Industrial Accelerator Act

IAA action attracts China reaction

The Industrial Accelerator Act (IAA) is barely out as a proposal and it is already creating an impact in China. According to the Financial Times, Beijing is threatening retaliation against the EU for the rules included in the IAA. While I find it deliciously ironic the Chinese commerce ministry is complaining that China “will suffer discrimination, which runs counter to basic market economy principles such as commercial voluntariness and fair competition” the truth of the matter is that at this level action begets reaction. Thinking otherwise is hopelessly naive.

A tool is only as useful as its use and this one faces risks in its adoption. This, however, should not be unexpected as I cautioned back in 2013 on a study for the European Parliament on the risks arising from what would then become the IPI Regulation. It was self-evident to me back then that changing the status quo would invite retaliation by any affected party.

The problem with retaliation on international trade is that it very often is designed to be asymmetrical so that the reaction hurts more the original agent than the benefit it derives from the action. This was clearly at play in the way China retaliated against the IPI last year. While the EU blocked access from Chinese medical devices for contracts above €5M and limited the share of Chinese suppliers to 50% of affected contracts, China's retaliation while looking symmetrical at face value covered a lot more value of trade since it imports more medical devices from the EU than it exports. In this particular example the retaliation happened in the same sector, but we should not be surprised in case China retaliates in other business sectors where the pain it can inflict is higher pain.

From then on, all bets are off and we will be drawn to escalation and a game of chicken to see who will blink first, a development that benefits no one. Personally I think the IPI is dead in the water after last year's retaliation, so let's see what happens with the IAA.

Portuguese government approves 'new' Public Contracts Code

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Infraestruturas de Portugal AI agent procurement: open weight models, OCR/RAG and deployment

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Some comments on the Commission's procurement public consultation report

The EU procurement consultation shows low participation and a divide: public buyers want flexibility, businesses prefer clear rules. Shared trends include less focus on lowest price and competition, but results may be unrepresentative.

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Portuguese government approves 'new' Public Contracts Code

Gemma 4 release shows how unfortunate Infraestruturas de Portugal timing on BIA was

Infraestruturas de Portugal AI agent procurement: open weight models, OCR/RAG and deployment

Some comments on the Commission's procurement public consultation report