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Don’t tell us what to do Portugal tells US in China trade row

 In Business, Companies, Diplomacy, Exports, News

The Portuguese Government has issued a polite but stern rebuttal to the United States that it will not bow to pressure over its economic and foreign policy concerning China.

In response to a featured interview in the newspaper Expresso with the US ambassador to Portugal, George E. Glass, Portugal’s foreign minister Augusto Santos Silva said that the decision-making process in Portugal belongs to the Portuguese Government and it will not bow to US pressure over adopting Chinese Huawei 5G technology.
In the Expresso interview published over the weekend, the ambassador urged that: “Portugal choose between its friends and allies and China.”
But Augusto Santos Silva told the Portuguese news agency Lusa that, “In Portugal, the decision-makers are the Portuguese authorities, which decide which are Portugal’s interests, within the framework of the Constitution and Portuguese law.”
“The decisions taken in Portugal are made in accordance with democratic and humanistic values, Portuguese values, in accordance with Portugal’s national interests, in accordance with the conciliation process at European Union level, when this process is relevant and within the system of alliances in which Portugal is integrated, which is well known and unwavering,” he added.
Portugal has drawn ever closer to China over the past 10 years after the Chinese government through proxy private companies bought up significant shares in some key Portuguese companies in the energy, banking, health and insurance sectors at a time when Portugal desperately needed overseas foreign investment after the last economic crisis between 2007 and 2014.
This closeness is in part down to Portugal’s historic trading ties with China which stretch back centuries and is best represented by its governance of the island of Macau of mainland China which was returned to Chinese rule in 1999.
However, in July this year Portugal’s attitude to China was spelled out by a leading Portuguese diplomat who addressed key businessmen and managers about ‘Bilateral Relations and the New Phase of the Strategic Partnership’ organised by the Chinese-Portuguese Chamber of Commerce (CCILC).
José Augusto Duarte said that Portugal’s relationship with China “is broader than Macau and cannot be a book of nostalgia.”
That said, there still exists mountains of red tape when it comes to “easing customs barriers” for Portuguese exports passing through Macau to mainland China with double taxation and customs barriers.
And despite the balance of trade between the two countries being weighted overwhelmingly in favour of China, Portugal’s trade with China has increased significantly in recent years.
In the first quarter of this year, the weight of n Portuguese agri-food exports to total exports to China increased 255% compared to the same period in 2019.
Portuguese companies are already allowed to export pork, aquatic products, dairy products, table grapes, low risk agri-food goods such as olive oil, wine and honey.
Duarte stated that several negotiation processes are in progress between Portugal and China to allow the export of beef, poultry, sheep and pears and citrus products.
“We must not be afraid to go to this market [of 1.4 billion consumers]. We have to overcome difficulties, and it is desirable and healthy for a balanced relationship,” José Augusto Duarte stressed.
But there are policy makers in the US who feel that Portugal wants to have its cake and eat it regarding maintaining good economic relations with China and the United Sates, particularly when its comes to exchanges of services and technology which could provide a strategic advantage to China against the United States which is now currently Portugal’s 5th largest export partner (5%) after export markets like Germany (12%), France (13%), the UK (6.1%) and Spain (24.9%).
However, it is in the technology area and more specifically in the telecoms sector that Ambassador Glass is said to be most concerned.
In the Expresso interview he said that the US would prefer that Portugal would not acquire any 5G equipment from Huawei, stressing that if the Chinese company brings the 5G  technology to Portugal, the defence agreements between Portugal and the United States could be affected.
He warned of consequences for Portugal choosing to work with China which, he said, could influence NATO’s activity or the exchange of classified information. He further threatened to end the distribution of natural gas through Sines if the construction of the new terminal is delivered to China which views Sines as a crucial part of its One Road One Belt economic policy.
Asked whether Ambassador Glass’s statements could be considered an interference in Portuguese internal affairs, Santos Silva argued that he did not, evoking the “good relations” between Portugal and the United States.
“We are part of the EU, NATO, the West, we have privileged relationships with Africa, with Latin America, with different regions in Asia and so on, acknowledge by our allies. And they know that we are allies at all times, not on occasion. We are reliable and credible allies,” Santo silva said.
Ambassador Glass also admitted that the United States has been working with Portugal to “guide” foreign investment in the country into reducing the weight of Chinese investment in the county.
In telecommunications, 5G is the fifth generation technology standard for cellular networks, which cellular phone companies began deploying worldwide in 2019, the planned successor to the 4G networks which provide connectivity to most current cell phones.
China Portugal relations  can be traced back all the way to 1514 during the Ming Dynasty of China. Relations between the modern political entities of the People’s Republic of China and the Portuguese Republic officially began on 2 February 1979. China and Portugal established the comprehensive strategic partnership in 2005.


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