UK hopeful of deal with EU on Made in Europe

Britain remains optimistic about reaching an agreement with the European Union to circumvent new Made in Europe trade rules, according to the minister overseeing talks. European Relations Minister Hamish Falconer expressed his belief that it was in the best interest of both parties to strike a deal on the proposed controls. Falconer argued that for Europe to stay competitive and withstand various challenges, cooperation was crucial.

He stated, "I think that’s such an overwhelmingly powerful case that I am sure we will come to a sensible position on all this."

The European Union is currently updating its trade rules to favor EU producers over those outside the bloc, causing concern for British businesses. The U.K. has urged the EU to guarantee that British producers won't be affected. However, Brussels claims it cannot provide such guarantees as the rules are still undergoing legislative processes within the bloc.

Nonetheless, if no agreement is reached, London believes its Brexit trade deal, the Trade and Cooperation Agreement (TCA), could force Brussels to reconsider its stance.

Falconer emphasized that the U.K.'s arrangements with the EU are heavily influenced by the TCA, which offers strong protections and is independently overseen. He expressed concern that further impediments to the U.K.'s industrial base would not enhance European competitiveness. Some EU officials have even suggested that the proposed Industrial Accelerator Act (IAA) could violate the union's international trade deals, according to documents seen by POLITICO.

Falconer did not explicitly confirm whether the upcoming U.K.-EU summit would demand an agreement on Made in Europe but clarified that discussions should not be publicly disclosed. The minister also dismissed reports of the EU demanding the U.K. raise tariffs on Chinese cars in exchange for the IAA guarantees, stating that he was "surprised" by such claims.

However, a potential compromise may be on the horizon, with EU officials and diplomats indicating that the subject could still be discussed, possibly through a political declaration.

Falconer, who recently attended a European Parliament plenary session in Strasbourg, confirmed that he would be discussing future options with European partners, particularly in light of Prime Minister Andrew Burnham's suggestion about the U.K. potentially rejoining the EU's customs union or single market. He was meeting with Trade Commissioner Maroš Šefčovič and European Parliament President Roberta Metsola during his visit.

While the exact date of the summit remains undisclosed, Falconer hinted at a planned discussion in the coming weeks.