China hits out at US over Huawei blacklisting at WTO meeting

James Politi

Financial Times

China has lashed out at the US over its blacklisting of Huawei, accusing it of abusing national security exceptions to global trade rules during a tense meeting at the World Trade Organization. The confrontation in Geneva on Tuesday highlighted the extent to which President Donald Trump’s move to commercially isolate Huawei by placing it on an export blacklist has further inflamed trade tensions between the countries and complicated hopes of a deal to end their trade war. According to a trade official based in Geneva, China introduced a discussion of the Huawei ban at a meeting of the WTO’s market access committee under “other business” — then proceeded to attack the Trump administration’s move. The representative from Beijing then accused the US of violating WTO rules by proceeding with the action against Huawei, and said Washington should “immediately lift all unilateral sanction measures against Chinese companies”. China widened its argument to say that the US was unfairly claiming national security exceptions across the board, saying it had caused “great concern in the membership” of the WTO. Since Mr Trump took office, the US has invoked national security concerns to impose tariffs on steel and aluminium imports, and threatened to do the same with automotive levies. During the confrontation, the Chinese official went as far as citing a quote from the US delegation negotiating postwar trading rules in 1947 — warning that there was “great danger of having too wide an exception that would permit anything under the sun”. The US trade representative’s office did not immediately respond to a request for comment. A trade official in Geneva said at the meeting that the US declined to mount a strong defence since the item was not on the ordinary agenda and instead simply directed officials to look at official US government notices about the Huawei ban. The US moved ahead with the blacklisting of Huawei this month after the company was charged with stealing trade secrets and violating US sanctions. National security officials from at least three different administrations in Washington have believed for years that the company was a vehicle for Chinese espionage. The placement of Huawei on the so-called entity list is a major challenge for the company because it means US businesses — including chipmakers and software providers — cannot sell to it without obtaining a licence from the US commerce department. Last week, before leaving for a trip to Tokyo, Mr Trump appeared to soften his line on Huawei, saying that while it was a “very dangerous” company from a “security standpoint”, it could be “included” in a trade deal with China. However, it is far from clear that key members of his administration, including Robert Lighthizer, the US trade representative, share that view. Recommended Trade Secrets Has Trump reached point of no return on Huawei? China’s complaints about the US violating WTO rules by pressing ahead with export controls on Huawei are likely to fall on deaf ears within the Trump administration, which views the Geneva-based trade body with suspicion. Officials in Washington have accused the WTO of failing to police China’s violations of WTO rules since its accession in 2001, particularly when it comes to Beijing’s rampant use of industrial subsidies. The US has also clamoured for reform of the WTO, but so far little progress has been made in negotiating an overhaul with other countries. While the chances of an agreement to end the trade dispute between the US and China have dwindled, the two countries have not ruled out a meeting between Mr Trump and Xi Jinping, the Chinese president, at the G20 summit in Osaka, Japan, next month. Mr Trump insisted that the US was “not ready” for a deal yet with China, but one could still come in the future.