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#Huawei - Not everyone wants a level playing field

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I remember one particular week in December 1990 very well.   The great and the good of world trade were gathered in a Brussels conference hall, at an area known as the Heysel, to conclude - they hoped - the ‘Uruguay Round’ of trade talks that would hopefully remove barriers to commerce around the world, writes Jim Gibbons.

Every day I made my way in the dark, together with my camera crew, to the doors of the building where the talks were being held.  There, along with many others, I waited in the freezing cold, a stone’s throw from Belgium’s famous Atomium landmark, to see if we could entice someone notable to stop and give any of us a comment on the progress (or lack of it).  We all wanted a soundbite.   The leaders were stuck on the thorny issue of agricultural trade reform, an obstacle that would end up derailing the negotiations for three long years; it would be April 1994 before a deal was finally struck, creating the World Trade Organisation (WTO).   So there we were, the Brussels correspondents of EU media, together with journalists from around the world, hoping to witness an historic moment in the history of the General Agreement on Tariffs and Trade (GATT).   We were to be disappointed, as were the various negotiators, especially those from developing countries, who felt that their needs for access to global markets were being ignored in favour of keeping the rich countries happy.   “We have a saying in my country,” one African politician told me, “When the elephants fight it is the grass that gets trampled, and we are the grass.”   Now it’s happening again, except that thirty years on, some of the grass has grown quite tall and rather tough and defies the pachyderms.   They go on trampling, though.

Take the issue of 5G, the next generation of electronic communication and connectivity.   US President Donald Trump has made it a policy, backed up with threats, to exclude the Chinese tech giant Huawei (and other Chinese-owned companies) from having any part in creating the networks.   The US has offered no evidence that Huawei poses a threat, which means that excluding the company from taking part is simply because it’s Chinese and its government is Communist, at least in theory.   And Washington doesn’t trust China.   However, to exclude Huawei on the basis of its country of origin would be in breach of the agreement that wasn’t reached in Brussels but was just over three years later, when most of the 123 parties involved added their signatures on 15 April, 1994, in Marrakesh, Morocco.   And it’s not just in the United States that the Trump administration is trying to impose a ban on Huawei; it has been strong-arming other allies, as well.   It seems determined to shut out Huawei from markets around the world.

The United States may be the prime mover in this endeavour but it is not alone.   Even the European Union seems to want to restrict Huawei’s market access.   Partly because of American concern over possible vulnerabilities in Chinese-built 5G equipment, the European Commission published a “5G Toolbox” of recommendations.   As the Commission’s website puts it: “The toolbox addresses all risks identified in the EU coordinated assessment, including risks related to non-technical factors, such as the risk of interference from non-EU state or state-backed actors through the 5G supply chain.”   In fact, the Commission is aware of the fears and seems loathe to upset the Americans, even if it means breaching WTO rules.   “A genuine Security Union is one which protects Europe's citizens, companies and critical infrastructure,” said Margaritis Schinas, Vice-President for Promoting the European Way of Life, “5G will be a ground-breaking technology but it cannot come at the expense of the security of our internal market.”    So, a little bit of a wobble there.   Perhaps what needs to be balanced up here is the fear that China may listen in to our secrets without us knowing, on the one hand, and the fear that Europe will be left behind in the rush towards friction-free trade, facilitated through 5G, on the other.   “In the toolbox conclusions,” says the Commission, “Member States agreed to strengthen security requirements, to assess the risk profiles of suppliers, to apply relevant restrictions for suppliers considered to be high risk including necessary exclusions for key assets considered as critical and sensitive (such as the core network functions), and to have strategies in place to ensure the diversification of vendors.”   According to my understanding of the WTO rules, the legality of that decision would seem, at best, uncertain.   In fact, the agreement on the WTO worried some, especially on the political left.   The late Alex Falconer, a Glasgow Labour MEP so far to the left that he had a poster of Lenin on his wall, stopped me by the lift in the European Parliament, red in the face and poking me in the chest with an angry finger, to warn that it meant, as he put it, that “all the big political decisions in the future will be taken in the board rooms of corporations, behind closed doors.   It’s the end of democracy,” he said.  In a way, this current dispute suggests that politics is still trying to play a part, however clumsily.

At least the EU hasn’t opted for the strident style of Robert O’Brien, US Security advisor, in talking about Chinese tech companies. “They are just going to steal wholesale state secrets,” he told journalists, upon learning that the UK government has opted to go ahead with letting Huawei supply its 5G hardware, albeit only in ‘peripheral’ areas, “whether they are the UK’s nuclear secrets or secrets from MI6 or MI5.”   It all seems somewhat overblown, more akin to the plot of a ‘Mission Impossible’ movie than the real world, in which countries exchange goods for money.   But O’Brien remains worried. “It is somewhat shocking to us,” he says, “that folks in the UK would look at Huawei as some sort of a commercial decision.  5G is a national security decision.”   The lawyers Michel Petite and Thomas Voland of the legal firm Clifford Chance, pointed out in an article for Frankurter Allgemeine Zeitung (FAZ) that the US has not managed to produce any evidence of wrongdoing by Huawei, ZTE or any other Chinese tech firm.  “The network operators are critical of strict restrictions,” they wrote in the article. “The company Telefónica recently emphasized that there are no known risks specific to the hardware of certain manufacturers.”   The lawyers have concerns about the legality of moves to exclude Chinese companies, too: “As long as no concrete misconduct can be proven to a company, it is doubtful whether restrictions or even a ban on its products are in accordance with international law.”

In fact, US policy may do long-term damage to its own interests.   By preventing US companies from supplying components to Huawei, Washington has obliged the company to research ways of filling the gap with products it has designed and manufactured itself, creating a spur to Chinese research and development.   Huawei has had a manufacturing and research presence in Europe for more than twenty years and it claims that just 30% of the components in its products come from China. Given that its competitors similarly have bases in other countries, including the United States, the idea of a ban based on ‘place of origin’ would seem not only illegal but impractical, too.   It would be difficult to ban 30% of a product.

Abraham Liu, Huawei’s Chief Representative to the EU Institutions

Abraham Liu, Huawei’s chief representative to the EU institutions

In any case, Huawei has said many times that it sees itself having a European future.   “Huawei is more committed to Europe than ever before,” said Abraham Liu, Huawei’s Chief Representative to the EU Institutions.   He was speaking at a big event in Brussels to mark Chinese New Year.  “We are looking forward to our next 20 years here. That’s why we have decided we want to set up manufacturing bases in Europe – so that we can truly have 5G for Europe made in Europe.”   The European Union, meanwhile, has its ‘toolbox’ and it also has the NIS Cooperation Group, which was created by the 2016 Directive on Security of Network and Information systems (the NIS Directive) to ensure strategic cooperation and the exchange of information among EU Member States in cybersecurity.   The NIS Cooperation Group comprises representatives of the EU Member States, the European Commission and the EU Agency for cybersecurity (ENISA).   In an article in Europe Diplomatic Magazine, T. Kingsley Brooks wrote “Huawei has a long track record of European involvement.   Huawei opened its first research facility in Europe in 2000, with a handful of employees in Stockholm. Now it employs over 13,300 staff and runs two regional centres and 23 research establishments in 12 EU countries   It also has R&D&I (research, development and innovation) partnerships with 150 European universities.”

Why does it matter so much?   Because 5G is the future - at least, for now.   It will undoubtedly be overtaken at some future time (is anyone working on 6G yet?) but no-one can afford to be left behind, which is why Britain has decided, somewhat controversially, to accept Huawei into creating its 5G network.   There is an old adage: “Whoever owns the platform, owns the customer.” This race to be the first to establish technological platforms and lock-in their customers is increasingly becoming politicized.  According to 5G Security’s website, “The potential economic gains from 5G development and deployment, the civilization’s likely future dependence on 5G, and 5G’s potential use for military applications make it a prime candidate for political influence.”   But it’s not going to happen overnight; in some places, even 4G has not been fully rolled out.   According to the GSM Association (GSMA) trade group, about 1.2 billion people – 460 million in China alone – will have access to 5G networks by 2025. The pace of network implementation will only increase after that.   According to its own website, “The GSMA represents the interests of mobile operators worldwide, uniting more than 750 operators with almost 400 companies in the broader mobile ecosystem, including handset and device makers, software companies, equipment providers and internet companies, as well as organisations in adjacent industry sectors.”

At the moment, of course, the world is somewhat distracted by the corona virus pandemic.   Its tragic effect has been felt right across the world and it is likely to impinge on how we live our lives for several months to come.   But even in the face of this tragedy, 5G has a rôle to play.   For instance, the specially-constructed Huoshenshan emergency field hospital at Wuhan was the first in the world with a remote consultation platform, using a gigabit network, backed up with 5G.  Huawei created a system that allowed doctors in Wuhan to consult quickly with experts in Beijing.   Artificial intelligence (AI) assisted diagnosis allowed a patient’s illness to be diagnosed in ten seconds, with confirmation by a doctor in two minutes and a printed report in thirty seconds: six times faster than conducting the process manually.   The system has been deployed in twenty hospitals in China.   Similarly, using AI at a call centre allowed 372 people at high risk to be detected within ninety-nine minutes.   The same task performed manually would have taken 4,800 minutes, according to Huawei.   A similar system has been put to use sifting through more than 8,500 existing drugs to check if they might help in fighting COVID-19.

The rôle technology, including 5G, may have in helping during the covid-19 outbreak was raised during an on-air debate organised by Debating Europe.   One of those taking part, Pearse O’Donohue, Director of Future Networks at the European Commission, said “technology, specifically digital technology, is a key component of our collective efforts to tackle the pandemic.” He admitted that we do not yet have full access to 5G, although it will undoubtedly play a bigger part in future.   Meanwhile, existing technology has an important short-term rôle in tracing, diagnosing and supporting treatment, among other things.  Abraham Liu, Huawei’s Chief Representative to the EU institutions, agrees, believing that technology will play an increasingly vital rôle.   “Overall,” he said, “I think we should take technology as a force for good.”   He also feels that 5G will prove invaluable for restoring the economy to health when the crisis is over.   “Many people may have lost their jobs,” he said, “and maybe many people are going to have to start again in business and in work.   We need people to be able to have the best connectivity available.   5G, if you talk about high speed broadband, has the best potential.”   As far as I can see, the only concern over 5G concerns weather forecasting.     It transmits at 24 gigahertz, which can overlap with the 23.8 GHz signal emitted naturally by atmospheric water vapour.  It is this vapour that is monitored by the weather instruments of satellites in Earth orbit, possibly making it harder to predict storm systems, and possibly making forecasts less accurate.   But that could be a storm in a teacup.

There are fears that this crisis will highlight the fact that some parts of Europe are not well connected, leaving what’s called a ‘digital divide’ between those with access to the Internet and those without.   “This is an issue that we have to address, that we have to wake up to,” said O’Donohue, “It’s a wake-up call at a national but particularly at European level.”   Greek Socialist MEP Eva Kaili agrees: “I think it is pushing a lot of governments to understand that we should have everybody connected or have the option to be connected.”   As we struggle to get over the effects of lock-down, that is undoubtedly important, if the policymakers can stop arguing and get on with it.  Huawei is providing fill-in masts to link more people, says Liu.   “Based on solar power, microwaves, with a simple pole,” he explained, “and at very low cost.   We are making some efforts on this, and other industrial operators are working on it, too, and that will help.”   Technology has thrown up another problem, however: the wish of some governments to track the movements of infected people and those at high risk run into EU data privacy laws.

China has always surprised visitors from the West, just as it is now surprising westerners in their home countries with its incredible technology.   During the Yuan dynasty towards the end of the 13th century, the Venetian Marco Polo travelled there.   He was so overwhelmed that he tended to exaggerate, stating that Suzhou had 6,000 stone bridges (he called it the ‘Venice of the East’) and that the city of Hangzhou, which would soon become the capital under the Southern Song dynasty, possessed 1.6-million houses.   It seems unlikely he had counted them and it earned him the nickname back home of ‘il Milione’ - Mr. Millions - which was also the name readers jokingly gave to his book, The Travels of Marco Polo, when it was published in 1300.   Not everyone believed a word of it.  In fact, though, Marco Polo may have overstated things a little but it’s clear he thought China a very special place.  It undoubtedly is.   Its history is very long and complicated, even if the Great Wall is not - as some have claimed - visible from space and 2,000 years old.   For much of its existence it has not even been a single country under a single dynasty; boundaries moved.   But it has been incredibly inventive; quite apart from gunpowder (not initially used as a weapon) its soldiers were using crossbows almost a thousand years before they turned up in Europe.   The ancient Chinese people, before 1,000 BC, had many gods but didn’t credit them with creation, according to John Keay, in his excellent book, ‘China - a History’.   “Instead of creation myths,” he explains, “China’s history begins with inception myths and in place of a creator it has a ‘happening situation’.   Suggestive of a scientific reaction, part black hole, part Big Bang, this was known as the Great Beginning.”  Or so it is described in the third-century BC ‘Huainanzi’, Keay says.

China is an industrious and inventive nation, whatever Washington’s view of its political complexion and however much that view influences (or seeks to influence) other western powers, including the EU.   Abraham Liu has described America’s attitude as “politically motivated suspicion”.   So let’s get a few things clear: 5G is coming, even if it hasn’t reached you yet.  It will be essential for the working of the so-called ‘Internet of Things’ (IoT), linking inanimate objects so that they can be controlled from afar, almost certainly by AI, which will rely on 5G in other ways.   I’m still nervous about something that could, theoretically and if hacked by a hostile user, turn off my lights, turn up the hi-fi and unlock the cat flap when it’s supposed to record a television programme.  Any country that wants to keep up with the global shift in technology will be obliged to use it.   As for restricting Huawei to the periphery, the idea has been dismissed by Janka Oertel, a senior policy fellow at the European Council on Foreign Relations and Director of its Asia Programme: “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.”    One of these days, we’ll all get used to the idea of 5G and we’ll take for granted its manifold capabilities.   That’s about the time 6G will come along.

Digital economy

#DigitalServicesAct, #DigitalMarketsAct - Time for our democracy to catch up with technology, says Margrethe Vestager at EESC plenary

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The European Commission's forthcoming initiatives to regulate digital services and markets will ensure that providers take responsibility for the services they offer and that digital giants do not impose their own rules on Europe's markets, said Commission executive vice-president Margrethe Vestager.

The European Commission's Digital Services Act and the Digital Markets Act, expected to be released shortly, will help European democracy catch up with the last twenty years of digital development, defining how digital services should be provided and digital markets work, said Vestager yesterday (3 December) to the European Economic and Social Committee's plenary during a debate on A Europe fit for the digital age.

EESC President Christa Schweng stressed that the digital transition has become more important than ever as one of the two building blocks of Europe's recovery from the COVID-19 crisis, together with the green transition.

The EESC president quoted a recent study which estimated that by 2030 the cumulative additional GDP contribution of new digital technologies could amount to EUR 2.2 trillion in the EU – the equivalent of Spain's and the Netherlands's combined GDP for 2019.

Schweng said: "We need a European, human-centred approach to digitalization. Without the trust of the citizens and businesses we will not be able to seize the opportunities offered by digitalisation. To that end, it's important to build a genuine European Dataspace where our data is protected and privacy and self-determination are ensured. We also need to build EU technological sovereignty while maintaining global digital trade."

Vestager outlined the key elements of the Commission's digital strategy, its focus on leveraging private investment, its reliance on flagship initiatives (on digital skills, digital public services and cybersecurity) and the building and deploying of digital capacities.

"Now the Digital Services Act will make sure that digital service providers take responsibility and are accountable for the services they provide and that trust can be rebuilt," said Vestager. "Illegal online content and products which do not live up to the rules that we have for physical products are the problem. Both should be fixed, and should be fixed on a European scale."

"The Digital Markets Act", she went on to remark, "will say to giant companies: you are more than welcome to do business in Europe, you are more than welcome to be successful, but there is a list of do's and don'ts when you reach that gatekeeper position in order for fair competition to be there and serve consumers in the best possible manner. The fundamental point here is that the market should serve us as consumers and that we want technology that we can truly trust."

Stefano Mallia, president of the EESC Employers' Group, said: "European employers strongly support the key goal of restoring Europe's digital sovereignty. It is our firm view that investing in digitalisation is the best way for the EU and its member states to come out of the current economic hardship, support the recovery and create new jobs."

He voiced the business community's backing for the Commission's goal of over €20 billion annual investment in AI over the next decade, and quoted a newly published McKinsey study showing that, although just a quarter of businesses globally are reporting bottom-line impact from the use of AI, that impact seems to be coming mainly from the generation of new revenue rather than cost reduction – a finding worth exploring in talks between the Commission, the business community and trade unions.

Oliver Röpke, president of the EESC Workers' Group, said: "As workers' representatives, we are convinced that digitalisation is an opportunity beyond the current pandemic to have better jobs and working conditions. However, clear and fair rules are needed to prevent digital platforms from circumventing legislation and creating a smartphone version of 19th century capitalism. To ensure that we can fully profit from the enormous potential of digitalisation, we must fully involve the social partners through a clear framework with workers' information, consultation and participation rights enshrined at all levels."

He also said that finding fair and effective ways of taxing the digital economy was a fundamental blueprint to ensure proper redistribution of wealth as new technologies developed and robotisation spread.

Seamus Boland, president of the EESC Diversity Europe Group, stressed that the pandemic had both revealed and precipitated the digitalisation of our lives and at the same time brought to the fore the plight of people who did not know how to use the technology.

"Digitalization must be completed in a way that is fair and that brings everybody with it," he said.  "It is my firm belief that Europe will successfully manage the transformation into the digital age if we build on our strengths and on our values. All eyes are on Europe to lead that way, so that EU regulations become the global standard. So it is not just about making 'Europe fit for the digital age', it is also about making the 'digital age fit for Europe and the world'."

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New EU rules: Digitalisation to improve access to justice

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Cross-border videoconferencing and safer and easier document exchange: learn how new EU rules for digitalising justice will benefit people and firms. On 23 November, Parliament adopted two proposals aimed at modernizing justice systems in the EU, which will help to decrease delays, increase legal certainty and make access to justice cheaper and easier.

New regulations will implement several digital solutions for cross-border taking of evidence and service of documents with the aim of making cooperation between national courts in different EU countries more efficient.

Endorsing distance communication technologies will lower costs and help evidence to be taken quicker. For example, to hear a person in a cross-border proceeding, videoconferencing can be used instead of requiring a physical presence.

A decentralized IT system that brings together national systems will be established so that documents can be exchanged electronically in a faster and more secure way. The new rules include additional provisions to protect data and privacy when documents are transmitted and evidence is being taken.

The regulations help simplify procedures and offer legal certainty to people and businesses, which will encourage them to engage in international transactions, thereby not only strengthening democracy but also the EU's  internal market.

The two proposals update existing EU regulations on service of documents and taking of evidence to ensure they make the mosrt of modern digital solutions.

They are part of the EU's efforts to help digitise justice systems. While in some countries, digital solutions have already proved effective, cross-border judicial proceedings still take place mostly on paper. EU aims to improve cooperation at EU level to help people and businesses and preserve the ability of law enforcement to protect people effectively.

The COVID-19 crisis has created many problems for the judicial system: there have been delays of in-person hearings and of cross-border serving of judicial documents; inabilities to obtain in-person legal aid; and the expiry of deadlines due to delays. At the same time, the rising number of insolvency cases and layoffs due to the pandemic make the courts’ work even more critical.

The proposals enter into force 20 days following their publication in the EU's official journal.

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Commission proposes measures to boost data sharing and support European data spaces

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Today (25 November), the Commission is presenting the Data Governance Act, the first deliverable under the data strategy adopted in February. The Regulation will facilitate data sharing across the EU and between sectors to create wealth for society, increase control and trust of both citizens and companies regarding their data, and offer an alternative European model to data handling practice of major tech platforms.

The amount of data generated by public bodies, businesses and citizens is constantly growing. It is expected to multiply by five between 2018 and 2025. These new rules will allow this data to be harnessed and will pave the way for sectoral European data spaces to benefit society, citizens and companies. In the Commission’s data strategy of February this year, nine such data spaces have been proposed, ranging from industry to energy, and from health to the European Green Deal. They will, for example, contribute to the green transition by improving the management of energy consumption, make delivery of personalized medicine a reality, and facilitate access to public services.

Follow the press conference by Executive Vice President Vestager and Commissioner Breton live on EbS.

More information is available online

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