EU capitals clash over 'Made in Europe' definition as China competition looms

Key points

• The Industrial Accelerator Act, proposed by the European Commission in March 2026, seeks to give preferential treatment to European products in public contracts for sectors like steel, cars, and green technology.
• France, led by Industry Minister Sébastien Martin, insists that public funding must support production within the EU's 27 member states, explicitly excluding the UK and other non-EU partners.
• Germany, via Minister Katherina Reiche, pushes for a 'Made with Europe' approach that includes countries with free-trade agreements, customs unions, or reciprocal access, potentially covering up to 80 nations.
• Spain has introduced a compromise proposal featuring a three-tier system: the EU core, trusted partners like the EEA, and countries with trade agreements, with the possibility of status upgrades.
• Ireland, holding the rotating Council presidency, aims to broker a compromise by December, though the legislative timeline is at risk of slipping due to unresolved disagreements.

Background

The debate follows the European Commission's March 2026 unveiling of the Industrial Accelerator Act, designed to bolster European manufacturing against state-subsidized Chinese competitors. The issue gained urgency after European Commission President Ursula von der Leyen proposed granting Canada 'associate' member status during her State of the Union speech, highlighting the bloc's desire for closer ties with non-EU partners. The dispute also intersects with the UK's attempt to reset relations with Brussels, as Prime Minister Andy Burnham has prioritized securing a favorable status for British firms in the new procurement rules.

How outlets are covering it

Outlets highlight the sharp divergence between EU powers. Euronews and Politico emphasize the fundamental split between France's protectionist stance and Germany's open-market approach, noting that no other member state has formally signed onto Germany's position paper. The Guardian focuses on the UK's anxiety, reporting that British officials fear being 'collateral damage' and that the EU's internal deadlock complicates the timing of a UK-EU summit. The Financial Times notes that the debate extends to the phaseout of combustion engines, with France offering flexibility on that issue if a strict 'Made in Europe' definition is adopted. All sources agree that the legislative process is stalling, with the Commission's ambition to pass the law this year looking increasingly unrealistic.

Why it matters

The outcome will determine the competitive landscape for European industries in critical sectors like electric vehicles and renewable energy. A broad definition could allow Chinese companies to circumvent the rules via third-country investments, while a strict definition risks alienating key allies like the UK and Canada. The decision will also shape the EU's future industrial policy, moving away from traditional free-trade ideology toward a more strategic, protectionist framework.

What to watch

Ireland plans to convene a discussion of deputy ambassadors on October 7 and present a new compromise by mid-October, aiming for a final deal in November. The European Parliament is scheduled to discuss its draft report on September 28, with amendments due by October 7. The UK-EU reset summit, postponed after Keir Starmer's resignation, is expected to take place in November, though EU officials have cautioned that they cannot pre-empt the outcome of the legislative process.