Serbia’s 5G deal with Washington: The art of muddling through

The long list of commitments signed by the leaders of Serbia and Kosovo at the White House on 4 September includes several pledges that are related not to the dialogue between Belgrade and Pristina but to the wider geopolitical interests of the Trump administration. One is a commitment by both parties to prohibit the use of 5G equipment from “untrusted vendors”, or to remove such equipment if it is already in place. While there is no direct reference to China or Huawei in this clause, they were clearly Washington’s target, as it used the Serbia-Kosovo negotiations to continue its long-running campaign against the company in Europe.

The 5G clause immediately created speculation about the impact of the agreement on Serbia’s relationship with China. (This is not an issue with Kosovo, as China’s non-recognition of the country means that they barely have a relationship.) While it would be premature to talk about a Serbian pivot away from Huawei (let alone China), the 5G story allows for an interesting thought exercise in mapping out what would happen if Serbian President Aleksandar Vucic was serious about keeping his promises to Washington.

If this was the case, Serbia’s policy on 5G would provide him with an easy way to demonstrate his commitment. This is because Vucic’s political party, Srpska napredna stranka (SNS), fully controls the parliament – and will fully control the government, once it forms. There are two ways for Serbia to meet its 5G pledge to the US. One is to follow the path taken by Estonia, Poland, and Romania, which – alongside the Czech Republic and Slovenia – signed individual Memorandums of Understanding (MoUs) with the United States committing to exclude high-risk vendors from the construction of its 5G networks. Estonia, Poland, and Romania have already started translating these agreements into domestic legislation, placing legal restrictions on these vendors in 5G infrastructure. Given SNS’s absolute control over Serbia’s parliament, he could quickly pass legislation that prevented high-risk vendors from supplying the country’s two private telecoms operators.

It would require even less effort to stop Huawei from supplying state-owned company Telecom Serbia. By virtue of state ownership, the government can rewrite Telecom Serbia’s list of suppliers through direct preferential procurement and thereby exclude Huawei. This approach is at the core of Vietnam’s future strategy for rolling out 5G. Unofficially, the Serbian government had taken the opposite approach: there is an informal understanding between Belgrade and Beijing that Huawei will be the main partner of Telecom Serbia for the installation of 5G infrastructure. And, just as importantly, Telecom Serbia and Huawei signed in 2017 a strategic agreement for the ongoing installation of fixed broadband infrastructure.

While it would be premature to talk about a Serbian pivot away from Huawei (let alone China), the 5G story allows for an interesting thought exercise in mapping out what would happen if Serbian President Aleksandar Vucic was serious about keeping his promises to Washington.

Finally, given that its relationship with Serbia covers a dense set of mutually beneficial relations, one could even imagine China tolerating Serbia’s decision to allow, say, Ericsson (rather than Huawei) to build Serbian 5G infrastructure. As Huawei’s facial recognition cameras are not part of the agreement signed in Washington, the relevant contract between the Serbian Ministry of Interior and Huawei will likely remain in place – and these devices may proliferate in Serbia as the country sinks deeper into a one-party system.

There are plenty of reasons to believe that Serbian government will not act soon to replace existing Huawei equipment or exclude the company from future 5G bids, particularly given that it has sufficient leeway to ignore the provision. Even wealthier countries in the EU have chosen not to rip out and replace this infrastructure, due to the cost of doing so. Instead, they have committed to phasing it out. Key components in radio access networks have an average lifespan of around five years, meaning they need to be regularly replaced in any case. The United Kingdom, for instance, has committed to phasing Huawei equipment out by 2027.

Vucic’s intentions are reflected in a change in the agreement between its first draft and the signed document: the deletion of a clause that set a five-year deadline for removing 5G equipment from untrusted vendors. This suggests that the Serbian side does not want to be bound by specific deadlines and is instead buying time to see what will happen with the deal.

Furthermore, while the lack of a direct reference to Huawei as an untrusted vendor leaves room for interpretation, so do the MoUs signed between the US and five EU member states, none of which refer to the firm by name. In the end, domestic interests and external incentives will determine whether governments translate such agreements into concrete steps.

Unsurprisingly, the three countries that are most advanced in implementing their MoUs – Estonia, Poland, and Romania – perceive Russia as a threat, are members of NATO, and feel dependent on US security guarantees. This is not the case for Serbia, which has traditionally nurtured friendly relations with Russia and a public discourse of criticising NATO due to its bombing of Serbia in 1999. Therefore, it is unsurprising that, just a few days after returning to Belgrade, members of the Serbian delegation stated that the 5G provision had nothing to do with Huawei per se.

Finally, the Serbian president will not willingly turn his back on a relationship from which he draws a great deal of political capital, and which he has skilfully used to build the image of a leader who turns both westwards and eastwards: negotiating with the United States and the European Union while courting China and Russia as powerful allies. Chinese investments allow the president to portray himself as the mover and shaker behind employment and infrastructure projects in Serbia. And China is one of the rare subjects on which the Serbian political opposition sides with the president.

Therefore, the key question is: what is the incentive structure that will make Serbia take the 5G commitment seriously? At the moment, it is non-existent. For all the talk about the importance of getting the US involved to push the negotiations forward, the current US administration does not have a great deal of leverage in Serbia, in contrast to Kosovo. Exercising effective leverage in Serbia requires a carefully thought-out strategy based on familiarity with key actors and their preferences –and implemented in coordination with the Europeans. Furthermore, in the absence of a consensus among key EU member states on a common 5G policy, the incentive structure to persuade Serbia to move away from its commitments to Huawei will remain weak. Until there is a transatlantic consensus and a joint strategy are in place, the Serbian side will delay decisions and muddle through. 

Judging by the sloppiness with which the Washington agreements were put together in the first place, it is safe to assume that there will not be substantial follow-up from Washington prior to the election. And, should Joe Biden become president, Vucic may be caught out. One can expect a Biden administration to be more thorough and strategic in pushing Huawei out of the EU, and in coordinating more effectively with America’s European allies to make this happen.

Stefan Vladisavljev is a Programme Coordinator at the Belgrade Fund for Political Excellence.