Brazil Caught in the Web of Huawei Dilemma

As the United States continues to mount pressure on its allies, in an unprecedented move to immobilize Huawei’s aim to lead the global 5G roll out, some countries have been caught in the web of its dilemma.

Brazil has been under the pressure of Washington to kick the Chinese telecom giant out. Being the biggest telecom market in South America and the second largest economy in America after the US, Brazil is a country of interest for both China and the United States.

Caught in between the tussle of the superpowers, Brazil is weighing its choices carefully.

The US ambassador to Brazil, Todd Chapman had in June offered to pay for Brazil’s 5G infrastructures if it would disengage Huawei.

Toward the end of July, Chapman warned Brazil in an interview with a local news tabloid O Globo, that there will be “consequences” if it allows Huawei or other companies targeted by Trump to build its 5G network.

But the warning, more like a threat, did not go unanswered. SCMP reported that Brazilian vice president; Hamilton Mourao said during a videoconference with foreign correspondents on august 3, in São Paulo, that Huawei would not be banned from participating in the bid for Brazil’s 5G roll out scheduled for 2021.

“Huawei has capacity above its competitors and we do not yet see US companies capable of defeating international competition,” he said.

Mourao has been vocal in his defense of the Chinese companies targeted by Trump, part of his reasons stem from the US’ own doing.

But while he is a staunch believer in the Chinese companies, other members of Brazilian President, Jair Bolsonaro’s cabinet hold different views. Brazilian newspaper, Folha de Sao Paulo reported in June that the foreign minister, Araujo had told Bolsonaro that Huawei should be banned from the 5G network bid, according to SCMP.

The contradicting views of cabinet members has divided the government’s disposition on the matter, pushing analysts to conclude that there is a schism.

“There is an ideological wing, like Araujo, that is completely hostile to China and a more pragmatic, military wing, like Mourao, but I think the president’s own wish is to not let Huawei participate,” said felipe Zmoginski, CEO of Inovasia Consulting in Sao Paulo.

The US attack on Huawei and other Chinese companies has been based on national security concerns. Huawei and others had come under intense scrutiny over their relationship with the Chinese government and how they handle users’ data.

The concern has centered on the ability of Chinese government to use tech companies to spy on other countries, or harvest private data of users.

But Zmoginski has called the US concern hypocritical, citing the documents leaked by American whistle-blower Edward Snowden in 2013, which exposed the US National Security Agency for spying on former Brazilian President, Dilma Roussef, and wiretapping executives of Brazilian oil conglomerate Petrobras.

The 2013 leaks have become a basis for Zmoginski, who worked for Baidu, a Chinese technology company, and other analysts, including some members of the Brazilian cabinet, to question the United States’ attempt to stop Huawei. The exposed spying on other countries is the US’ doing that has brought its morality into question as it pressures other countries to shun China.

However, the US is winning as more countries are joining the anti-China sentiment by cutting ties with Chinese tech companies. Australia, Canada, the United Kingdom and France have kicked Huawei out of their 5G roll out, and some others are still contemplating it. Lawmakers from the Japanese ruling party are reportedly pushing to have TikTok banned, following the lead of the United States.

While some of these countries can afford to jump the US bandwagon, it came at a high cost to others. SCMP reported a source at Gabriel, a Rio de Janeiro-based start-up that provides high-tech surveillance services, saying that Brazil would suffer “unilateral damage” if they move against China by cutting Huawei off from its 5G technology.

Huawei is responsible for much of the telecom infrastructure in Brazil, including the 4G, and has plans to invest more in the country. Moreover, Brazil’s security challenges have drawn her close to China. With its high rate of drug trafficking, carjacking, and kidnappings, and homicide, the country has been looking up to China for help.

“There is a tendency for developing countries like Brazil to trade some privacy for more real freedom in the form of security, just like in China. The idea of privacy and liberty above all else is a very American ideal,” the source said.

While the privacy issue matters to the Brazilian government, its citizens’ lives matter more. Gabriel is counting on Chinese technology to provide surveillance cameras across Rio de Janeiro, and Brazil’s hope to confront many of its challenges with technology is in China.

There is growing confidence in Chinese companies in Brazil, based on the reputation they have built over the years. former Brazil’s ambassador to China, who served from 2016 to 2018, Marcos Caramuru de Paiva, explained that in addition to their essence, Chinese companies have not been found wanting, and the US’ fears of back door in Huawei technology does not apply to Brazil because the country “does not hold industrial secret.” But he added that China has always followed the rules and the areas of concern are regulated.

“I don’t see any vulnerabilities, but if something does happen, these areas are highly regulated, there has to be a permanent dialogue, and the Chinese enter following our rules,” he said.

Brazil’s consumers have been won over by Chinese products that they may find it difficult doing without them. App analytics platform, Sensor Tower said Brazil is the fastest growing market for TikTok. Between January and July this year, the app recorded 62.4 million downloads, a 957% increase compared to the same period last year, which makes it more popular than Facebook and WhatsApp in Brazil.

For the average person in Brazil, safety and affordable products are worth more than trust.

“The average Brazilian might not trust the Chinese but will buy a Xiaomi phone without a second thought. I can’t see a scenario where Chinese technology would be banned in Brazil,” said the source from Gabriel.

The decision on whether to shut Huawei out of Brazil’s 5G deployment or not hangs on the above realities; for the US, it’s all about national security, but for Brazil, it involves a scope of other things that equally matter.