AEI trade and tech policy expert Claude Barfield on Huawei, 5G, and the battle for Europe

Secretary of State Mike Pompeo recently visited several European capitals to persuade leaders of those countries to avoid using equipment from Huawei in their rollout of 5G mobile networks. Even though Pompeo received a mixed reception, AEI economist Claude Barfield – an expert in trade, technology, and intellectual property – explains in his latest piece that Europe will have to make difficult decisions that require technological, economic, and diplomatic tradeoffs.

Barfield identifies a series of potential challenges facing Europe regarding Huawei and 5G technology:

• Cybersecurity: [I]t should be acknowledged up front that 5G technology…does present cybersecurity challenges far beyond those of 2G, 3G, and 4G. … [I]n 4G and earlier generations of wireless technology, the system operated through central “brains” that directed and controlled data traffic. With 5G, data will be processed through multiple points…including even more points of communications down the line, as the Internet of Things…comes into focus.

• Diplomacy: Pompeo…played the security card, repeatedly warning that if a country decided to retain Huawei backbone equipment, such a move would have potentially grave consequences for the alliance with the US (and by inference, with the NATO alliance).

• 5G Policy: [U]nlike the US, where Huawei equipment has long been banned, Huawei is strongly entrenched in the EU, where it boasts about a third of the European telecoms equipment market, with chief rivals Ericsson and Nokia each holding about one-fifth or slightly more of that market. There is as yet no European-wide policy for 5G telecoms equipment, so each nation (and each company) has gone its own way.

• Cost: [M]any [European] companies and government-run telecoms operators have long used Huawei backbone equipment. The cost of switching to another vendor and replacing all Huawei parts and components would represent a huge additional burden. … [Many operators] have certainly benefited from having a technological giant such as Huawei facing off against the local European companies, Ericsson and Nokia[, and they] see Huawei 5G technology as being more sophisticated and often cheaper than comparable kits from Ericsson and Nokia.

The full piece is available here: Huawei, 5G wireless, and the battle for Europe