00:01It's part of a proposed law called the Industrial Accelerator Act, so that says that when public
00:07money is involved, and obviously this could be, say, procurement by a public body, an
00:12auction or a subsidy, such as, say, a tax incentive to buy certain products, then these
00:18products or a share of these products should be both low carbon and, in many cases, made
00:24in EU, and this applies to all the industries, so steel, concrete and aluminium, electric
00:30cars and clean tech equipment or technology such as batteries, solar and wind power or
00:38electrolysers.
00:40So why has the EU proposed the rules?
00:43Well, the EU wants to encourage the decarbonisation of sectors such as steel, and it wants to promote
00:50clean tech production, but it doesn't want these, you know, it obviously has these climate
00:54goals, it doesn't want them to be fulfilled by cheap imports from China that could destroy
00:59domestic industry and jobs, and it also wants to reduce its reliance on China to avoid being
01:04squeezed by export controls, as has been the case for rare earths.
01:11So why is Britain worried?
01:12Well, I think it's that very phrase made in EU.
01:15Britain obviously left the EU in 2020, so it is not necessarily included.
01:20I think for the auto industry in particular, this is worrying because significant parts
01:25of their supply chains are entwined with operations in the EU, and Britain obviously doesn't want
01:31to see its car production cut off.
01:33I did say, though, it's not necessarily included because it could be, because made in EU could
01:39extend to countries with which the EU has trade agreements or that are signatories to
01:45the World Trade Organisation Government Procurement Agreement.
01:48Britain ticks both of those boxes.
01:50The ultimate test then is reciprocity.
01:52So is Britain offering equal opening to EU firms in its markets as it is expecting for
01:59British firms in the EU?
02:01Now, there are differences of opinion on this.
02:03France, for example, wants a very kind of restrictive definition of made in EU to mean literally
02:09that, made in EU.
02:10But there are other countries, Sweden, the Czech Republic, for example, that want a broader
02:15definition that is likely to include Britain.
02:20There's another part of the Act that covers inbound investment, and there are conditions
02:24set on potential investments in what are called strategic sectors.
02:28And they're for investors from countries that have 40% of global production capacity.
02:34There could be kind of limitations.
02:35And clearly, 40% of global production capacity basically means China.
02:40So investments from China, potentially other countries as well, could be limited.
02:44Now, obviously, that could affect them, but it could, of course, affect investment into
02:48the EU as well.
02:50The proposal has been made.
02:52The EU doesn't act at lightning speed.
02:55So it's gone to the European Parliament and the grouping of EU members called the Council.
03:00Their debate has started.
03:01As I said, they both need to approve the law, and that's likely to come after their respective
03:07debates at some point early next year.
03:10There are other countries, not just Britain, that's concerned about it.
03:13Probably the most concerned would be China, because it's quite clear that it doesn't meet
03:17the criteria.
03:18And the EU has highlighted a lack of reciprocity.
03:23China, of course, is very insistent that the EU should keep its markets open.
03:27And, of course, we have seen in the past, when the EU has taken certain measures, particularly,
03:32for example, putting tariffs on electric vehicles, then China has retaliated with its own measures
03:38on EU goods.
