Twenty years ago as a mid-ranking official in the European Commission I was told to develop an EU regulation requiring products to be labelled “Made in Europe”.
The idea was noble: consumers want to know where their goods are made; and we were told that “Europe” stands for quality, as opposed to say China or Vietnam.
Labelling goods as “Made in Europe” would stimulate sales and more manufacturing jobs on the continent.
That particular poisoned chalice did not go ahead.
Following years of industry consultations, ultimately the only sectors pushing for a “Made in Europe” sticker were furniture, luggage and Spanish ceramics.
Other sectors were unconvinced of the marketing value of “Europe”; several European countries preferred to stick to “Made in Germany” or “tradition française” and the like as a mark of quality.
And the EU’s trading partners were — and still are — reluctant to recognise European origin as opposed to French, German or Bulgarian origin, notwithstanding the single market.
One of the few remnants of this Cinderella policy was suitcases.
Samsonite went ahead with a neat “Made in Europe” brand. We all surely feel a surge of pride as we collect our Made in Europe suitcase from the carousel at the airport. No? But the Samsonite label is a voluntary, private sector one, not anything mandated by Brussels.
But 20 years on the idea has made a big comeback. The US has a suite of policies and laws to encourage reshoring and restoration of US domestic manufacturing, ranging from the Inflation Reduction Act that favours local procurement, to Trump’s Liberation Day tariff scheme designed to reduce imports and bring manufacturing jobs back to the rust belt States.
In Asia, “Made in India” was launched with fanfare five years ago with tax breaks, promotion money and incentive schemes for homegrown manufacturers (as well as some very welcome deregulatory initiatives).
Made in China 2015-25 is another government scheme to promote domestic industry in key sectors through subsidies, tax incentives and low-interest loans.
Due to these schemes, the prospect of either India or China joining the WTO Government Procurement Agreement becomes remoter by the day.
Europe is now, 10 years too late, coming around again to “Made in..”, as part of its somewhat forlorn attempt to re-industrialise as well as reduce risky supply chain dependencies on China and the USA.
The EU Commission will announce on 10 December a new “Made in Europe” proposal, currently under wraps but expected to allow member states more latitude to discriminate against non-European products in their procurements, provide incentives to buy European-made cars and other technologies, and heavily subsidise European battery production.
It remains to be seen to what extent the proposals will cover tax incentives (a jealously guarded member states prerogative), or concessionary financing for European direct investments.
There will be a battle royal over these proposals in the Council and Parliament, setting northern member states against southern ones
No prior impact assessment has been conducted, to my knowledge. But the commission has no doubt been studying the success or otherwise of US, Chinese and other buy national schemes.
It may also stimulate buying European via a “green back door”… providing eco-scheme incentives or subsidies to green technologies, but defined in a way that only European producers can qualify.
Despite being a services economy, we are unlikely to see any imaginative ideas to stimulate European services supply or purchase, outside of the transport and construction sectors.
There will be a battle royal over these proposals in the Council and Parliament, setting northern member states against southern ones.
Northern EU countries do not want to bend or break WTO rules, and do not believe that subsidising national or European champions is good industrial policy or sound economics (I still have in my wardrobe a tie given by Bull, the French personal computer champion).
It means consumers paying more for products made of European parts as opposed to cheaper Chinese inputs.
Europe cannot produce electric vehicles under €25,000. Several member states will rightly wonder if 'Buy Europe' rules will be skewed to de facto favour one EU country over another, so setting the competition hares running across the single market.
Southern, and some eastern member states, have ceased to care about the WTO and are desperate to stem the haemorrhage of manufacturing jobs to Asia.
They will embrace firm made in Europe rules, even if illegal under international law and even if evidence shows that they will fail to change the game.
The commission’s proposals may very well fall foul of its WTO international commitments, either through giving trade-distorting subsidies to business, or through breaching the WTO’s rules preventing discrimination against imported products — the core discipline of the General Agreement on Tariffs and Trade (GATT). Local content requirements are basically not allowed.
Will affected trading partners take action against the EU?
It will depend on what the policy looks like, but China probably will, being the country most targeted.
The US and India will not because they are implementing their own schemes and do not attach value any more to the WTO’s judicial system.
My prediction is that after a difficult debate in the council and parliament, in which the scheme’s impact on the level playing field of the single market rather than third country views will drive a six-month debate, Europe will go ahead with a considerably watered-down 'Made in Europe' scheme, centred on permissible restrictions on procurement and offering some subsidies on a limited range of goods — small cars for example — with a high percentage of European input.
I confess I would give anything to be again a mid-ranking official in the Commission right now, charged with developing a “Made in Europe” scheme that would respect the single market, be WTO-consistent, respond to market forces — and reflect the reality that Europe is a services economy.
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John Clarke was till recently a director for international relations in the European Commission and an EU trade negotiator. He was also head of the EU Delegation to the WTO and UN in Geneva. He is now a journalist, a fellow of Maastricht University and a fellow of the Royal Asiatic Society.
John Clarke was till recently a director for international relations in the European Commission and an EU trade negotiator. He was also head of the EU Delegation to the WTO and UN in Geneva. He is now a journalist, a fellow of Maastricht University and a fellow of the Royal Asiatic Society.