Should Brazil Ban Huawei?

The case for banning the Chinese telecoms firm is compelling, but such a move would carry a steep cost.

My home country of Canada just announced that it would ban Huawei after coming under pressure from other members of the Five Eyes intelligence-sharing community (Australia, New Zealand, the United States, and the United Kingdom) to do so. Canada justified the banning of the telecommunications giant on concerns for national security.

Huawei has been associated with a number of scandals, including the notion that it operates as a tool for the Chinese security state to collect signals intelligence on millions (and potentially billions) of users through back channels.

Brazil just signed a collaborative Memorandum of Understanding between telecommunication giants TIM Brasil and Huawei to transform the city of Curitiba into the world’s first “5G City.” In late March, Huawei also finished building a “smart factory” that uses 5G equipment in São Paulo state.

The Jair Bolsonaro government has also considered making Huawei the largest provider of 5G networks in the country, a proposal that has been criticized strongly by the Biden administration.

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Huawei is growing its operations in Brazil, as China is attempting to pierce through U.S. influence in the country. Should Brazil reverse its policy, and follow its Western allies in banning Huawei? Let us weigh the pros and cons, starting with the arguments for banning Huawei from its telecommunications markets and 5G networks.

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Domestically, banning Huawei would serve to protect Brazilians’ privacy rights. Huawei, while it emphasizes its existence as a private, multinational company, remains under heavy regulation by the Chinese state.

In China, the relationship between the state and private businesses is highly intricate. Telecommunications and electronics companies like Huawei, which have a high degree of importance to national security and foreign policy, are given little freedom of maneuver by the Chinese Communist Party (CCP).

Huawei, in particular, has been accused multiple times of sharing user data and metadata with the CCP, and of serving the security interests of the Chinese state. Still, given China’s business environment and the new ideological war between China and the West, credible concerns remain over whether Huawei users’ data and metadata are protected.

Moreover, banning Huawei could serve as a signal to Western allies. The Five Eyes nations have decided to ban Huawei, while a great number of other Western partners, including Italy, Denmark, France, and the Czech Republic, have either restricted access to Huawei, or repeatedly expressed concerns about Huawei’s networks.

The Brazilian government moving ahead with partial restrictions or a full ban would signal Brazil’s commitment to the rules-based international order and to the coalition formed by Western countries against the People’s Republic of China, specifically on security and commercial issues.

Such a commitment made by Brazil could therefore open the door to further trade and cooperation on security issues with the West.

The Brazil ban could also create a domino effect for other bans and restrictions for Huawei and other Chinese companies, or, at the very least, help spark a conversation in Latin America over China’s growing influence in the region.

China has recently extended its infrastructure investment project, named the Belt and Road Initiative, to Latin America, and has built security partnerships with Argentina, Nicaragua, Venezuela, Cuba, and other nations.

The ban could reassure Western allies while initiating a debate with Latin American nations over Huawei in particular and Chinese foreign policy in general. Still, material benefits would need to be provided to Brazil and other Latin American countries, otherwise, the ban would be a net loss, and would alienate the country’s largest trading partner.

As was seen with other countries that banned Huawei, including the United States, Canada, and Australia, the ban could start a trade war or an intelligence conflict between the two nations. As a result, Brazilian industries, and ultimately regular Brazilians, could be hurt.

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China could increase its intelligence operations (including cyber attacks) within Brazil, spurring further great-power competition with the West, potentially causing deaths and misery reminiscent of the Cold War.

Furthermore, China has a large stake in the Brazilian economy. Beyond trade, it is looking to include Brazil in its BRI project, helping finance roads, bridges, energy projects, and other initiatives that would be necessary to propel Brazil into the first world. The same can be said of its telecommunications infrastructure.

Unless the West is willing to provide financing for these projects – which for now, nothing indicates that it would be – Brazil would stand to lose economically from the ban.

China is also building and financing the Salvador SkyRail line, electrifying the bus and metro systems in São Paulo state, helping create railroad networks in the Amazon, and supporting other public transportation projects throughout the country. Paraná state is attempting to attract Chinese investment to modernize its public transportation. China would most likely halt the projects as a result of this ban.

Huawei, despite the concerns associated with its cybersecurity infrastructure, provides cheaper products for Brazilians wanting high-quality smartphones. American, Korean, and Japanese brands are extremely expensive to import to Brazil and end up costing about double the price than in the West, despite the average Brazilian earning about three times less.

Therefore, banning or restricting Huawei access could deprive Brazilians of cheaper smartphone options, and could ultimately restrict telecommunications overall if locals are unable to afford any other brands.

One argument against the ban would be to simply let the free market run free and let Brazilians choose. If Brazilians are aware of the security concerns, they should be able to make their own decision as consumers, rather than have that decision being forced on them by their government.

Regardless of whether or not Brazil should ban or restrict Huawei, the chances of such a policy being pursued are incredibly slim.

China’s economic and security influence in Brazil has grown considerably over the past decade. The two countries are too economically, financially, and commercially intertwined for the Huawei ban to be viable. Unless the West makes very significant changes in policy towards the region, leaning more heavily on economic statecraft rather than security cooperation, the growing Brazil-China interdependency dynamic will not stop.

While there are legitimate reasons for Brazil to ban or restrict Huawei, it is unlikely that it will do so, given the economic losses it would incur as a result.