France drops opposition to UK being included in ‘Made in Europe’ legislation

France now supports a conditional British opt-in to the EU’s “Made in Europe” rules, but only for the automotive sector. Germany has consistently backed the UK’s inclusion. The change matters because exclusion could shut British manufacturers out of preferred European supply chains.

The Franco-German proposal covers the EU27 and European partners that were in the EU single market on 1 January 2020. That includes the UK and Norway. However, participating countries must accept full reciprocity, including the European automotive preference scheme and alignment with EU trade-defence measures.

The conditions directly link market access to policy alignment. The UK would need to follow EU tariffs on Chinese electric vehicles and future barriers, such as planned quotas on Chinese hybrid-car exports. The proposal still needs to pass through the European process, but Downing Street called the development positive.

The EU’s Industrial Accelerator Act is a draft package designed to protect domestic manufacturing from cheap Chinese competition. Its “Made in Europe” element would give European producers a preferred position in industrial supply chains. That matters because the car industry spans factories, parts suppliers, jobs, and investment across several countries.

For cars, the proposal would define “Made in Europe” as the EU27, with an opt-in for certain European partners. The UK and Norway could qualify because they were part of the EU single market under the stated criteria. Their participation would depend on accepting the same relevant European preference scheme.

The policy is still in draft form, so its final scope is not settled. The dispute shows that industrial protection also affects trade policy. Countries seeking access may have to align with EU measures against Chinese competition, including tariffs and possible future trade barriers.

If both the UK and Norway opt in, the proposed automotive “Made in Europe” area would cover 29 countries. That total comes from the EU27 member states, plus two European partners. The arrangement would widen the preferred manufacturing network beyond the EU itself.

The Franco-German paper proposes eligibility for partners that were part of the EU single market on 1 January 2020. The UK was still an EU member then, while Norway remains in the single market without being an EU member. Both could therefore qualify under the proposal.

The figure is conditional rather than final. Each partner would need to accept full reciprocity and align with relevant EU rules. Those include the automotive preference scheme, trade-defence measures, anti-circumvention measures, and conditions concerning investments from third countries. The wider network could support cross-border supply chains, but the proposal remains under European consideration.

The UK’s inclusion would not be unconditional. The Franco-German proposal requires full reciprocity, meaning Britain would adopt the European preference scheme relevant to the automotive sector. This would allow the UK to benefit from the preferred network while accepting comparable obligations.

The central condition is dynamic alignment with EU trade-defence measures. That includes the tariffs the EU imposed on Chinese electric vehicles in 2024. It could also cover future barriers, such as the quota arrangement being finalised with China for hybrid-car exports. Anti-circumvention measures would apply as well.

The proposal also refers to alignment on EU conditions for investments from third countries. The UK government has faced pressure to match the EU’s China policy, although Jonathan Reynolds said he would not be coerced. Anas Sarwar later said Britain and the EU should act “in lockstep” against China’s automotive dominance.

Being excluded from the preferred European supply network could isolate British car manufacturing from important EU supply chains. The government fears that billions of pounds in automotive trade could be lost. That makes the dispute about jobs and investment, not just regulatory labels.

The article gives a direct warning from Liam Byrne. He said accepting European trade-defence measures was a small price for protecting British manufacturing and jobs across UK supply chains. The head of Mercedes-Benz also said exclusion would deliberately hurt the car industry across the bloc, including companies operating in Britain.

The consequences are not certain because the legislation remains in draft form. Downing Street said inclusion would be good news for British automotive jobs and investment. If the UK aligns with EU measures and gains access, companies could remain connected to the preferred network. If not, manufacturers may face weaker access and greater commercial pressure.

France initially opposed the UK’s inclusion unless Britain matched the EU’s position on Chinese electric-vehicle tariffs. Germany supported British inclusion, seeing wider European participation as important for industry. France has now moved toward Germany’s position through a conditional automotive opt-in.

The UK government wants access to the “Made in Europe” package because exclusion could damage trade, jobs, and investment. Yet business secretary Jonathan Reynolds said Britain would not be coerced into adopting EU tariff policy. Trade minister Anas Sarwar later suggested the UK was minded to align, calling for both sides to act together against China’s automotive dominance.

European carmakers focus on practical supply chains rather than political boundaries. Mercedes-Benz’s head warned that excluding Britain would hurt carmakers across the bloc. The companies want a broad manufacturing base, while governments are also considering trade defence, sovereignty, and responses to Chinese competition.

A tariff is a charge imposed on goods entering a country or trading bloc. Trade-defence measures are broader tools used when imports are judged to gain an unfair advantage, such as through foreign subsidies. They can make artificially cheap imports more expensive and reduce pressure on domestic producers.

In this case, the EU imposed tariffs on Chinese electric vehicles in 2024. The article links those tariffs to concerns about Chinese competition and subsidies. If imported cars become less price-advantaged, European manufacturers may have more opportunity to sell vehicles and maintain factories, suppliers, and jobs.

The measures can also bring political costs. The UK is being asked to align with the EU’s tariffs as the price of entering the automotive “Made in Europe” scheme. Britain must weigh access to European supply chains against the freedom to set its own China trade policy. Future measures could include quotas on Chinese hybrid-car exports.