At the March 31 and April 1 meeting of the WTO's Council for Trade in Goods, for which minutes have just recently been circulated by the WTO, China raised an issue related to "concerns over Sweden's measure prohibiting China's companies from participating in Sweden's 5G construction," under which Huawei and ZTE cannot be used in new installations and must be removed from existing infrastructure. This measure was later upheld by a Swedish court when challenged by Huawei, as we reported here.

On the meeting agenda, the item was labelled "Sweden's discriminatory market access prohibition on 5g equipment." China raised the following concerns:

13.3. China would like to raise its concerns over Sweden's measure prohibiting China's companies from participating in Sweden's 5G construction. On 20 October 2020, the Swedish Post and Telecom Authority (PTS) set the licence conditions regarding the process of its 5G frequency auction, which clearly stipulate that new installations and new implementation of central functions for radio use in frequency bands must not be carried out with products from the suppliers Huawei and ZTE. In addition, the products of Huawei and ZTE in the existing infrastructure must be removed by 2025. China also takes note that the decision made by PTS has already been implemented, in January 2021, despite the relevant legal cases still ongoing in Sweden. China is deeply concerned about this measure, which China thinks is groundless, discriminatory, and inconsistent with WTO rules.

13.4. China noted that the decision of the PTS is based on the assessments made by the Swedish Armed Forces and the Swedish Security Service. However, PTS has neither disclosed the content of the assessment and relevant evidence, nor consulted or informed Huawei, ZTE, and other stakeholders before taking the decision. China is of the view that this non-transparent decision violates both WTO rules and the domestic laws and regulations of Sweden. In fact, Huawei and ZTE have been operating in Sweden for more than 20 years, and no security concerns regarding their products have ever been raised before. It is also worth noting that Ericsson's CEO has criticized Sweden's decision to ban Huawei and ZTE. He said that, "[F]or Ericsson and Sweden, we are built on free trade, [and] it is important that we have open markets and free competition".

13.5. In contrast to Sweden's discriminatory treatment towards Huawei and ZTE, China's market has always been open to Sweden's telecommunications companies, such as Ericsson. Recently, the company's CEO also said that, "[I]n China we have a larger share of 5G than we had of 4G, so that is also driving our growth". China requests Sweden to stop its erroneous practice immediately, and instead to provide a fair, transparent, and non-discriminatory environment for Chinese companies operating in Sweden.

In response, the EU delegate noted the following:

13.7. This item is on the agenda of a WTO body for the first time. The EU would like to thank China for the bilateral discussions that have taken place in Geneva prior to this meeting. The EU notes that the matter raised by China in relation to the recent Swedish 5G spectrum auction is currently subject to legal proceedings in Sweden. In light of these ongoing proceedings, the EU will not enter into details on this issue in the Council today.

On October 1, Huawei said it had filed an appeal against the June court ruling and requested an oral hearing. At the time of the WTO meeting, as the EU noted, the case had not yet been decided by the Swedish courts.