A Brussels Effect


Anu Bradford’s ‘Brussels Effect’ is the theme of her article ‘The Global Rise of a Regulatory Superstate in Europe’. Published in the the Globalist she says that the European Union (EU) influences worldwide markets through its regulatory and legal framework, impacting on the everyday lives of citizens around the world by setting global rules governing a variety of areas, such as food, chemicals, antitrust and the protection of privacy.

As the world’s largest trading block, the EU essentially dictates the rules and regulations for products that are traded. Rules and regulations promulgated in the EU have penetrated many aspects of economic life, both within Europe and outside. Brussels has pursued a process of ‘unilateral regulatory globalization’ – a ‘Brussels Effect’ – that mainly occurs through market mechanisms. To be effective and to exercise global regulatory power, the EU does not have to do anything except regulate its own market. The size and attractiveness of its market — the largest in the world — does the rest.

Trading with the EU requires companies to make a basic business decision. They either, adopt one set of standards for the EU and include multiple sets of standards for the rest of the world; or, they adopt the EU standard and drop the multiple standards. It makes good business sense to have one set of rules that governs their global conduct or production.

The inability to conclude the ongoing WTO trade talks is one indication of how difficult it is to get anything done in a world where many countries are powerful, but no single country is powerful enough to set the rules. Regulatory power is one of the few areas of influence where unilateralism still works, quietly and effectively. Regulatory power like that of the EU is more durable, more deployable and less easily undermined by others. Therefore, regardless of its financial and political shortcomings, the EU is, and is likely to remain, a major force in the global economy.

Stephan Richter is the editor-in-chief of the Globalist, a daily on-line magazine on the global economy, politics and culture, launched in January 2000. He also is the President of The Globalist Research Centre.  Linking to the above in his article article ‘The EU: Global Regulation King by Default’, Richter says;

“Not the theatres of Afghanistan or Iraq, but the theatre of global regulation is the location of future global power. By omitting its voice, the United States is excising itself from helping to set regulatory standards that its people will have to accept. U.S. policy-makers have created a vacuum, the EU has moved to fill it and Asia sides with the Europeans”.

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