Markets 
The German government has called on the EU to open its planned “Made with Europe” rules to countries outside the bloc, according to a position paper obtained by Euronews, setting it up for a collision course with France.
Berlin is leading the push for a more open-market approach to the Industrial Accelerator Act (IAA), a draft EU law that would restrict public procurement — government contracts for goods such as steel, batteries and electric vehicles — to products and companies meeting minimum EU production requirements.
Where the Commission’s original text favours “Made in Europe”, Berlin wants “Made with Europe”: rather than requiring goods to be made in the EU, it wants the origin rules opened up to the bloc’s trade partners, as long as those countries offer the same access to European companies in return.
“Germany rejects protectionism and discrimination. In times of geopolitical and geoeconomic challenges, the EU relies on close partnerships — particularly its global network of free trade agreements — to enhance resilience and competitiveness,” reads the position paper.
Opposing visions
The document was circulated ahead of Thursday’s Competitiveness Council in Brussels, where EU industry ministers discussed industrial policy.
The initiative highlights the divide between Berlin’s open-market approach and Paris’s push to use public contracts to support European companies as they struggle with the so-called China 2.0 shock.
The same strategic divide extends beyond industrial policy to defence.
“The EU must remain a reliable partner for its free trade partners and uphold its legal obligations, compatible with the EU’s international obligations,” the document says.
Berlin wants the EU origin rules extended to countries that have signed the WTO Agreement on Government Procurement, under which members open public contracts to each other’s companies, as well as countries with a free trade agreement or customs union with the EU.
Germany argues that this would encourage partner countries to pursue ambitious trade agreements and open their own markets to European companies.
Berlin also argues that allowing more bidders into EU public procurement would drive down costs and improve quality for public authorities.
However, Berlin wants the EU to be able to react quickly if a partner country stops offering reciprocal access, through an “opt-out” mechanism allowing it to be excluded from the scheme.
Reciprocity
“This ensures a level playing field on a reciprocal basis and creates an incentive to keep markets open to one another,” the paper argues, adding that the Commission should first try to resolve any dispute through existing settlement mechanisms.
“If a partner country is under an obligation to treat EU companies equally (national treatment) in public procurement or in relation to support measures, and if these obligations are not met, access to EU procurement markets and support programmes should also be withheld,” it continues.
Berlin backs a recent compromise brokered by Ireland, which holds the rotating EU Council presidency, to task the Commission with adding or removing third countries from the scheme via secondary legislation, but wants clearer criteria for how those decisions are made.
“To determine, without red tape, whether certain products from specific countries fall under the ‘Made with EU’ approach, the European Commission should draw up a product-specific list of countries or tools,” the document adds.
Such a list would give businesses and public authorities clarity over which products meet the origin rules, rather than requiring them to carry out their own checks.
Berlin argues that this approach would also better serve one of the IAA’s main goals: diversifying supply chains and reducing dependence on critical inputs, such as batteries, that the EU cannot yet produce at sufficient scale.
Adverse undermining
Germany also warns against what it calls “adverse undermining,” a scenario in which a third country sets up production in one of the EU’s partner countries specifically to exploit that partner’s more favourable origin rules, entrenching the very dependencies the law is meant to reduce.
The concern reflects a wider fear in Brussels that Chinese companies could relocate parts of their production to countries such as Morocco to sidestep EU restrictions.
Germany proposes a two-stage response.
First, the Commission would run a preliminary assessment based on indicators rather than automatic triggers, such as a rise in imports from a partner country, increased foreign direct investment, or greater participation by foreign bidders in tenders.
Second, the Commission would be empowered to request evidence on short notice, impose strict compliance checks, and exclude specific companies or entire countries from the origin rules.
The German paper also proposes shifting the burden of proof onto the company or country under investigation in some cases, making it easier for the Commission to enforce the rules.
Read the full article here
