Britain's exclusion from the European Union's planned "Made in Europe" industrial strategy would fracture the continent's shared industrial base and leave both sides weaker, according to Hamish Falconer, the UK's minister for European relations.
Speaking in Strasbourg on Wednesday after talks with EU counterparts, including Trade Commissioner Maroš Šefčovic, Falconer stressed that keeping supply chains open was "strongly in the EU and UK's interests."
"I think it is vital that we don't do things to make European industry weaker," Falconer said. "It would not be in either of our interests to see new barriers arising in our economic relations."
The European Commission's Industrial Accelerator Act (IAA) aims to shield domestic manufacturers from unfair foreign competition by giving preference to European producers in public procurement. The proposal is widely seen as a response to China's assertive trade policies and state-subsidised competition.
But there is no consensus on what qualifies as "European" or whether non-EU companies should be treated on an equal footing. The UK government, led by Prime Minister Andy Burnham, has made inclusion in the scheme a priority in its negotiations with Brussels.
"The industries that have lobbied me with the most enthusiasm are European industries," Falconer said, noting a "clear sense" that the European industrial base is shared with the UK, which is the bloc's second-largest export market and the top destination for new EU-made vehicles.
"If we were to fracture that industrial base, that would simply mean a weaker Europe, both in the UK and in the EU," he added.
Divisions among member states
EU member states are split over how to implement the scheme. France has pushed for a stricter approach, while Germany is seen as more open to extending rules of origin to trading partners that offer reciprocal access to EU companies.
Last week, Burnham raised the issue directly with European Commission President Ursula von der Leyen during the UN General Assembly in New York, saying ahead of the meeting: "we are not your enemies." He is due to meet German Chancellor Friedrich Merz in Berlin on Thursday.
EU sources say talks on UK inclusion have accelerated since Burnham took office in July, but it remains unclear whether a deal can be reached before the EU-UK summit expected before the end of the year.
Asked whether the UK would make concessions to gain access, Falconer said "talking about concessions is quite the right place to start," pointing to the shared nature of the European industrial base.
Shared desire for closer ties
Falconer also hailed a "shared desire" to bring the UK "back closer" to the EU, days after Burnham opened the door to eventual re-joining. He said he shared Burnham's view that "the current relationship that we have is not good enough."
"We are eternal neighbours, we have real shared interests and we're looking at this relationship with a real range of determination and ambition," he explained.
Burnham is expected to outline options for the future relationship around the time of the summit, which was originally scheduled for July but postponed after former Prime Minister Keir Starmer's resignation. The delay also stalled negotiations on agri-food trade, electricity markets, and youth exchanges.
Falconer said he hoped the Burnham-led government would move "further and faster" on the reset, aiming for "the most ambitious possible package" at the summit.
Recent polling suggests growing public support for closer ties. A survey by the Messina Group last week indicated that almost half of UK voters would back rejoining the EU if a referendum were held.
The stakes of the talks have shifted with Burnham's remarks, as attention turns to a potentially much closer long-term relationship. The outcome of the summit will be closely watched in capitals across Europe, as the bloc weighs the benefits of a deeper partnership against the political sensitivities of Brexit.
