Financial news

Latin America resists US pressure to exclude Huawei

By  | 


Latin American is defying Trump administration efforts to turn the region against Huawei, choosing to stay close to Beijing rather than join a US campaign to ban the Chinese company from telecoms networks.

US officials have been pressing Latin American countries to replicate Washington’s decision to exclude Huawei from its 5G networks, diplomats say, warning the company could be used by Beijing in snooping activities.

But Brazil, under rightwing president Jair Bolsonaro, an ally of US counterpart Donald Trump, has led the resistance. Hamilton Mourão, Brazil’s deputy president, said his government saw “Huawei with good eyes” while visiting Beijing with a business delegation in late May.

“Huawei is established in Brazil and will make more investments,” he said, adding that Huawei representatives had come to his Brasília office in May to present their expansion plans.

Brazil, Mexico and Argentina — Latin America’s three largest economies — are due to decide this year or in early 2020 whether they will allow Huawei to participate in the rollout of 5G mobile infrastructure in their countries.

In April, Wilbur Ross, US commerce secretary, left an audience of Mexican and US businessmen in no doubt what the Trump administration thought of Huawei’s 5G expansion plans in Latin America.

“We don’t want very active participation of Chinese investment in Mexico, especially not in strategic projects,” said Mr Ross, according to Alfonso Romo, President Andrés Manuel López Obrador’s chief of staff.

A senior South American diplomat said “there is a lot of pressure from the US not to let Huawei in”, stressing that the anti-Huawei push was one reason for US secretary of state Mike Pompeo’s visits to the region this year.

READ ALSO  Go beyond the headlines with Google News

But the Trump administration’s efforts appear to have come to nothing — at least for now.

Sebastián Piñera, Chile’s president, met Huawei chairman Liang Hua in Shenzhen in April and said “Huawei is welcome to participate in public tenders” in Chile for 5G and fibreoptic cable projects.

Ricardo Salinas, a media mogul close to Mr López Obrador in Mexico, said: “I have nothing but good things to say about Huawei. I think it’s a disgrace what these Americans are doing to put them down.”

Ernesto Piedras, head of the Competitive Intelligence Unit consultancy, said Mexico’s telecoms networks were deeply dependent on Huawei. Mexico is dominated by América Móvil and US giant AT&T, which entered the market by buying local networks that “six years ago were totally Huawei”.

“AT&T in Mexico has Chinese DNA,” Mr Piedras said.

The US ban would delay the worldwide rollout of 5G by 10 to 14 months, he added, making it unlikely to arrive in Mexico before 2023.

Analysts say Huawei has the best equipment for 5G, adding there is no US supplier able to compete with them in Latin America. The only other viable providers are Samsung, Ericsson and Nokia, which would cost more.

The US campaign against Huawei has become bound up in President Donald Trump’s trade war with China. Washington has unsuccessfully lobbied European governments to ban Huawei and is threatening to limit intelligence sharing with the UK if it does not follow suit.

But for Latin America, where economic growth is faltering, the imperative to attract Chinese investments and financing is strong.

READ ALSO  Saudi Aramco IPO set to value oil group at $1.7tn

In Beijing, Bruno Rodríguez Parrilla, foreign minister of communist-led Cuba, told China’s official Xinhua news agency: “We have traditional business relationships with Huawei, and Cuba has all the confidence in Chinese technology and in this company in particular.”

He said the US was “losing the technological contest” versus China and resorting to “crude tools, typical of another era” to curb its expansion.

One executive at an international telecommunications company operating in Argentina said “there is no way Huawei is going to be excluded” from the country. If the presidential candidate handpicked by former leftist president Cristina Fernández de Kirchner wins an October election, Buenos Aires is likely to become more closely aligned with Beijing.

Brazil’s opposition to a Huawei ban runs against the grain of Mr Bolsonaro’s broader political affinity with Mr Trump. But it partly reflects the influence of the farming constituency that brought him to power, which relies on China as a big buyer.

Larissa Wachholz, director at Vallya, a consultancy that brings Chinese investors to Brazil, said that unless it was proved China had access to other countries’ data via 5G technology “Brazil will not and should not, prevent Huawei from participating”.



Via Financial Times

Print Friendly, PDF & Email

Hold dit netværk orienteret