security* case (1) for action against Huawei & (2) support of N&E in CN is not new. *National security* dimension only since 5G. But US misguided 5G diplomacy, economic primacy in EU policy and non-confrontational CN strategy derailed response
11/12
11/12
Was EU naive to think China would allow *fair competition* in strategic sectors? The history of int. pol. economy would likely judge it so. Newfound importance of 'critical infrastructure' in Europe suggests EU 'reciprocity' may need to reevaluate its baseline position
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