by N. Peter Kramer
Trade Commissioner Karel De Gucht has threatened to open a formal investigation into alleged state-subsidies to Huawei and ZTE, two Chinese telecom companies. A secret internal EU report recommended such an action as the two companies are challenging European companies. It would be a highly unusual step because no European company has initiated a complaint against either Chinese company. It seems that one of the biggest European telecom companies even asked De Gucht not to pursue action.
When the Flemish-Belgian Commissioner looked for backing of the EU trade ministers in a recent meeting in Dublin, the result was not positive for him. Germany, the UK, the Scandinavian member states, The Netherlands and others opposed De Gucht’s initiative for legal action, although there was a Mediterranean alliance that backed the proposal: France, Spain, Portugal, Italy, Greece, Cyprus and Malta… (When and where did we see this combination before?).
This week, it says, the subject is on the agenda of the weekly meeting of the European Commissioners as De Gucht seeks political backing by his colleagues now the member states are divided. The role of President José Manuel Barroso will be crucial, but so far his position in the case is not clear. Officially De Gucht doesn’t need any political support to start action. Pushing the button is his own responsibility.
‘Brussels’ knows that the EU-China relationship has deteriorated in the last two years. And it is possible that if De Gucht does go ahead with his action against the two Chinese telecom companies, China may likely retaliate. In the new Chinese government, Gao Hucheng has been in charge of the Trade Ministry for only a few weeks; perhaps he is looking for an opportunity to show that he is the right choice for the job.
But you never know with Karel, as the Belgians can tell you…
By: N. Peter Kramer
