France drops opposition to UK in ‘Made in Europe’ plan

France has dropped its objection to including the UK in the EU’s proposed ‘Made in Europe’ legislation, but only if Britain aligns with the bloc’s stance on tariffs for Chinese electric vehicles. The shift is a breakthrough for Andy Burnham, who has been pushing for the UK to be designated as European under the Industrial Accelerator Act. That draft law aims to shield domestic manufacturing from low-cost Chinese competition.

A Franco-German proposal with conditions

Germany had already supported the UK’s calls, and now France is backing that position. A joint Franco-German paper seen by the Guardian proposes that for the automotive sector, ‘Made in Europe’ should include the EU27 plus an opt-in for European partners that were part of the single market as of January 1, 2020. That’s a clear nod to the UK, which was still an EU member then. Norway, in the single market but not the EU, could also join.

But the opt-in comes with strings. Countries would have to agree to full reciprocity, including adopting the European preference scheme for cars and aligning on trade defence measures. Those measures include the tariffs the EU imposed on Chinese EVs in 2024, and any future barriers like the quota deal being finalised with China on hybrid exports. The paper says opt-in nations must accept dynamic alignment on the EU’s conditions regarding third-country investments and relevant trade defence measures, as well as anti-circumvention measures.

Pressure on the UK to align

The UK has been under pressure for weeks to match the EU’s tariffs on Chinese vehicles. This week, business secretary Jonathan Reynolds said he wouldn’t be coerced into aligning. But on Thursday, trade minister Anas Sarwar hinted the UK was minded to do so, telling Politico the two sides must work together and act in lockstep to tackle China’s dominance in the automotive sector. The government is desperate to be included in the package, fearing billions of pounds in car trade could be lost if the UK is shut out of EU supply chains.

Liam Byrne, who chairs the UK’s business, innovation, science and trade committee, called aligning with the EU on trade defence a small price to pay to save British manufacturing. He said it was sometimes the least worst choice in politics, and that tariffs would protect European manufacturing jobs across UK supply chains while making the UK less prone to Chinese coercion. On Wednesday, the head of Mercedes-Benz implored EU leaders to let the UK join, saying locking it out would be a deliberate choice to hurt the car industry across the bloc.

A positive development for Downing Street

Bernd Lange, chair of the European parliament’s international trade committee, said the UK should of course be included, calling France’s previous opposition not rational. A Downing Street spokesperson said they had yet to see the detail but saw the development as positive. The spokesperson noted it was a Franco-German proposal and a European process still had to run, but if confirmed, the UK would welcome the objective of being included in the Industrial Accelerator Act, calling it good news for the British automotive industry and the jobs and investment it supports.