The Commission said the IAA would target "strategic sectors" including energy-intensive industries, net-zero technology manufacturing and the automotive supply chain, as Brussels seeks to raise manufacturing to 20 percent of the EU's gross domestic product by 2035.

BRUSSELS, March 4 (Xinhua) -- The European Commission on Wednesday proposed the controversial Industrial Accelerator Act (IAA) to prioritize "Made in EU" goods in public support and procurement, even as deep divisions persist among EU member states and the plan draws criticism from some of the bloc's trading partners.

In a draft proposal, the Commission said the IAA would target "strategic sectors" including energy-intensive industries, net-zero technology manufacturing and the automotive supply chain, as Brussels seeks to raise manufacturing to 20 percent of the EU's gross domestic product by 2035.

The draft aims to embed sustainability, resilience and "Made in EU" criteria into public procurement and state support schemes to boost demand for EU-made and low-carbon products, a provision that was regarded as a trend to protectionism and has drawn criticism from trade partners.

The proposal would also tighten conditions on foreign direct investment in what the Commission describes as strategic industries, including batteries, electric vehicles, solar photovoltaics, and the extraction, processing and recycling of critical raw materials.

For major investments in those sectors exceeding 100 million euros (about 116 million U.S. dollars), the draft sets eligibility requirements including capping foreign ownership at 49 percent and imposing mandatory technology-transfer obligations.

The proposed IAA, an initiative under the EU's Clean Industrial Deal, has become a flashpoint within the bloc, exposing fault lines between countries pushing for stronger "EU preference" rules and others warning that strict local-content requirements could distort supply chains, add bureaucracy and invite retaliation.