The EU has long argued that multilateralism and rules-based trade are essential for sustainable growth. It is time for the bloc to apply that principle to its own policies.

by Xinhua writer Zhang Zhaoqing

BRUSSELS, March 6 (Xinhua) -- The European Commission unveiled its long-delayed and deeply controversial Industrial Accelerator Act (IAA) on Wednesday. Billed as a hard-nosed ambition to boost the bloc's green transition and industry competitiveness, the draft instead risks turning Europe's biggest economic headache -- high-cost and bureaucratic delay -- into a political theatre of "Buy European" rules.

By prioritizing discretionary barriers over market logic, Brussels is drifting toward a protectionist experiment that could raise costs, deepen uncertainty in global trade, and slow the green transition it claims to champion.

The Commission's ambition is clear: to see manufacturing reach 20 percent of EU GDP by 2035 by steering government subsidies and procurement toward "Made in EU" and locally produced "low-carbon" products.

While the instinct to build resilience is legitimate, the instrument of choice is a blunder. The IAA falters on three critical fronts.

First, it leans on discrimination without a globally recognized rulebook. "Made in EU" may sound like a strategic label, but in practice, it becomes an arbitrary sorting device. Even the Commission's effort to soften the edge by extending access to selected partners on "reciprocity" grounds underscores the point: it is Brussels, not a multilateral rule-set, that decides which markets are sufficiently open, and when.

That discretion comes at a price. By prioritizing "Made in EU" eligibility over best-value and price-and-performance competition, the EU risks baking higher costs into public procurement -- costs that ultimately fall on taxpayers through higher public spending and tighter budgets.

Second, the Act risks reinforcing Europe's existing disadvantages rather than removing them. As European Parliament member Markus Ferber has said, the real constraints on European industry are high energy costs, excessive regulation and weak innovation momentum. Tweaking procurement criteria solves none of these problems. Instead, by narrowing competition and adding compliance layers, the policy can push up project costs and slow delivery -- a perverse outcome for a bloc that equates industrial revival with climate leadership.

As the Bruegel think tank has noted, effective industrial policy must be cost-effective and embrace global comparative advantages. Yet the IAA's preference and eligibility rules risk slowing domestic transformation by shutting out foreign expertise, particularly in clean-tech value chains where Europe desperately needs speed, scale and efficiency.

Third, the foreign-investment pillar sends a chilling signal to global capital. The draft subjects large investments in strategic sectors to conditions tied to local value creation and, most controversially, technology-transfer obligations and partnership structures. Whatever the political rationale, "forced transfer" is not market logic -- it is a deterrent. Technology cooperation should be based on commercial willingness, not administrative compulsion.

The EU has long argued that multilateralism and rules-based trade are essential for sustainable growth. It is time for the bloc to apply that principle to its own policies. If Brussels truly aims to accelerate industrial transformation, it should focus on the fundamentals: cheaper and more reliable energy, reduced red tape, faster permitting, and an open, competitive environment that rewards innovation and efficiency -- the true drivers of durable competitiveness.

"Keeping competitors out" may be sold as resilience in the short term, but it ultimately serves as a billboard for anxiety and institutional incapacity. Without a renewed commitment to fair, open competition, the IAA may end up as protectionism painted green -- with the final bill paid through a stalled transition and eroded credibility for a bloc that has long portrayed itself as a defender of free trade.