Andy Burnham has been told he may need to prioritise the EU over China if the UK is to get around new 'Made in Europe' measures. The warning comes as EU chiefs consider a new Industrial Accelerator Act (IAA) that would require manufacturers to ensure at least 70% of a vehicle's non-battery components originate in the EU to receive subsidies.
Professor warns on EU access
Professor David Bailey, Professor of Business Economics at the University of Birmingham, stressed that the UK should consider placing tariffs on Chinese imports if it would allow a deal to be brokered with Europe. Speaking exclusively to The Express, he said: "Europe and the UK need to examine the effects of industrial subsidies, market access and the wider competitive conditions facing domestic manufacturers. If Europe introduces a Made in Europe regime that protects its industrial base, the UK needs to be inside it."
He added: "That is mission-critical for the future of British automotive manufacturing. If protecting access requires trade measures against Chinese imports, those measures should be on the table. We cannot expect UK manufacturers to compete globally while leaving them exposed to every disadvantage at home."
Threat to UK car market
With the UK out of the EU, the new rule is seen as a major threat to the UK car market, with the Society of Motor Manufacturers and Traders (SMMT) warning the policy could put Britain at a competitive disadvantage. The EU and the United States already have tariffs on Chinese vehicles, but the UK does not, allowing customers to enjoy Chinese vehicles at a lower price point, though this is likely to be a point of contention with Europe.
It is understood that the IAA and 'Made in Europe' legislation are primarily designed to protect European brands from Chinese state-backed subsidies.
France and Germany call for reciprocity
France and Germany have called for the UK to be included in 'Made in Europe' rules but state that inclusion should be subject to an agreement on full reciprocity. This would include "dynamic alignment with EU conditions for investment from third countries and with EU trade protection measures".
British business minister Jonathan Reynolds stressed that Labour were working on "finding a way" through concerns around the new 'Made in Europe' proposals. Speaking last month, he said: "I think we're finding a way through that. A lot of work is going on in government between ourselves and the EU to find a way through that."
