British Government may have to follow US with restrictions against Huawei

Hong Kong China Huawei

The US administration’s plan to restrict American companies from selling products to Huawei could compel Britain to levy the same restrictions on UK businesses, the government was told yesterday.

Washington is moving to add the Chinese telecoms giant to an “entity list”, which would require US companies to obtain a licence to sell products to Huawei.

A former senior director for strategy to President Trump has declared that the US move could prompt the UK to follow suit, under an international agreement on export controls on sensitive technologies, to which both nations are signed up.

Brigadier-General Robert Spalding told The Times that under the terms of the Wassenaar arrangement, its 42 member states are “obliged to send a report to the rest of the members on companies they have deemed a national security risk, in terms of exporting dual-use technology or military technology”. He emphasised that “typically the countries have honoured that in terms of also putting those companies on their [restricted export] lists”.

While the arrangement is not a treaty and therefore not legally binding, he stressed that he expected the UK and US “alignment between our economic and security relationships” would hold on the issue of Huawei.

The plan by the US commerce department to place Huawei on its entity list could have far-ranging consequences for the company. The restriction on US semiconductors, which dominate the global market, could harm Huawei’s production of network equipment, including 5G base stations and mobile phones.

Scott Kennedy, a China expert at the Centre for Strategic and International Studies, told Bloomberg: “This could potentially lead to Huawei’s destruction.” He said that there would also be a significant response from the Chinese government. “The bilateral trade talks were on thin ice and this could derail them entirely.”

Huawei has plans to spend £3 billion buying technology, intellectual property and services from the UK over five years, it was reported last year. On Wednesday night Mr Trump declared a national emergency to protect communications networks, giving the US government powers to ban companies from dealing with certain suppliers.

The executive order was signed as the US puts pressure on western allies to abandon Huawei in 5G projects. Sir Richard Dearlove, the former MI6 chief, said in a report that the UK government’s strategy to include Huawei in non-sensitive parts of its next-generation mobile network was a risk “we simply do not need to take”.