Huawei Sanctions Raise Complex Questions For The Caribbean

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By David Jessop

News
Americas, LONDON, England, Fri. May 31, 2019:
Although normally advised by a
small number of able civil servants and ambassadors, the pressure that senior
politicians personally experience can be acute, particularly when they must
make choices affecting national security or a country’s international
relations.

For small states such as those in the
Caribbean, such decisions require a high degree of subtlety if the region’s
diverse development, trade, investment and security interests are to remain
balanced and driven by national interests.

Despite the positive and important nature
of the region’s long standing and close functional ties with the US, the
region’s political and diplomatic skills are likely to be exhaustively tested
as the region seeks to manage its future relationship with both Washington and
Beijing.

This is because China and the US now
appear to be moving beyond skirmishing over trade towards what could very
easily become an economic war.

As has been widely reported, the White
House has been rapidly escalating its tariffs on Chinese goods in the belief
that such measures will slow China’s rise to equivalent superpower status, and
a related wish to protect the US economy.

On May 15, however, the US took a step
that has much broader implications. It decided to invoke national security to
add the Chinese telecommunications giant Huawei to an ‘entity list’ which
requires US companies to obtain a license before being able to trade with it.

The decision, unless reversed, is expected over time to halt the sale of Huawei mobile devices and equipment and cut off access from users of Huawei phones to apps including Gmail and YouTube. More importantly, it seeks to predetermine who will provide the next generation of 5G mobile internet services that will vastly improve everything from streaming to financial transactions.


As
such, the measure has far reaching consequences restricting other nations
choice of technology as they and their providers upgrade their
telecommunications systems.

Already the decision has
caused Google and others to stop supplying Huawei with Android software, and
others to halt the sale of microchips and components in order to meet US
government requirements: steps that will have far reaching effects on third
country governments and consumers alike.

The decision has shocked
US tech companies, threatening to divide the global technology world and cause
consumers everywhere to have little choice but to decide with which operating
system and supplier their future lies. It may also have an indirect effect on
tourism destinations attractiveness as many if not most western visitors expect
to be able to access internet services though devices using Android operating
systems.

Some think the US
decision, the implementation of which has been delayed for three months, might
be an escalation intended to add to the pressure placed on China to reach a new
trade agreement.

Others are not so sure.
They cite comments by the US Commerce Secretary, Wilbur Ross, in which he said
that the sanctions will enable the US “to determine the appropriate long-term
measures for Americans and foreign telecommunications providers that currently
rely on Huawei equipment for critical services “.

The Huawei decision
attempts to draw a line of fundamental historic importance. It marks the start
of an economic and technology led cold war that for political, historical,
cultural, and economic reasons, China could well assess it no longer has any
wish to avoid.

China has time on its
side because of its political system, still growing military strength, broad
based investments and trade relations, especially with the developing world.
This and its commitment to multilateralism, means that it has many more
political and trade options open to it as it seeks to become a global
technological power at least equivalent to that of the US.

It is therefore hard to
escape the view that unless the US and China can find a way to accommodate each
other and deescalate, every country that has sought a positive relationship
with both superpowers may have to find new ways to navigate the increasingly
dangerous waters between the two.

For the Caribbean this is
particularly complicated as not only is it geographically proximate to the US,
but the rupture is occurring just as the region is hoping to broaden its future
investment and trade relationship with Washington.

As the CARICOM Secretary
General, Irwin LaRocque, noted recently, the region wants the US to extend the
World Trade Organization, (WTO) waiver for the Caribbean Basin Trade
Partnership Act 3, (CBTPA), beyond its expiry this December to allow Caribbean
goods continued non-reciprocal duty-free access to the US market.

Moreover, CARICOM already
has in place a detailed understanding with the US on security providing for a
wide range of regional initiatives on everything from addressing organized
crime to information exchange and addressing terrorism, has an understanding on
how US might help build a Caribbean resilience partnership around disaster risk
reduction and response, and is developing new energy initiatives.

Despite this, most of the
region also wants a positive and close relationship with China, ideally of the
‘second generation’ kind that is now developing rapidly with the Dominican
Republic. In the short time since relations were established in 2018, Dominican
exports to China quadrupled to US$180m in the first quarter of this year, high
level business exchanges on major infrastructural and private sector investment
have taken place, discussions have begun on tourism and possibly direct
flights, and there are unconfirmed reports that President Xi may visit.

How transactional the US
intends to be when it comes to negotiating new trade deals with the Caribbean
remains to be seen, but the selection of a limited number of Caribbean Heads to
attend the Mar-a-Lago meeting with President Trump in March and recent
statements on relations with China, Venezuela and Cuba by John Bolton, his
National Security Adviser, do not bode well.

In the coming months, Caribbean leaders will have to balance the region’s development needs, the huge sums China has for infrastructure and investment, with the importance of maintaining a close relationship with the US.

All of which suggests they will require something more than the wisdom of Solomon.
David- Jessop

EDITOR’S NOTE: David Jessop is a consultant to the Caribbean Council and can be contacted at david.jessop@caribbean-council.org Previous columns can be found at www.caribbean-council.org.

The post Huawei Sanctions Raise Complex Questions For The Caribbean appeared first on Caribbean and Latin America Daily News.

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