EU governments push to narrow “Made in Europe” preference rules in industrial draft bill

EU governments are moving to overhaul the “Made in Europe” concept—one of the most politically sensitive provisions of the proposed Industrial Accelerator Act (IAA)—in favor of a legally precise framework grounded in trade agreements and product-specific market access.

Under the plan, member states aim to replace the broad “Made in Europe” definition originally drafted by the European Commission. According to the latest EU Council compromise document, prepared by the Irish presidency last week and obtained by Politico, national governments are introducing a new “partner origin” category. This classification will govern when goods from non-EU nations are deemed equivalent to European products in public procurement and state-support programs.

Rather than assuming all free-trade partners share identical status, the proposal distinguishes between products covered by the World Trade Organization’s Agreement on Government Procurement and those governed by the EU’s standalone free-trade or customs union agreements. Whether a specific product qualifies will depend not merely on the existence of a trade deal, but on the bloc’s actual procurement commitments regarding that specific good.

The Council’s compromise seeks to reshape the Commission’s initial two-tier approach, which granted the EU executive broad discretion to determine whether countries with public procurement and free-trade agreements qualified. That permissive interpretation raised prospects that nearly 80 countries could gain eligibility, sparking deep concern in member states such as France over the breadth of access. By contrast, Industrial Commissioner Stéphane Séjourné had previously suggested that the “Made in Europe” club might be restricted to as few as 20 nations.

To assert control, the Council’s text proposes utilizing implementing acts rather than delegated acts. This procedural shift ensures EU member states retain a formal vote on adding or excluding third countries, allowing them to evaluate whether those nations grant reciprocal treatment to European products or pose risks regarding strategic dependencies and security of supply.

The overarching objective of the IAA is to deploy public resources and single-market leverage to shield energy-intensive industries, net-zero technology providers, and the automotive sector from “unfair foreign competition.” This strategy includes using public procurement to privilege products that satisfy domestic-content rules or qualify for “Made in Europe” preference.

For the framework to function operationally, the Commission will need to maintain product-specific lists of eligible countries through its Access2Markets portal. The Council proposes that contracting authorities relying on this database to determine procurement scope will not be found in violation of EU law solely because of errors present in the public portal.

In a critical adjustment to Chapter III of the IAA—which establishes the definition of EU origin—the Council has introduced the concept of “melted and poured” to determine the origin of steel products. This modification aligns the legislation with existing rules, including the tightened EU steel import quotas that took effect last month.

In Annex II of the draft text, the Council retains mandatory European-content thresholds for steel, cement, and aluminum. However, it introduces a contingency allowing the 2029 enforcement date for these thresholds to be postponed if the relevant delegated acts and technical specifications are not finalized at least six months in advance.

This conditional delay signals potential slippage in the implementation timeline for the IAA. Combined with provisions in the draft regulation that have been shifted from mandatory to optional status, the changes demonstrate how far the Council has diverged from the Commission’s original proposal ahead of upcoming negotiations with the European Parliament.

European Commission President Ursula von der Leyen has called for the regulation to be adopted by the end of the year. However, with the Commission’s initial proposal delayed and rewritten before its eventual publication in March, the Council still making substantial amendments, and the Parliament not expected to finalize its position until September, the legislative timeline remains extremely tight.