The Industrial Accelerator Act, put forward by the European Commission in March, is the first EU legislative proposal to include “Made in Europe” content requirements — something long feared by industry and those outside whatever defines “Europe.” Nobody, on the inside or out, seems to agree. Let the negotiations begin.
The IAA targets strategic sectors including EV batteries, solar panels, clean technology and energy-intensive industries such as steel and aluminium. It sets a “Made in EU” preference for public contracts in those sectors, tightens screening of foreign investment exceeding €100m where a single country controls more than 40% of global production, and mandates that such investors employ at least 50% EU workers and transfer technological know-how to local partners.
The Act also creates a list of “trusted partner” countries whose goods may qualify for EU-equivalent treatment — but only if they offer reciprocal access to their own public procurement and subsidy markets. Commissioner Séjourné has suggested around 20 countries would make the cut.
That is where consensus ends.
Within the EU, France stands nearly alone in its enthusiasm. Germany, the EU market’s largest exporter and its most deindustrialised large economy, having shed nearly 10% of industrial output since the pandemic – is openly hostile. Many other member countries are sceptical or opposed, whether publicly or behind closed doors.
The Federation of German Industries called the proposal “a bureaucratic monster” and “poison” for export-oriented firms. Most other member states have raised objections, many behind closed doors. A 70-page compilation of national feedback, seen by POLITICO, showed broad scepticism, including doubts about the IAA’s target of raising manufacturing to 20% of GDP by 2035, up from 14.3% today. The Commission’s own trade department tried to water down the bill before it was published.
Around the negotiation table
Parliament will not simplify matters. The industry (ITRE) committee’s lead negotiator, Christophe Grudler, is French — and, unlike the Commission, wants a far narrower definition of “Europe.” He favours limiting preferred status to EEA countries (Iceland, Liechtenstein and Norway), with Switzerland as a strong candidate and the U.K. as a possibility, “subject to conditions.” Pierre Jouvet, a French Socialist, has been named lead for the internal market (IMCO) committee. The international trade (INTA) committee has yet to appoint its rapporteur. Two French MEPs driving a bill opposed by most member states is a coalition that will struggle to find common ground with the Council.
Are we in or out?
Outside the EU, reactions range from sceptical to furious. Canada’s industry minister Mélanie Joly has asked to be included in the scheme, calling for “aligned” industrial policies and a level playing field for Canadian companies. This reflects Prime Minister Carney’s broader push for middle powers to form an economic counterweight to both Washington and Beijing.
Britain’s trade secretary Peter Kyle flat-out called the IAA a “waste of energy” that risks turning Europe into a “closed shop,” and said he had found similar views in Sweden and the Czech Republic. British carmakers have warned their vehicles could become uncompetitive in the EU market.
China’s reaction was starker still. On 27 April, Beijing’s commerce ministry warned it would take “countermeasures” if Chinese companies face discrimination, saying the law undermined “basic market economy principles” (a charge that struck many observers as ironic, given China’s own decades-long requirements for foreign firms to form joint ventures and transfer technology).
More to come?
The IAA is not alone in its ambitions. The Commission is due to present a revised Chips Act II on May 27th, which will also carry domestic-content ambitions, albeit less front and centre. A new Public Procurement Act, set to be proposed on July 1st, is explicitly intended to align with the IAA’s “Made in Europe” criteria and integrate them into the EU’s broader €2.5 trillion annual procurement framework.
The political fights ahead will be substantial. EU leaders, meeting in Cyprus last week, endorsed a roadmap aiming for agreement on the IAA by the end of this year. That timeline, given all that was outlined before, looks optimistic.
