Made In Europe Procurement Rules Split France and Germany

The European Commission has proposed new procurement rules under the Industrial Accelerator Act, aiming to boost industrial capacity and decarbonisation in strategic sectors. This proposal has sparked disagreement between France and Germany over the eligibility criteria for EU public contracts and subsidies. France advocates for a strict EU-27 definition, focusing on manufacturing within the 27 member states.

This stance prioritizes rebuilding production capacity within the Union, potentially disadvantaging American exporters and suppliers in Latin America. Germany, on the other hand, supports a more flexible "Made with Europe" approach, allowing trusted partners such as Norway, Switzerland, and Canada to qualify. This approach acknowledges the deep integration of German industry with non-EU suppliers, particularly in automotive and industrial manufacturing.

The core commercial issue revolves around the distinction between market access and eligibility for public support. While a foreign product could remain importable and commercially competitive, it might lose access to procurement preferences, subsidies, or other public-support programmes under a narrow EU-only definition. For Latin American suppliers, the impact of the final decision hinges on whether their countries are classified as trusted partners and granted equivalent treatment.

A narrow EU-27 definition would make it harder for Latin American companies to benefit from EU-funded procurement and industrial-support programmes, even if products enter the EU under preferential tariff arrangements. Conversely, a broader trusted-partner definition could improve prospects for Latin American suppliers, but this would depend on the EU's classification of these countries and the inclusion of reciprocal procurement access in relevant trade agreements.