EU to regulate tech production outsourcing abroad
BRUSSELS, BELGIUM — The European Union (EU) unveiled its plan to prohibit European firms from outsourcing the manufacturing of sensitive technologies like artificial intelligence, advanced microchips, and supercomputers in other countries outside the union.
This strategy, part of the European Economic Security Strategy introduced by Commission President Ursula von der Leyen, intends to increase Brussels’ intervention in the investment and trade activities of European companies globally.
While the document refrains from explicitly mentioning China, it is evident that Beijing and Russia are prime targets of the new rule.
The strategy includes strengthening the EU’s control by reviewing its inbound investment screening and enhancing cooperation on export controls and outbound investment screening.
The most contentious area, outbound investment screening, would allow the EU to restrict outsourcing vital industries and technologies to potentially problematic countries.
The aim is to prevent companies from risking European intellectual property and national security by outsourcing supply chains to such countries.
EU competition chief Margrethe Vestager described the strategy as “country agnostic,” stating that the union would apply a “geopolitical filter” for risk assessments.
“We cannot treat supply dependencies on a systemic rival the same as we would treat the dependency on an ally,” she added.
Several EU countries also expressed wariness about the impact of the investment climate of the union and Brussels overstepping.
Businesses are also skeptical, with industry organization Business Europe saying that any initiative on outbound investment “needs to be carefully assessed and in our view should be well-targeted and used only as last resort when serious security concerns are effectively proven.”
The finalization of this new initiative is expected by the end of the year.
