Phoenix 24
Brexit ended membership, but not the industrial interdependence.
Strasbourg, France
The United Kingdom is warning Brussels that excluding British companies from the European Union’s emerging “Made in Europe” industrial policy could weaken the very industrial base the bloc is trying to protect. Hamish Falconer, Britain’s minister for European relations and chief negotiator with the EU, argues that supply chains linking the United Kingdom and continental Europe remain too deeply integrated to be treated as separate systems. The dispute is becoming an important test of how far post-Brexit Europe is willing to distinguish political borders from economic reality.
The European Commission’s proposed Industrial Accelerator Act is designed to strengthen European manufacturers by giving them preference in public procurement and other strategic areas. The initiative is widely understood as part of a broader response to Chinese state-supported competition and the growing pressure on European industrial capacity. The unresolved question is what “European” should mean in practice. Britain is outside the EU, but its companies remain embedded in automotive, aerospace, defense, energy and advanced manufacturing supply chains across the continent.
London is pressing for access to the scheme on the basis that excluding British firms could fragment a shared industrial ecosystem. Falconer has argued that European companies themselves have supported that position because the United Kingdom remains one of the bloc’s most important export markets and a major destination for European-manufactured vehicles. From the British perspective, erecting new barriers would not simply penalize UK producers. It could increase costs and reduce competitiveness on both sides of the Channel.
The debate also exposes divisions inside the EU. France has favored a stricter interpretation of industrial preference, while Germany appears more open to extending rules of origin to trusted trading partners if European companies receive reciprocal access. That difference matters because the policy is no longer only about procurement. It is becoming part of a larger argument over whether Europe should define economic sovereignty narrowly through EU membership or more broadly through strategic alliances and integrated supply chains.
The issue arrives as relations between London and Brussels begin to improve under Prime Minister Andy Burnham. His government has made closer cooperation with Europe a central priority while stopping short of launching an immediate process to rejoin the bloc. Securing British participation in “Made in Europe” would therefore carry symbolic significance as well as economic value. It would demonstrate that post-Brexit integration can deepen even without formal membership.
The strategic backdrop is equally important. Europe is simultaneously trying to reduce dependence on China, strengthen defense production, accelerate the energy transition and preserve competitiveness against the United States. Fragmenting supply chains with Britain while pursuing those objectives could create additional costs at exactly the moment Europe is attempting to build scale.
The argument is therefore larger than one industrial policy. It asks whether Europe’s future economic security should be organized around institutional borders or around networks of trusted production.
Industrial sovereignty becomes weaker when strategic partners are treated as outsiders.