EU Industrial Policy Pressure: Switzerland and Norway Warn That “Made in Europe” Could Leave Close Partners on the Sidelines
The European Union is trying to rebuild industrial capacity while cutting emissions, reducing dependence on vulnerable suppliers and responding to the subsidies offered by China and the United States. Its answer is increasingly assertive: public money and public procurement should create demand for products made within Europe.
That strategy has triggered a diplomatic warning from two of the EU’s closest economic partners. Norway, a member of the European Economic Area (EEA) but not of the EU, says Norwegian goods and companies must be treated as European on equal terms with their EU counterparts. Switzerland, which is linked to the Union through a dense network of bilateral agreements, is facing a different problem: it may be treated as a third country even when its firms are deeply embedded in European supply chains.
The dispute is therefore not about whether Europe should decarbonise. It is about whether the EU can pursue industrial preference without weakening the wider economic network that makes European production competitive.
The policy at the centre of the argument
The Commission published the Industrial Accelerator Act (IAA) on 4 March 2026 as a proposal for a framework to accelerate industrial capacity and decarbonisation in strategic sectors.1 The proposal sits within the Clean Industrial Deal, launched in February 2025 to support energy-intensive industries, clean technology, lower energy costs and more resilient supply chains.2
According to the Commission, the IAA would introduce “Made in EU” and low-carbon requirements for public procurement and public support schemes in selected strategic sectors. The policy focus includes electric vehicles, batteries, solar technologies, critical raw materials and other net-zero industries. The Commission also says that certain large investments by non-EU companies could face conditions linked to jobs, innovation, value creation and local-content compliance.2
The underlying logic is straightforward. If taxpayers finance a project, or if a government buys technology at scale, the spending should help build European production rather than simply purchase the cheapest available import. Yet local-content rules can also raise procurement costs, narrow the pool of suppliers and make it harder for companies to organise production across borders.
A February Reuters report captured the political tension before the proposal was announced. The Commission delayed the plan after disagreement over its geographic scope. France and other governments supported stronger protection, while Sweden and the Czech Republic warned that “buy local” requirements could discourage investment, increase tender prices and damage the EU’s competitiveness. Industry groups, meanwhile, wanted the rules to cover not only EU and EFTA countries but also other parts of their supply chains, including Britain and Turkey.3
Norway’s argument: EEA access should mean industrial inclusion
Norway’s objection is anchored in the structure of the EEA. The agreement gives Norway access to much of the EU internal market and requires the incorporation of relevant single-market legislation into the EEA framework. Oslo therefore sees a possible contradiction between formal market integration and a procurement regime that defines “European” narrowly as “EU-made.”
In June 2026, Norwegian Trade and Industry Minister Cecilie Myrseth sent the Commission a formal contribution on the IAA. The Norwegian government stated that goods and companies from Norway and other EEA/EFTA countries should be considered European on an equal footing with EU countries in order to preserve full internal-market access.4
“It is important that goods and companies from Norway and other EEA/EFTA countries are considered ‘European’ on an equal footing with EU countries,” Norwegian Trade and Industry Minister Cecilie Myrseth said.4
Oslo’s case is strengthened by the practical role Norway plays in European value chains. Norwegian firms supply energy, metals, minerals, maritime services, industrial components and emerging battery-related inputs. In 2024, Norway and the EU also signed a green strategic industrial partnership covering land-based raw materials and batteries. The agreement was intended to support sustainable value chains and give Norway a stronger channel for dialogue on EU policy and regulation.5
Norway’s message to Brussels is thus not a request for a special favour. It is a warning that Europe’s industrial security cannot be defined only by the location of the final factory. If Norwegian inputs are excluded from EU-funded projects, companies may respond by relocating activity, redesigning supply chains or seeking customers elsewhere. That would reduce the resilience the policy is meant to create.
Switzerland’s dilemma: close integration without EEA membership
Switzerland occupies a more exposed legal position. It is highly integrated with the EU economy, but it is not part of the EEA and does not automatically receive the same treatment as Norway, Iceland or Liechtenstein under every European measure. Swiss companies can therefore be inside a commercial supply chain while remaining outside the category of eligible European suppliers.
The Swiss State Secretariat for Economic Affairs (SECO) offers a recent illustration. Since 1 July 2026, new EU steel measures have applied to third countries, including Switzerland, while exempting the EEA/EFTA states Iceland, Liechtenstein and Norway. The measures provide a combined duty-free quota of 18.3 million tonnes and impose a 50% duty on imports outside the quotas.6
SECO says Switzerland is engaging with the EU to minimise restrictions on Swiss steel exports and to ensure compliance with bilateral free-trade agreements and World Trade Organization rules.6 The episode matters because it shows how a measure designed around Europe’s external trade perimeter can divide countries that are economically close and politically aligned.
The same question applies to public procurement and state support. Swiss manufacturers may contribute specialist machinery, electrical equipment, pharmaceuticals, precision components or low-carbon technologies to projects serving the EU market. If eligibility depends on a strict EU-origin threshold, their contribution could count as foreign even when the wider production network is European in every practical sense.
A January 2026 analysis by the Swiss foreign-policy think tank foraus argued that local-content rules could leave Swiss firms outside important procurement and investment opportunities. It reported that roughly 60% of Swiss mechanical and electrical engineering exports go to the EU and that the sector supports about 300,000 jobs in Switzerland.7 Those figures should be treated as estimates from a secondary source, but they illustrate why the issue attracts attention in Bern and among Swiss industry groups.
The economic trade-off
The EU has legitimate reasons to strengthen domestic capacity. European industry faces high energy costs, geopolitical risk, technology dependencies and intense competition from state-supported producers. The Commission’s Clean Industrial Deal aims to mobilise more than €100 billion for EU-made clean manufacturing and to support production in sectors that are central to decarbonisation.2
The question is whether preference rules will produce additional capacity or merely redistribute contracts among existing producers. A narrow definition of origin can have four effects:
Higher costs. Fewer eligible suppliers can reduce competition in tenders and increase the price of publicly funded projects.
Supply-chain distortion. Firms may shift assembly or nominal production into the EU to qualify, even when the most efficient inputs come from Norway, Switzerland or other partners.
Investment uncertainty. Companies may delay projects until they know how “European” content will be calculated and whether bilateral or EEA arrangements will be recognised.
Retaliatory pressure. Partners excluded from procurement or exposed to trade restrictions may challenge the measures politically or through legal channels.
These risks do not prove that the policy will fail. They do show why the geographical scope is as important as the industrial objective. The Commission’s own industrial strategy has repeatedly stressed the importance of a functioning single market, diversified partnerships and resilience across global value chains.8
Partner | Relationship with the EU | Main concern | Strategic contribution |
Norway | EEA member; EFTA state | EEA/EFTA goods and firms could be treated less favourably than EU suppliers | Energy, raw materials, metals, maritime and battery value chains |
Switzerland | Bilateral agreements; non-EEA | Swiss firms could be classified as third-country suppliers in procurement or trade measures | Precision manufacturing, machinery, electrical equipment, pharmaceuticals and finance |
EU member states | Full participation in EU institutions and funding | Protection may raise costs or reduce international competitiveness | Public finance, common regulation, industrial scale and procurement demand |
A test for Europe’s strategic autonomy
Brussels is attempting to reconcile two goals that can pull in opposite directions: strategic autonomy and open economic integration. Strategic autonomy requires more control over essential production. Open integration allows Europe to draw on trusted partners, specialise across borders and benefit from scale.
Norway and Switzerland are testing the boundary between those goals. Norway’s position is that EEA participation should translate into industrial eligibility. Switzerland’s position is more complicated: bilateral market access does not guarantee equal treatment, so the country must defend its interests sector by sector.
The most durable solution would be a tiered approach. EU rules could recognise suppliers from the EEA/EFTA area as fully European for relevant projects, while creating transparent criteria for other trusted partners with reciprocal market access, high regulatory standards and reliable supply chains. Origin calculations should reward meaningful production, research, jobs and emissions performance rather than only the final place of assembly.
Such an approach would preserve the political objective of strengthening European industry without turning “Made in Europe” into a rigid barrier. It would also align industrial policy with the reality of modern production: European competitiveness depends on networks that cross the EU’s political borders.
The warnings from Norway and Switzerland are an early stress test for the EU’s new industrial policy. Brussels wants public money to reinforce European factories, clean technologies and strategic supply chains. Oslo and Bern are asking whether “European” will mean the economic region that supplies and depends on the EU, or only the territory of the Union itself.
The answer will shape more than procurement rules. It will influence investment decisions, the credibility of the EEA framework, Switzerland’s bilateral relationship with Brussels and the EU’s ability to build resilient clean industries without isolating close partners. If the bloc designs preference rules broadly, clearly and proportionately, it can strengthen its industrial base while preserving trust. If it designs them narrowly, it may discover that the line between protection and self-inflicted fragmentation is thin.
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