WASHINGTON-The stakes have been raised in the U.S.-China wireless trade dispute, with the Bush administration last week issuing a veiled threat about seeking redress at the World Trade Organization, and Intel Corp.-the world’s top chip-maker-declaring it will not back the Asian giant’s Wi-Fi standard.
“While some of China’s compliance initially were problems viewed as growing pains as it brought laws and regulations into line with new WTO obligations, China must do more to ensure that it is living up to obligations,” U.S. Trade Representative Robert Zoellick told the Senate Finance Committee. “Without more progress on matters we have been pressing with China, we will certainly need to avail ourselves of our rights under the WTO.”
China joined the WTO, the 164-member global trade body, in December 2001. Some U.S. business interests that previously supported the 1999 U.S.-China trade agreement are now rethinking their positions.
One of those matters is China’s homegrown Wi-Fi encryption platform, known in technical and policy circles as the Wireless Authentication and Privacy Infrastructure standard. China plans to implement the WAPI standard on June 1. U.S. government and industry leaders claim the WAPI standard-which is at odds with globally embraced Wi-Fi standards-favors Chinese firms over companies from America and elsewhere.
The Bush administration recently put Beijing on notice as to the seriousness it attaches to the matter in a letter signed by Commerce Secretary Donald Evans, Secretary of State Colin Powell and USTR’s Zoellick.
In addition to browbeating by the White House, China now has something else to think about.
Intel, whose Centrino Wi-Fi chip is key to its long-term business strategy, said it cannot support a standard that may be technically lacking on several levels including interoperability, deployment performance and application support.
“We want to be able to meet consumer expectations for our products,” said Chuck Mulloy, an Intel spokesman.
Mulloy said Intel has spent hundreds of millions of dollars on assembly test facilities in China. Moreover, he said, Intel exports more to China than any other country in the Asia-Pacific region.
The Bush administration must walk a fine line if it is to get tough with China, a market of 1.3 billion people and already the world’s largest mobile-phone market.
Last Tuesday, a key Senate lawmaker asked the General Accounting Office-Congress’ investigative watchdog-to review the 250 trade agreements to which the United States is a party.
Elsewhere, the Bush administration continues to negotiate with Korea over its Wireless Internet Platform for Interoperability and 2.3 GHz mobile broadband service standards that U.S. government and industry leaders say would discriminate against U.S. wireless and high-tech companies. San Diego-based Qualcomm Inc., whose CDMA technology has been adopted in South Korea, stands to lose if the WIPI standard is deployed because its BREW content downloading software would be locked out of the market.
“We all are concerned about these issues. It’s all about jobs,” said Ambassador David Gross, U.S. coordinator for international communications and information policy at the State Department.
Gross, who recently participated in bilateral talks with South Korea on wireless and other trade matters, added: “The [Korean] carriers should be making the decisions rather than having government restrict their choices.”
As for the 2.3 GHz standard, the U.S.’ ArrayComm Inc. and Flarion Technologies Inc. find themselves behind the eight ball.
Joanne Wilson, vice president of standards at ArrayComm, attended recent talks in Seoul and expressed disappointment at the lack of progress made to resolve the 2.3 GHz stalemate. “The Korean MoIC [Ministry of Information and Communications] continues to insist that they should mandate the use of a single standard, which is based on a locally developed technology, for operations at 2.3 GHz. None of its reasons for this position can stand up to scrutiny as the U.S. government representatives at the meeting clearly demonstrated. However, U.S. officials received some assurance that Korea would continue to seek a solution satisfactory to all parties. Without timely action on the part of the Korea, operators that are ready to offer portable Internet access service are forced to wait, as are customers who would be subscribers.”
