When and why a European preference is justified
As China and the US pursue industrial policies to boost domestic manufacturing and cutting-edge innovation, calls for a 'European preference' are gaining traction. The Industrial Accelerator Act proposal...
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When and why a European preference is justified
As China and the US pursue industrial policies to boost domestic manufacturing and cutting-edge innovation, calls for a 'European preference' are gaining traction. The Industrial Accelerator Act proposal signals a shift towards a more discerning approach in public procurement and subsidies – and the upcoming Cloud & AI Development Act proposal will likely be a further step along this path.
A well-designed and targeted 'European preference' can help deliver important policy goals: boosting resilience, delivering higher economic growth, helping to pry open foreign markets, and better enforcing European values. But it also carries risks: reducing competition, provoking retaliation from trading partners, and facilitating ‘national preferencing’ when the EU desperately needs a genuine single market. For example, most public procurement contracts today go to bidders in the same country as the public authority. So a ‘buy European’ mandate
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