EU's 'Made in Europe' plan could upend UK's 'EU Reset' initiative: BCC

The 'EU Reset' is a UK Labour government initiative launched in 2024 to mend relations with the EU after Brexit, focusing on a new strategic partnership, security and economic cooperation. It seeks to reduce trade friction, enhance defence and tackle migration without returning to the single market, customs union or freedom of movement.

The EU is currently pursuing a ‘Made in Europe’ agenda that aims at protecting its industries from unfair international competition due to subsidies and tariffs. The EU’s Anti-Coercion Instrument, its so called ‘trade bazooka’, is one aspect of this.

But among new proposals it is considering are content rules that mean up to 70 per cent of the components in the goods it makes must be of EU origin. It is also looking at new rules on sustainability, capping foreign direct investment and procurement.

As the United Kingdom is now a third country supplier, this could squeeze British firms out of supply chains, increasing costs and bureaucracy, BCC said in a release.

The next step in the proposals is the introduction of the Industrial Accelerator Act, expected soon.

“There is a continuing debate between EU members as to how far it should push its Made In Europe agenda. But if a more extreme version is enacted, it would have a chilling effect on cross-border trade and cause chaos for EU based producers reliant on UK parts and components,” said William Bain, BCC’s head of trade policy.

“The UK government is very much alive to this danger and dialogue is on-going, but this issue is not yet on the radar of enough firms, and its seriousness cannot be underestimated,” he noted.

“We would urge British companies to start speaking to their EU customers about this to make the case for continued supply chain integration and find out where they stand,” he added.

Fibre2Fashion News Desk (DS)