The European Union's ongoing push to ban China's Huawei Technologies Co. from its member nations' 5G networks is an example of the bloc's de-risking strategy, rather than decoupling from China, and South Korea is Europe's key partner to ensure supply chain resilience, the EU's top industry chief has said.
Last month, Thierry Breton, EU Commissioner for Internal Market, urged more EU member nations to ban the Chinese tech giant from their 5G telecoms networks, saying such a major dependence will pose risks to the bloc's collective security.
Under its 2021 guidelines, the EU urged its 27 member states to restrict or ban high-risk 5G vendors from core parts of their telecoms networks, and 10 of them have taken steps, which Breton earlier complained were "too slow."
"With Huawei, for example, we may have some security issues. So we don't want to have any telecoms using its 5G. But, of course, Huawei is totally welcomed for any other services in Europe. That's the difference between decoupling and de-risking," Breton said in an interview with Yonhap News Agency and several other media outlets in Seoul on Friday.
He was in Seoul for talks on ways to enhance bilateral cooperation on the digital sector, advanced industries and supply chains amid growing global uncertainties.
"Our strategy was not at all being decoupled from China, but it was to de-risk some areas where we may have too many single-source dependencies," Breton said, stressing that China "is and will continue to be an important commercial partner."
The official called on "like minded partners" to align on issues regarding economic security in order to de-risk supply chains, and South Korea is "one of the EU's key allies in this regard."
During a summit session in Brussels on Friday (local time), EU leaders again committed to reducing the bloc's dependence on China and debated how to strike a balance between de-risking and cooperating in such areas as climate change.
Speaking of the EU's Critical Raw Materials Act (CRMA), Breton said the proposed act is far from protectionist as it is meant to achieve the goal of diversification and should not be seen as imposing caps.
Under the CRMA, at least 40 percent of the critical raw materials the EU needs each year, such as copper and nickel, should be processed within the region. It also stipulates that no more than 65 percent of the minerals come from a single third country by 2030, apparently referring to China.
"The CRMA is absolutely not discriminatory, opposite to the U.S.' Inflation Reduction Act, as it welcomes more companies in Europe and offers joint contracts in the field of critical raw materials," Breton said.
South Korea and the EU have been working together to respond to the Inflation Reduction Act, which has been criticized for discriminating against foreign entities by offering tax credits of up to US$7,500 to buyers of a new electric vehicles assembled only in North America and with batteries made up of a certain amount of critical minerals produced in the region.
"We need to avoid a subsidy race as this could potentially encourage a race to the bottom and damage international trade," Breton said.
The EU official voiced hope for more South Korean battery makers, solar panel firms and other businesses to expand their presence in Europe by maximizing chances available under the CRMA, the EU Chips Act, the Net-Zero Industry Act and other acts, saying they offer "very favorable conditions."
"South Korea is a global leader in new technologies, such as semiconductors, batteries, mobile phones and displays, and a natural partner for the EU's most advanced companies," Breton said. "I am convinced more than ever that South Korean industry can also play a key role with European industry in accelerating our green and digital transition."
While in South Korea, Breton met with Samsung Electronics Executive Chairman Lee Jae-yong and senior officials of Hanwha Aerospace.
During the meeting with Breton in Seoul on Thursday, South Korea's Trade Minister Ahn Duk-geun stressed that a series of the EU's recent industry rules should be applied in a fair manner to non-EU companies.
The EU is South Korea's third largest trading partner after China and the United States. In 2022, the two-way trade reached an all-time high of $136.3 billion, according to Seoul government data.
Source: Yonhap News Agency