The European Union unveiled new "Made in Europe" rules on Wednesday, aimed at bolstering the bloc's industries against fierce competition from China. The proposal, formally known as the Industrial Accelerator Act, covers strategic sectors including cars, green technology, and steel, and forms a key part of the EU's drive to regain its competitive edge, reduce dependencies, and stave off job losses.
The plans had been held up for months by disagreements over whether the rules were too protectionist. "What I am presenting to you today is more than just a change in operating procedures; it is a change in doctrine, one that was unthinkable just a few months ago," said EU industry chief Stephane Sejourne.
Broadly, the rules aim to ensure that public and foreign investments support manufacturing inside the 27-nation bloc. Companies seeking public money must meet minimum thresholds for EU-made parts, and large investments from dominant foreign firms will be subject to conditions including employing EU workers.
The European Commission said the package aims to bring manufacturing's share of EU GDP to 20 percent by 2035, up from around 14 percent in 2024. At stake are approximately 600,000 jobs that Brussels predicts could be lost over the next decade if the bloc's industrial decline continues on its current path.
Initially expected last year, the measures, strongly backed by France, were pushed back several times due to internal disagreements, with some arguing they run counter to the EU's pro-free-trade spirit. Much of the discord centred on the geographical scope of "Made in Europe."
Critics, including Germany, the EU's largest economy, argued that trade partners should be included in the definition under a "Made with Europe" approach. Brussels settled for a compromise based on the principle of reciprocity. Countries with deals allowing European companies to access public money on equal terms with local firms in the relevant sectors would be included.
Others, such as Canada, that give preference to local producers will be left out unless they change course. The rules would also be used as a trade tool to negotiate better access for EU companies abroad. A full list of which countries are in and which are out was not yet available at the time of publication. Ahead of publication, the plans had already raised concerns among foreign partners including Britain, Japan, and Turkey.
The "Made in Europe" requirements apply to strategic sectors including steel, cement, aluminium, cars, and net-zero technologies. Governments funding infrastructure projects will have to ensure they include a minimum share of European low-carbon steel, cement, and aluminium. Electric vehicle manufacturers will need to ensure that at least 70 percent of their cars' components are made in the EU in order to access public money. Similar rules will apply to batteries, solar, wind, and nuclear energy.
The proposal also aims to ensure that foreign companies partner with European firms if they want to operate within the bloc. It imposes conditions on foreign investments of over 100 million euros in emerging strategic sectors such as batteries and electric vehicles. These conditions apply when an investor comes from a country that holds more than 40 percent of related global manufacturing capacity, an implicit reference to China's dominance in those sectors.
For such projects to proceed, foreign investors must meet four of six conditions, including employing at least 50 percent EU workers, holding no more than 49 percent of the related EU company, and passing on technological know-how. An EU official, speaking on condition of anonymity, said this was designed to counter instances where Chinese firms set up European plants employing mainly Chinese workers with very little local added value.
For many, the plans are a necessary step to boost EU green technology and shield manufacturers from unfair competition from heavily subsidised Chinese rivals. Neil Makaroff of the Strategic Perspectives climate think tank said the goal was to ensure EU taxpayers' money is "used strategically to strengthen Europe's industrial base, rather than subsidising Chinese overcapacity."
Not everyone is convinced, however. "If the policy goal is to make sure that your industry is not being destroyed by China, I think we have better instruments," said Niclas Poitiers, an international trade specialist at the Bruegel think tank, pointing to existing rules giving the EU power to investigate and counteract unfair foreign subsidies. The proposal will be subject to approval by EU member states and the European Parliament.
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