France has lifted its opposition to the inclusion of the United Kingdom in the European Union’s “Made in Europe” legislation, contingent on alignment with EU policies regarding tariffs on Chinese electric vehicles (EVs). This decision, announced on Thursday, comes as France aligns its stance with Germany, which has consistently supported UK participation in the Industrial Accelerator Act aimed at protecting domestic manufacturing from cheap Chinese imports.
A joint Franco-German document outlines that the UK could be included in the “Made in Europe” designation for the automotive industry. It states, “For the automotive sector, ‘Made in Europe’ should comprise the EU27 and an opt-in to further include European partners who were part of the EU single market as of 01/01/2020, subject to an agreement on full reciprocity.” This provision references the UK’s status as a member of the single market before its departure from the EU.
The proposal also extends the opt-in opportunity to Norway, which, while not an EU member, is part of the single market. Conditions for this opt-in include adherence to trade defense measures, specifically the tariffs on Chinese EVs beginning in 2024, and any other emerging trade barriers, such as ongoing negotiations with China regarding hybrid car export quotas.
Further stipulations require included countries to accept “dynamic alignment on the EU’s conditions related to third countries’ investments” and relevant trade defense measures. UK officials have stated that complying with EU trade defense policies is a necessary compromise to protect British manufacturing. Liam Byrne, chair of the UK’s business, innovation, science, and trade committee, emphasized the importance of aligning with Europe to safeguard jobs within the supply chain. “Tariffs on these [Chinese EVs] would be a small price to pay for the protection of a European manufacturing industry,” he remarked.
On Wednesday, Ola Källenius, CEO of Mercedes-Benz, urged EU leaders to support the UK’s inclusion in the initiative, claiming that excluding the UK would deliberately harm the European automotive industry. Despite pressures, UK Business Secretary Jonathan Reynolds reiterated earlier this week that he would not be pressured into following EU tariff policies. However, trade minister Anas Sarwar indicated on Thursday that the UK is inclined to align with these tariffs in light of the competitive landscape dominated by China.
Bernd Lange, chair of the European Parliament’s international trade committee, asserted that the UK should indeed be included in the “Made in Europe” legislation, deeming France’s prior opposition “not rational.” Meanwhile, a spokesperson for Downing Street expressed tentative optimism about the new proposal, noting that while the specifics are still pending, the inclusion of the UK would benefit the British automotive sector and the jobs it generates.
