wonders slimOn March 4, the European Commission published its proposal for the Industrial Acceleration Law. A regulation that seeks to boost demand for certain products manufactured in Europe, introducing local content requirements in both public procurement and foreign investments. Industries with high energy consumption, mobility and raw materials will be the main beneficiaries of this law, all of them traditional sectors of the European economic system. However, the approach of searching the trunk of memories because any time in the past seems better to us, which Karina sang, should not be chosen to lead the industrial future. Europe proposes this strategy with a questionable objective: to minimize the impact of the Chinese economy on two fronts. On the one hand, it is clear that the Asian giant is the world’s great factory and the Commission wants to avoid the creation of new commercial dependencies that violate the strategic autonomy of the Union. On the other hand, China’s role as an investor in Europe is worrying. Brussels fears that Chinese companies will invest in the production of goods within the European Union and that they will do so through investments that generate little added value for the economy of the Member States. The criticism of this vision, and also of the approach of the new legislation, is that it is based on an alarmist diagnosis. Firstly, because European industrial production as a whole has not decreased in absolute terms, but has increased by more than 15% since 2008. Nor have the sectors that the law seeks to protect have experienced a collapse in their activity. In sectors such as automotive or chemical products, the European Union successfully exports to third countries. Furthermore, although it is true that Chinese production has gained market share, this is a global phenomenon, not exclusively European, and to a certain extent expected given the size of its economy. When analyzing which goods critical to the European economy come from China, and cannot be replaced by other markets, the list is limited to raw materials such as rare earths and certain active ingredients in the pharmaceutical sector. Secondly, the Industrial Acceleration Law reinforces the European belief that, to protect certain industrial sectors, it is preferable to produce domestically at any cost instead of buying abroad at lower prices. What happens is that, by legislating and designing incentives in this direction, the Commission designates and chooses winning sectors and bets, in its desire to protect, on an economic structure that does not prioritize productivity, competitiveness and innovation. In this way, to achieve the objective established by law of manufacturing industries going from 14.3% to 20% of European GDP in 2035, it will be necessary to reduce the relative weight of other economic sectors. By promoting this strategy, the regulations make the mistake of favoring a mirage of growth and stability in sectors whose relative importance is in decline and which are no longer the main engine of innovation. At the same time, the law does not reinforce the economy that currently accounts for most of the productive growth: digital services. The percentage of GDP that Europe dedicates to these technological sectors is much lower than that allocated to traditional industry, and drastically lower than the economic effort made by countries that seek to position themselves on the technological frontier of high added value, such as the United States or Japan. As a consequence, the Industrial Acceleration Law shows a nostalgic economic vision, anchored in the past and in medium technologies. While the European Union is committed to the extraction of raw materials or the steel and cement industries, powers such as the United States and China concentrate their objectives on artificial intelligence and robotics. Looking back is sometimes good, Karina said, but it would be much more accurate if the EU decided to look forward to live and lead without fear. Óscar Guinea is director of the European Center for International Political Economy (ECIPE). Elisa P. Odelot is a journalist.
