Defining ‘Made in Europe’: embracing smart investment incentives and allied cooperation
Position Paper
25 Nov 2025
Competition, Transatlantic, Industry, Trade

European policymakers are increasingly focused on strengthening the EU’s strategic autonomy, reducing strategic dependencies and building greater resilience across critical sectors. This drive is rooted in legitimate concerns about ensuring access to essential goods, increasing the diversity of supply chains and enhancing the EU’s ability to respond to geopolitical and economic challenges. As the EU seeks to address these challenges, its core objective should be to leverage its extensive partnerships and use smart incentives to support the bloc’s long-term competitiveness and security.

Lawmakers are actively considering ways that ‘Made in Europe’ criteria could support these objectives in virtually any process requiring clearance, approval or an auction. Global examples of domestic preference and non-price criteria demonstrate two things. First, if they are designed poorly, they could reduce competitiveness, simplification and resilience. However, they also demonstrate that if they are designed well, they can maximise the value of allies’ economic participation and improve the functioning of the processes they are applied to.

The US’s various ‘Buy America’ programmes provide a useful case study for assessing the risks of different ‘Made in Europe’ regimes. While US procurement and funding programmes with ‘Buy America’ provisions are generally open to foreign-headquartered participants (and actively encourage their participation), they also bring certain categories of risk that should be considered before bringing them to the EU.

If ‘Made in Europe’ effectively excludes firms headquartered in the US and other allied nations, including EU-based subsidiaries of US-headquartered firms, the EU risks introducing more complexity into European public procurement markets and funding programmes. This would ultimately diminish competition and the quality of products and services, while increasing costs and elevating trade tensions that may decreasing the market access of EU-headquartered companies abroad. At a time when the EU is facing urgent competitiveness challenges, policymakers should avoid pursing reactive security and resilience policies that would undermine the EU’s competitiveness goals.

However, if thoughtfully implemented, certain ‘Made in Europe’ regimes could leverage the EU’s Single Market and international partnerships to improve the EU’s competitiveness and resilience.

To achieve its goals, the EU should ensure that ‘Made in Europe’ policies:

  • Focus on ‘EU-added value’, rewarding investors for providing real added value through holistic and non-discriminatory criteria that consider an activity’s overall value, such as innovation, research and development (R&D) collaboration and local workforce engagement. This would attract high-quality investments and technologies to the EU that support its growth and competitiveness.

  • Deepen allied trade relationships by cultivating productive cooperation in public procurement, funding and research. Such partnerships give the EU the scale and resilience it needs, while discriminatory rules shrink choice and increase costs. By deepening ties with allies, the EU addresses vulnerabilities through cooperation, not isolation.

  • Create a standard EU Trusted Partner List that references existing security, trade and sectoral frameworks to give certainty to companies with an EU business footprint and ownership or governance rooted in allied jurisdictions. An EU Trusted Partner List could build upon the World Trade Organization (WTO) Government Procurement Agreement (GPA) and the EU’s expansive network of free trade agreements (FTAs) and sectoral partnerships (such as Mutual Recognition Agreements in the health policy space) to include multilateral configurations like the Organisation for Economic Co-operation and Development (OECD). Such an approach also aligns broadly with the policy objectives of the US’s Foreign Entity of Concern (FEOC) list.

  • Develop flexible partnership mechanisms to address genuine risks, such as a waiver system for production in partner countries on an EU Trusted Partner List to encourage cooperation between countries with longstanding ties. Clear prequalification criteria related to headquartering would ensure certainty for businesses, insulate them from political uncertainty and help the EU target genuine risks while keeping markets open to long-standing allies.

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