Jun 11, 2021
Biden Prods UAE to Dump Huawei, Sowing Doubts on Key F-35 Sale
(Bloomberg) -- The Biden administration is pressing the United Arab Emirates to remove China’s Huawei Technologies Co. from its telecommunications network and take other steps to distance itself from Beijing, raising the risk that the country’s purchase of some $23 billion in F-35 jets and drones may be at stake, people familiar with the matter said.
The U.S. is asking the UAE to remove Huawei equipment from its networks within the next four years -- before it’s scheduled to get the F-35 in 2026 or 2027 -- but Emirati officials have countered that they’d need longer plus an alternative that’s as affordable, according to three of the people, who spoke on condition of anonymity to discuss private negotiations. The conversations have turned in part on the feasibility of obtaining alternative equipment from Samsung Electronics Co., Ericsson AB or Nokia Oyj.
The dispute over the UAE’s use of Huawei has simmered since the Trump administration, when U.S. officials unsuccessfully tried to persuade the Emirates -- a crucial ally in a turbulent region -- to reverse a push for stronger military and economic ties with China, which is seeking increased influence in the Middle East.
Several people familiar with the situation said Trump administration officials had initially persuaded Emirati officials to replace Huawei and preempt any Chinese plans for bases in the region. But the Emiratis insisted on more ambiguous language in a deal that was concluded in the waning hours of Donald Trump’s presidency.
President Joe Biden announced a review of the F-35 sale when he came into office. The sale is proceeding for now, but people familiar with the matter said the differences over what the U.S. and UAE agreed to -- on Huawei and other concerns about Chinese technology -- are sufficiently serious that there’s still no guarantee the Emirates will ever get the advanced fighter jet made by Lockheed Martin Corp.
The situation provides an early indication that the Biden administration will pursue the Trump team’s effort to press allies to ban Huawei, China’s biggest tech firm, from new 5G systems on the argument that the equipment could be used to spy for the Chinese government. China has denied that’s a possibility.
U.S. officials declined to say publicly if they had demanded that UAE remove and replace Huawei.
“The Biden-Harris administration views 5G security as a high priority,” Stephen Anderson, acting deputy assistant secretary of state for international communications and information policy, said in a statement. “The United States is working with allies and partners to support a diverse supply chain of trustworthy telecommunications equipment and services.”
A person familiar with the UAE negotiating position, who asked not to be identified discussing private deliberations, said the country understands the importance of protecting sensitive technology. The person said the talks have made good progress and there’s plenty of time to work out the technical details.
China’s Foreign Ministry said in a statement that “we share the view that China-UAE cooperation serves the common interests of both sides and benefits the two peoples” and that “it has nothing to do with and does not tolerate interference by third parties.”
The situation is reminiscent of a U.S. standoff with Turkey, which the Pentagon cut off as a buyer and parts supplier for the F-35 after President Recep Tayyip Erdogan bought a missile defense system from Russia as he deepened his ties with that U.S. adversary.
Similarly, the UAE has sought to nurture its longtime alliance with the U.S. while also cultivating closer economic and security ties with China as a hedge against waning American involvement in the region. Emirati leaders are also unnerved by the Biden administration’s desire to return to the Iran nuclear accord that Trump abandoned in 2018. China, along with other world powers, is engaged in negotiations to restore the deal.
For the U.S., the balance is delicate: The UAE plays an important role in the region and was a leading mover behind the Abraham Accords that normalized ties with Israel. But pressuring Emirati leaders too much over Huawei risks pushing the UAE -- and other nations -- further into China’s arms.
The expanding relationship with China “makes the U.S. government nervous, but it’s too late to turn that back,” Karen Young, a senior fellow at the Middle East Institute, said of the UAE. “I don’t think they’ll ever be buddy-buddy, and China will never be a security guarantor for for the Gulf, but they are useful.”
The Biden administration’s ultimate decision on the F-35 wouldn’t necessarily have to be made before his current term ends in 2024. Among the considerations: Although the jet’s communications networks are considered relatively safe from Chinese eavesdropping, Huawei’s presence in the Emirates’ commercial networks could potentially allow China to spy on pilots, contractors and others at the bases where the F-35 would be located.
The U.S. is also worried that China could steal technology for U.S. drones that would be part of the sale.
Leading figures in the Emirates haven’t publicly challenged the U.S. over its demands to remove Huawei, but they have made clear their dissatisfaction with the U.S. demand given that American officials still haven’t offered a viable alternative. China was the UAE’s top trade partner in 2020 with $53.67 billion in total trade, more than double what it had with the U.S.
Huawei is the UAE’s partner company for rolling out its 5G network in a deal announced in 2019. At the time UAE telecom operator Etisalat said Huawei would build 300 5G towers in six months, ahead of Dubai hosting Expo 2020. Last year Huawei posted a chief security officer to the UAE, saying it would work with the Gulf state on cyber security and setting up smart cities -- urban areas that collect data using electronic methods, local media reported.
“We need to be able to test and experiment with technologies with everyone and decide what’s really the most useful and safe and commercial for us,” Khaldoon Al Mubarak, the chief executive of Abu Dhabi wealth fund Mubadala Investment Co. -- and the UAE president’s special envoy to China -- told former U.S. Treasury Secretary Hank Paulson on his podcast “Straight Talk” on May 28. Any replacement has to be “a competitive alternative, not just from a price perspective but also from a technology perspective,” he said.
Past writings of current Biden administration officials suggest skepticism toward the UAE’s ability to protect U.S. technology and toward any promises it might make not to deploy American weaponry in conflicts the U.S. opposes, such as in Libya or Yemen.
Dana Stroul, who’s now deputy assistant secretary of defense for the Middle East, and Barbara Leaf, a former ambassador to the UAE who Biden has nominated as assistant secretary of state for Near Eastern Affairs, highlighted those concerns in an article in “War on the Rocks” last year.
“The divergent policies of the United States and United Arab Emirates — including use of military force, conduct in combat and utilization of U.S. defense articles — should be considered as part of the F-35 deliberations,” they wrote.
Analysts say the UAE isn’t looking to replace or replicate its relationship with the U.S.. but its leaders there see a strategic alignment with the Chinese model, with its focus on economic and technological development, and the stability of its political system -- particularly after the turmoil in the U.S. and the dramatic changes in U.S. foreign policy that accompanied the switch from former President Barack Obama to Trump, and now to Biden.
“The UAE’s relationship with China is about more than the technology,” said Jonathan Fulton, senior fellow at the Atlantic Council and a specialist in China-Gulf relations. “It is really about what they see as a reliable long-term partner.”
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