‘Made in Europe’ row brings back Brexit’s bitter memories

PARIS — Does Brexit still mean Brexit?

It certainly does in France.

Once the catchphrase of the British government, the curt slogan has found an unlikely new home in Paris.

To Emmanuel Macron’s government, it means the U.K. should not be able to enjoy the benefits of being a member of the bloc’s single market after leaving the union.

That’s having implications for London’s bid to “reset” relations with Europe and edge back closer into the orbit of the European Union.

The latest battleground is the EU’s plan for “Made in Europe” rules which would favor European companies over foreign ones in public tenders and state aid.

Four French officials, granted anonymity to speak about private talks, told POLITICO that British firms shouldn’t automatically have access to the same benefits as EU firms under the rules.

Stéphane Séjourné, the EU industry chief who is a member of Macron’s party, has drafted the proposals, giving France an outsized voice in the negotiations.

But the push to lock out British firms has raised concerns in London, where the government wants U.K. firms to be treated no differently to other European companies.

British ministers are shuttling back and forth across the Channel to try and get this message across.

Business Secretary Peter Kyle will meet top Commission officials and industrialists in Brussels on Wednesday, while Trade Minister Chris Bryant is also expected to pass that message as he visits Paris and meets with the French trade minister next month.

The British government fears that new rules risk undermining U.K. business and has launched a charm offensive to be included in the Made in Europe club.

“We are engaging with EU countries and the Commission on this. Obviously we’re concerned, but will engage in good faith,” said one U.K. government official, arguing that excluding the U.K. from the new Made in Europe club could backfire against some European and French companies who have strong trade ties with the U.K.

“The reality is that a lot of French businesses that have supply chains intertwined with the U.K. will be having serious chats with the French government,” the official said.

France isn’t buying their pitch.

The French officials’ reasoning is simple: Since it left the EU single market, the U.K. should not enjoy the benefits that come with it, noted the officials, who were granted anonymity to comment candidly on sensitive negotiations.

“You can’t have the cake and eat it too,” one French official told POLITICO bluntly.

Brexit means Brexit

U.K. businesses have been warning that they see EU rules as a threat.

The Society of Motor Manufacturers and Traders (SMMT) has accused Brussels of “protectionism.” 

Chancellor Rachel Reeves struck a more diplomatic tone when she urged the EU to include Britain in the Made in Europe club earlier this month, saying it would not make sense to exclude it from a scheme aimed at increasing the bloc’s resilience. 

For now, France is hoping to rule out giving preferential treatment to the U.K. over other non-EU members. The French government is open to the idea of including members of the European Economic Area — Norway, Iceland and Liechtenstein, as foreseen in the text.

Paris says it could consider letting the U.K. benefit from some measures of its Made in Europe package, such as European preference in tenders, but only at a later stage and under certain conditions that still need to be negotiated.

​The French caution reflects a broader approach to restarting relations with the U.K.

“Anything that brings the U.K. closer to Europe is welcome. But Brexit happened, so we cannot just do as if it hadn't happened. In rebuilding that relationship, we need to take into account that they're not members of the EU anymore,” French Economy and Finance Minister Roland Lescure told reporters earlier this month, commenting more broadly about EU-U.K. ties in the defense and energy sectors.

“By drawing the line on the single market, the U.K.  has pulled itself out not only from the single market as we know it, but also from its future developments such as Made in Europe rules,” said Sandro Gozi, who co-chairs the European Parliament's United Kingdom Contact Group.

However, Gozi, a Macron ally, said he hoped that one day the U.K. will reconsider its decision to leave the single market. 

The old dividing lines

“This is both the EU trade and Brexit debates along the old lines — France at the hardline end, others keener to emphasize openness,” said David Henig, U.K. director of the European Centre for International Political Economy.

Made in Europe provisions, which are part of the upcoming EU Industrial Accelerator Act, are proving controversial even among countries as they mark a paradigm shift from the bloc’s traditional free-trade agenda.

The text, shepherded by Industry Commissioner Stéphane Séjourné, a close Macron ally, was delayed for the third time on Monday amid disagreement on the scope of its Made in Europe measures and a significant internal pushback within the Commission.

In the latest draft of the text obtained by POLITICO, the Commission pledged to identify “trusted partners” whose manufacturing “should be deemed equivalent to Union origin content.”

Whether British firms will be inside or outside the club remains to be seen.

Joshua Berlinger contributed to this report.