Made in Europe Clause Divides EU and UK Allies.
A car assembled in Germany may contain cells, chips, and steel that were made somewhere else entirely.
Public money in Europe — subsidies, public contracts — may soon be allowed to favour only products that clear a new origin test. What counts as “made in Europe” is the entire story.
The policy is still under negotiation. It aims to shield European companies from intense and, in the EU’s framing, unfair state-subsidised competition from China. The concrete instrument is the Industrial Accelerator Act, or IAA.
The IAA would require authorities spending public money to favour European products in sectors such as renewable technologies and electric cars. The expectation baked into it is simple: European public money should build European industrial capacity.
UK Prime Minister Andy Burnham raised the plans with European Commission president Ursula von der Leyen on the sidelines of the UN general assembly earlier this week. His government fears British companies risk being collateral damage. Resolving it has become one of his top priorities for the EU-UK relationship.
The mechanism here is not interest rates. It is regulation acting as a demand filter.
That is why the definitional fight is charged. At a meeting of EU industry ministers in Brussels on Thursday, France pushed for a narrow reading, starting with the EU27. “European taxpayers’ money should support [European] workers and European factories,” French industry minister Sebastien Martin told reporters. [1] Asked about the UK, he noted that Britain had chosen to leave the European Union. He added that this does not prevent trade or sectoral agreements, but that some chose the European project and some decided to leave.
France’s Europe minister, Benjamin Haddad, speaking in London, offered little comfort either. Asked about pushing like-minded partners away, he said that without membership of the internal market, and without contributing to its financial capacity, third countries do not get the same kind of protection.
Germany wants the opposite. Its economic affairs minister, Katherina Reiche, argued for a broader “Made with Europe” approach including the UK and other allies. Her formulation: reduce unilateral and critical dependencies, but do not isolate from the rest of the world. Partner countries should be included in the union-origin principle, in general and on condition of reciprocity.
That draws broad support from Nordic countries, which traditionally favour open trade. Sweden’s outgoing deputy prime minister, Ebba Busch, who leads on business policy, said “we always miss the Brits.” [1] Sweden wants balance, she added, given that some European countries sit outside the EU yet remain essential to a functioning European market.
The Republic of Ireland, chairing EU ministerial negotiations, hopes for agreement in December between the EU Council and the European parliament on the IAA, including the Made in Europe provisions. Ireland’s enterprise minister, Peter Burke, acknowledged divergent views on the act, on European preference, and on working with trusted partners and third countries. He called it difficult but said a pathway is in sight.
Poland’s economic development minister, Michal Baranowski, said it is too early to say whether Switzerland, the UK, Japan, Australia and Canada end up in or out, and that all of them are in the mix of the discussion. The UK should have clarity once the act passes. His summary of the timeline is worth keeping: “We are in the last stretch, but this last stretch might take a while.” [1]
Who wins and who loses therefore depends on a clause. Germany and the Nordics read the origin test as a tool for building a wider European industrial base; France reads it as a tool for directing European money to European factories.
One asymmetry deserves naming. The policy’s stated target is China, but its hardest practical question is where the line falls among Europe’s own neighbours.
Then there is the calendar. The EU-UK reset summit was postponed when Keir Starmer stood down as prime minister. Since Burnham took office, no date has been fixed for talks originally meant to happen this year.
By December, the EU is expected to be consumed by negotiations on its next seven-year budget, which will absorb its leaders’ bandwidth.
What we watch next is narrow. First, the wording of the union-origin principle and whether “trusted partners” or “reciprocity” survives the December text. Second, the summit date, and whether the UK ties its diplomacy to a deadline the EU cannot meet.
Uncertainty should be stated plainly. No agreement exists yet, no definition is fixed, and Poland’s “last stretch” has no published end date. A December deal could slip into budget season and lose its slot.
The realisation available right now is modest but useful: the clause that decides who counts as European will be written in December, and the UK’s place in it is still an open question.
Sources
1. PubMed/NCBI (Original laut Text: Bloomberg) — Quote source (study)
Mentioned organisations (context, not sources)
- European Union — Organisation (homepage)
- European Commission — Organisation (homepage)
- United Nations General Assembly — Organisation (homepage)