Ding Chun and Luo Tianyu: 'Made in Europe' should not slide towards protectionism

Recently, the European Union has made a high-profile mention of "Made in Europe", attempting to address the pressure of intensified external competition and internal industry hollowing out by strengthening local industries and favoring local manufacturing in public procurement and subsidy rules. The Executive Vice President of the European Commission, Stefano S é juelny, along with over 1100 business leaders, has called for Europe to become a "playground" for other countries' games without strong industrial policies. The upcoming Industrial Accelerator Act intends to tilt towards local manufacturing in public procurement, targeting China's competition for low-priced goods and responding to the industry outflow anxiety caused by the US Inflation Reduction Act. Seurat claimed, 'China has' Made in China', the United States has' Buy American ', why can't Europe?' This statement has strong political mobilization power.

However, it should be pointed out that "Made in Europe" is more like a collection and directional statement of multiple policy tools, rather than a mature and unified strategy. Its connotation, boundaries, and implementation methods are still in a game. In fact, there is no solid consensus within the EU on this idea. France explicitly supports the strengthening of "Europe First" in public procurement and subsidy rules, viewing it as an important lever for reshaping the industrial base; However, countries such as Sweden and the Czech Republic are concerned that localization requirements may drive up costs, weaken investment attractiveness, and even erode the principle of a single market. The attitude of the industry is also divided, with the automotive industry being particularly cautious. The head of Ford's European business stressed that the relevant rules should include key supply chain partners such as the UK and Türkiye; Mercedes Benz management warns that excessive emphasis on localization may lead to supply chain fragmentation, exacerbate inflationary pressures, and instead compress the global market space of European companies.

The more fundamental issue is that the current decline in competitiveness faced by Europe is not primarily caused by external shocks. Former European Central Bank President Mario Draghi, who was commissioned by the European Union to write a competitiveness assessment report, clearly pointed out that Europe has systematically fallen behind the United States and China in terms of productivity growth, per capita GDP growth, innovation transfer, and cultivating global leading enterprises. It is worth noting that the "Draghi Report" and its derived "Competitiveness Compass" have been promoted for more than a year, but overall, from the coordination of member states, legislative progress to funding and project implementation, there is still a lack of progress: a large number of measures remain at the framework and initiative level, making it difficult to form an "immediate" repair to structural weaknesses.

In new fields such as artificial intelligence, digital platforms, and new energy vehicles, Europe's overall presence is limited, making it difficult to achieve large-scale breakthroughs, and in a sense, it has fallen into the 'medium tech trap'. Behind this situation is the long-term accumulation of multiple structural factors. Firstly, population aging leads to a shrinking labor supply and a decrease in innovation vitality; Secondly, although the EU regulatory system is known for its high standards, it has become a burden during economic downturns - regulations such as environmental protection, labor, and data are stacked layer by layer and criticized for "managing too much", which suppresses the space for companies to try and iterate quickly. Thirdly, the excessive focus on "decarbonization" has been accused of evolving into a "no growth agenda", with high energy costs and aggressive green transformation goals leading to a sharp increase in pressure for manufacturing to relocate. Fourthly, the EU capital market is highly fragmented, with corporate financing heavily reliant on the banking system and insufficient venture capital, making it difficult for startups to scale and miss the window of technological revolution. These problems cannot be solved simply by setting trade or procurement barriers.

In this context, if 'Made in Europe' is simply understood as building walls for self-defense, restricting imports, and forcing localization, its role may be very limited. In the short term, it may appease some industry sentiment, but in the long run, it may weaken the market competition mechanism, suppress innovation momentum, and even shake the institutional foundation of the EU single market. Therefore, reminders from within Europe are also worth paying attention to. Bernd Lang, Chairman of the International Trade Committee of the European Parliament, has warned that policies should not slide towards protectionism under the guise of economic security, but rather through openness and diversification of trusted partners to reduce risks and enhance resilience. In fact, many leading European companies do not shy away from competition. The management of German automotive parts giant ZF once described the Chinese market as the company's "gym" - being able to stand firm in high-intensity competition is itself a proof of ability. This mentality of transforming external pressure into internal reform momentum may be more in line with Europe's long-term interests.

In short, it is understandable to propose "Made in Europe" itself, but the key lies in how to position and implement it. If it serves to enhance innovation capabilities, improve capital markets, reduce energy costs, and enhance industrial ecological resilience, then it may become a catalyst for reform; But if it is transformed into an exclusive protectionist tool, imitating subsidy competition and market closure, it will not only be difficult to make up for structural shortcomings, but may also deviate from the EU's long-standing principles of openness and multilateralism. Ultimately, the ongoing debate in Europe remains an old question: should we pursue a "fair market" (emphasizing rules and fair competition, external constraints) or an "efficient market" (emphasizing efficiency and scale, rapid resource allocation)? If 'Made in Europe' only answers the anxiety of 'fairness' but fails to deliver' effective 'growth and innovation, it will eventually fall into the dilemma of slogan intensity exceeding reform depth. Protectionism may provide temporary shelter, but only by honing its capabilities in real competition can 'Made in Europe' regain its position on the global stage. The authors are the Director of the Center for European Studies at Fudan University, President of the Shanghai European Society, and Assistant Professor at the School of Politics and International Relations at Tongji University