Targeting European Preference Criteria Where They Matter Most
Assessing when, where, and how “Made in EU” can strengthen socio-economic resilience and competitiveness
This report, Targeting European Preference Criteria Where They Matter Most, shows for which sectors and technologies European local content criteria should be used. The authors identify products and industries where the EU still holds substantial technological leadership. This notably includes the machinery and capital goods sector, which employs over 2.6 million people and contributes to 9% of the EU’s value added. Products range from specialised and integrated industrial equipment, advanced machinery, and tailored production and machinery systems to clean-tech applications such as tailor-made electrification solutions, wind turbines, electrolysers, or heat pumps.
“Buy European” is not only an instrument to protect European jobs, but also a geopolitical instrument to ensure the EU keeps control over its geo-economic leverage vis-à-vis China and the US. The European Commission should not only aim at protecting strategic industries under pressure today, but also those that will experience pressure from Chinese competition tomorrow. The report distinguishes four categories of industries based on an assessment of 32 sectors and 234 products:
Defend Europe’s frontier strengths (machinery, semiconductors, precision equipment, clean-tech manufacturing).
Strengthen & Grow emerging sectors with scale potential (batteries, optical and precision industries).
Transform strategically relevant but structurally pressured sectors (automotive value chains, steel, chemicals), with strict conditionality and sunset clauses.
Avoid structurally uncompetitive import-dependent sectors where local content rules would raise costs without restoring competitiveness.
The authors recommend that any local content rules under the Industrial Accelerator Act should focus on those technologies where the EU can regain and defend technological leadership including highly advanced machinery, semiconductors, precision equipments, clean-tech manufacturing, batteries and optical and precision industries.