Key facts
- UK government sources fear EU legislation, the "Made in Europe" Industrial Accelerator Act, could derail planned reset talks with the bloc.
- The legislation aims to curb China's industrial presence but prioritizes EU suppliers, potentially excluding British businesses.
- The UK is seeking to include discussions on the "Made in Europe" act in upcoming reset negotiations.
- France is pushing for the legislation to be passed by year-end, while other EU states like the Netherlands, Germany, Poland, and Italy favor UK inclusion.
- A potential summit date of November 6 may be postponed due to disagreements over the "Made in Europe" act.
European legislation designed to bolster the bloc's industry and counter China's growing influence could jeopardize UK-EU reset talks, according to UK government sources. The "Made in Europe" Industrial Accelerator Act, intended to prioritize EU suppliers in key sectors like car manufacturing and defense, is a significant point of contention.
The UK fears that if its goods are not classified as European under the new law, it could lose billions of pounds in trade and be locked out of continental contracts. This concern has led the UK government to insist that the "Made in Europe" act must be on the agenda for any future reset summit.
Plans for a follow-up summit to the one held in May 2025 between former Prime Minister Keir Starmer and European Commission chief Ursula von der Leyen were initially scheduled for July but were canceled following Starmer's resignation. The current government, led by Prime Minister Andy Burnham, is seeking to reschedule the meeting, but is holding firm on including the "Made in Europe" legislation in the discussions.
France, the originator of the "Made in Europe" laws, is pushing for its passage by year-end, citing increasing competition from China. While some EU member states, including the Netherlands, Germany, Poland, and Italy, are reportedly sympathetic to the UK's inclusion, France remains unconvinced, viewing the benefits as asymmetrical. The EU diplomat noted that while there is substantial backing for UK inclusion, not all member states agree.
UK ministers are also concerned that the EU's focus may be shifting, particularly with discussions around a potential "associate membership" deal with Canada, which could deepen economic integration. This development, coupled with the potential impact on trade deals like food and drink, could have implications for the UK's budget calculations.
Meanwhile, European manufacturing bosses have warned of significant job losses unless incentives are introduced to make European products more competitive against cheaper Chinese imports. Von der Leyen, in her state of the union address, highlighted the EU's need to diversify its supply chains away from China, particularly for critical minerals.