France has dropped its opposition to the UK being included in the EU’s “Made in Europe” legislation as long as the British government aligns with the bloc’s position over tariffs on Chinese EVs. France on Thursday came round to backing Germany, which has always supported the UK’s calls to be designated European for the purposes of the Industrial Accelerator Act. The legislation, which is in its draft stage, is designed to protect domestic manufacturing from cheap Chinese competition.
According to a joint Franco-German paper seen by the Guardian, the two countries are now proposing that for the car industry specifically the UK could be included in Made in Europe. It would also include Norway, which is in the single market but not a member of the EU. The paper added that the opt-in would come with conditions, including alignment on trade defence measures, which have included tariffs on Chinese EVs imposed by the EU in 2024 and any future trade barriers, such as the quota deal being finalised with China on its exports of hybrid cars.
The paper says that “as well as relevant anti-circumvention measures”, these “opt-in” countries would have to accept “dynamic alignment on the EU’s conditions related to third countries’ investments and on relevant EU trade defence measures”. Liam Byrne, the chair of the UK’s business, innovation, science and trade committee, said he believed aligning with the EU on trade defence measures was a small price to pay to save British manufacturing. Locking the UK out of the EU’s flagship industrial Made in Europe legislation would amount to a “deliberate choice” by EU leaders to “hurt” the car industry across the bloc, the head of Mercedes-Benz said.
The UK has been under pressure for weeks to align with the EU on tariffs on Chinese vehicles, but this week the business secretary Jonathan Reynolds said he would not be coerced into aligning with the EU’s policy. However the government has been desperate to be included in the Made in Europe package, fearing billions of pounds of trade in the car industry could be lost if the UK was locked out of supply chains in the EU. Earlier on Thursday trade minister Anas Sarwar hinted that the UK was minded to align on tariffs.
He told Politico the UK and the EU must “work together and act in lockstep” to tackle China’s dominance in the automotive sector. Bernd Lange, the chair of the European Parliament’s influential international trade committee, told the Guardian the UK should “of course” be included in the Made in Europe legislation, calling France’s opposition “not rational”. A Downing Street spokesperson said it had yet to see the detail but saw the development as positive.
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