European Commission's "Made in Europe" Initiative Sparks Controversy

The European Commission's proposal to establish a "Made in Europe" preference in public procurement is generating significant lobbying efforts from both EU member states and foreign partners. This initiative aims to prioritize products manufactured within the EU in public contracts, primarily as a response to competition from China and the United States. The Industrial Accelerator Act (IAA), which is expected to define the criteria for "made in Europe," has faced delays, with its presentation now scheduled for February 26, 2026.

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The leaked draft of the IAA outlines specific sectors targeted for this European preference, including chemicals, automotive, artificial intelligence, and space technologies. Proposed EU-origin thresholds include 70% for electric vehicles (EVs), 25% for aluminum, and 30% for plastics used in windows and doors. The Commission's strategy has drawn criticism for being protectionist, with several member states advocating for a more flexible definition of "made in Europe" to maintain access for allied countries.

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The initiative has prompted mixed reactions within the EU. Nordic and Baltic states have expressed concerns that a stringent "made in Europe" policy could deter investment and limit access to advanced technologies from non-EU countries. Meanwhile, the UK has voiced apprehension about potential protectionism, emphasizing the intertwined nature of EU and UK economies. UK Chancellor Rachel Reeves highlighted that nearly half of British trade is with the EU, underscoring the importance of maintaining open markets.

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Critics, including economists and think tanks, have raised alarms about the potential negative impacts of the "Made in Europe" requirements. A commentary from the Bruegel think tank warned that such regulations could increase costs for export-oriented industries and hinder Europe's industrial transformation and clean energy transition. Mario Draghi, a prominent figure in European competitiveness discussions, cautioned against imposing "Made in EU" policies in sectors where European manufacturers lag, such as solar technology, arguing that it could impede decarbonization efforts.

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Stéphane Séjourné, the EU industry chief overseeing the IAA, acknowledged the significant shift in Europe's economic doctrine that the European preference entails, indicating that reaching a consensus will require time and effort. The Trade Directorate-General, traditionally a proponent of an open market, is also under pressure to reconsider its stance in light of the proposed changes.

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As the European Commission prepares to present the IAA, the debate surrounding the "Made in Europe" initiative is expected to intensify, particularly in the lead-up to the EU summit focused on competitiveness in March 2026. The outcome of this initiative could have lasting implications for EU industrial policy and international trade relations.

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• “It is therefore no surprises that it takes time and efforts to get to a common and smart version,” — Stéphane Séjourné, EU Industry Chief

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• “For some technologies, like solar panels, foreign producers are so far ahead that attempting to capture production in Europe would only slow decarbonisation,” — Mario Draghi, Former European Central Bank Chief

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