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Europe Daily Bulletin No. 12180
Contents Publication in full By article 13 / 41
SECTORAL POLICIES / Industry

Huawei case raises question of EU's industrial strategy

Several EU Member States such as France, Germany and Poland have initiated an internal review on the ability of Europeans to deploy innovative technologies such as the 5G network by limiting the contribution of third-country players, such as the Chinese giant Huawei, accused by some of acting as a Trojan horse by using its strategic position for surveillance or espionage purposes on behalf of Beijing. 

At this stage, these thoughts on Europe's independence in the area of future technologies have not been officially taken up at European level in order to define a common approach to this identified risk. 

However, according to expert opinion, if evidence corroborates the accusations made, the European Union, which developed a roadmap for the deployment of the 5G network (see EUROPE 11918) at the end of 2017, will have to consider whether it would be appropriate to restrict the purchase of equipment from operators considered unreliable, for public security reasons, at least on the most sensitive part of the network. 

An unanswered Parliamentary question. Two months ago, in a context of high tension over international trade, MEP Franck Proust (EPP, France) asked the European Commission about the recommendation made by the United States to its allies to ban Huawei from participating in the deployment of future 5G networks on their territory. He also asked what its response would be if several Member States decided to exclude Huawei from their 5G deployment programmes. 

With this parliamentary question, which remains unanswered to date, Mr Proust, who was Parliament rapporteur on the instrument to filter investments in the EU from third countries (see EUROPE 12141), also intends to raise the question of the EU's industrial strategy once again. This represents a major question according to him: should we buy European or resign ourselves to buying American or Chinese? And what would be the consequences of not choosing? 

Adopted in mid-December, a declaration by eighteen Member States calls on the EU to “adopt a comprehensive vision of its industrial policy, in order to strengthen its strategic autonomy and address key challenges ahead, such as the transition to a digital and [...] low-carbon economy” (see EUROPE 12162). 

Guarantees of the public procurement directives. When questioned by EUROPE, Lucia Caudet recalled, on behalf of the Commission, that in the field of 'traditional' public procurement (Directive 2014/24/EC) and 'special sectors' (Directive 2014/25), European rules do not make any distinction between operators established in the EU or from third countries. 

Nevertheless, European legislation has introduced the following guarantees: (1) contracting authorities may reject tenders that are unjustifiably low; (2) for the utilities sectors (water, energy, transport, postal services), tenders may be rejected for the award of a supply contract where the proportion of products originating from countries with which the Union has not concluded an agreement ensuring comparable and effective access to the markets of those countries exceeds 50% of the value of the products constituting the tender (Article 85); (3) the Defence Procurement Directive (2009/81/EC) allows Member States to decide whether an economic operator from a third country may participate in a call for tenders for the procurement of electronic equipment or equipment affecting national security. 

In addition, bilateral or international agreements governing public procurement to which the EU is a party allow for the adoption of measures to protect its essential security interests in the procurement of defence equipment, Caudet stressed. 

It remains to be seen whether the deployment of the 5G network falls within the scope of these safeguard measures and whether the Member States, or even the EU, are prepared to take advantage of these measures. (Original version in French by Mathieu Bion)

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