Anu Bradford - The Brussels Effect: How the European Union Rules the World

Summary

Anu Bradford, a professor at Columbia Law School, discusses the 'Brussels Effect' in an IAEA discussion, highlighting the EU's significant influence on global regulations. Despite perceptions of EU decline, Bradford illustrates how the EU's regulatory power shapes global practices across various industries. She addresses criticisms of the Brussels Effect, including concerns over innovation, protectionism, and regulatory imperialism, and speculates on the future of EU regulatory power post-Brexit.

Takeaways

• 🌍 Anu Bradford discusses the 'Brussels Effect', which refers to the European Union's ability to regulate the global marketplace through its large and wealthy market.
• 📈 The EU's regulatory influence extends beyond its borders due to global companies complying with EU regulations to access its market and to streamline their operations worldwide.
• 🔍 Examples of the Brussels Effect include the GDPR's impact on global data privacy policies and European definitions of hate speech influencing content moderation on American tech platforms.
• 🏢 The discussion highlights how European regulations affect global industries, including technology, agriculture, and manufacturing.
• 🤔 Bradford questions why there isn't a 'Washington Effect' or 'Beijing Effect', suggesting that regulatory power requires not just a large market but also sophisticated regulatory institutions and political will.
• 🇪🇺 The EU's regulatory power is contrasted with the U.S.'s hesitance to intervene in markets and China's growing but not yet fully realized regulatory capacity.
• 💡 The talk addresses criticisms of the Brussels Effect, including concerns about regulation's cost, its impact on innovation, and accusations of protectionism.
• 🌐 The potential for the Brussels Effect to spread protectionist policies is a concern, as other countries may mimic the EU's regulatory strategies.
• 🇬🇧 Brexit's impact on the Brussels Effect is debated, with the potential for the EU to become more stringent in regulations without the UK's pro-market influence.
• ⏳ The future of the Brussels Effect is uncertain, with considerations of economic power, regulatory capacity, and the evolving political landscape influencing its持续性 and scope.

Q & A

What is the 'Brussels Effect' as discussed by Anu Bradford?

The 'Brussels Effect' refers to the European Union's unilateral ability to regulate the global marketplace due to its large and wealthy consumer market. Companies often comply with EU regulations not only within the EU but also extend these regulations globally to avoid the cost of complying with multiple regulatory regimes.

How does the EU's GDPR influence global companies like Google and Apple?

Global companies such as Google and Apple follow the European General Data Protection Regulation (GDPR) for their privacy policies, not only when dealing with European data subjects but across the world, demonstrating the EU's regulatory influence on global practices.

Why does the EU's regulatory power extend beyond its borders?

The EU's regulatory power extends beyond its borders because companies often find it more efficient to apply EU regulations globally rather than maintain separate standards for different markets, thus transplanting European regulations worldwide.

What are the necessary conditions for a large market to have regulatory influence like the EU, according to Anu Bradford?

According to Anu Bradford, a large market needs to have not only the size but also the regulatory institutions and the political will to deploy that capacity in order to have regulatory influence like the EU.

How does Anu Bradford respond to the criticism that EU regulations are costly and deter innovation?

Anu Bradford acknowledges that some regulations may be costly and dampen innovation, but she also points out that regulation can lead to more efficient and lower-cost products. She argues that the relationship between regulation and innovation is more nuanced than often thought.

What is Anu Bradford's view on the criticism that the EU targets American tech companies out of protectionism?

Bradford counters this by noting that often it's American companies themselves that initiate complaints against their peers in the EU, and that EU actions have benefited other American companies. She suggests that the EU's actions are not necessarily driven by protectionism.

What is the potential risk if the EU were to use the 'Brussels Effect' as a tool for protectionism?

If the EU uses the 'Brussels Effect' for protectionism, it could lead to a global spread of protectionist measures, with other countries copying the EU's approach and potentially hindering global trade and innovation.

How does Anu Bradford address the criticism that the 'Brussels Effect' is a form of regulatory imperialism?

Bradford argues that the EU is only regulating its own market, which it has the sovereign right to do, and that companies choose to extend these regulations globally for efficiency. She also suggests that in some cases, EU regulations might be offsetting deficiencies in other countries' democratic processes.

What is the impact of Brexit on the 'Brussels Effect', as discussed by Anu Bradford?

Anu Bradford suggests that Brexit might not undermine the 'Brussels Effect' as much as it underscores it. The UK, despite leaving the EU, will still be significantly influenced by EU regulations because of the EU's importance as a market for UK exports.

How does Anu Bradford foresee the future of the 'Brussels Effect' in relation to the rise of other economic powers like China?

Bradford predicts that the 'Brussels Effect' may outlast the EU's economic power due to the high GDP per capita being a better predictor of regulatory willingness and ability. She suggests that China's regulatory influence may take longer to materialize due to its focus on economic growth over regulation.

Outlines

00:00

🌍 Opening Remarks and Introduction to the Brussels Effect

The video begins with Barry Colfer, the director of research at the IIA, welcoming viewers to a discussion on the Brussels Effect with Anu Bradford, a professor at Columbia Law School. They acknowledge the ongoing crisis in Ukraine and its impact on the global community. Professor Bradford is introduced as an expert in international trade law, EU law, and competition law. She has written 'The Brussels Effect', which challenges the notion that the EU is a declining power. Instead, she argues that the EU significantly influences global regulations, affecting companies worldwide, including tech giants like Google and Apple, which adhere to GDPR regardless of location. The discussion is set to cover the EU's regulatory power and its global impact.

05:03

📚 The Phenomenon of the Brussels Effect

Anu Bradford explains the concept of the Brussels Effect, which describes the EU's ability to unilaterally regulate the global marketplace. The EU's large consumer market compels global companies to comply with its regulations, often extending these regulations worldwide to avoid the costs of multiple regulatory compliances. This phenomenon is not limited to tech; it influences various sectors, including agriculture, manufacturing, and more. The EU's regulatory power stems from its market size, sophisticated regulatory institutions, and the political will to use them. In contrast, other large markets like the US and China either lack the regulatory capacity or the political will to exert similar influence.

10:03

🔄 Criticisms and Considerations of the Brussels Effect

The discussion moves to common criticisms of the Brussels Effect. Critics argue that EU regulations are costly and stifle innovation, favoring consumer satisfaction over disruptive innovation. However, Bradford counters that some regulations, like those promoting energy efficiency, can also lead to cost-effective products. Another criticism is that the EU targets American tech companies out of protectionist motives, but Bradford points out that many complaints originate from American companies themselves. Lastly, there's the political critique of 'regulatory imperialism', where the EU is seen as imposing its regulatory choices on others. Bradford argues that the EU is merely regulating its own market, and it's the global companies' decision to extend these regulations worldwide.

15:06

🇪🇺 The Future of the Brussels Effect and Brexit's Impact

Bradford contemplates the future of the Brussels Effect, suggesting that the EU's regulatory power may outlast its economic power due to high GDP per capita driving regulatory demand. She also addresses Brexit, arguing that while the UK's departure may reduce the EU's market size and regulatory capacity, it could also lead to stricter regulations as pro-market UK influence is lost. Post-Brexit, the UK remains a 'rule taker' rather than a 'rule maker', still subject to EU regulations due to the EU's importance as a trading partner. This dynamic, she suggests, undermines the UK's promise of regulatory sovereignty.

Keywords

💡Brussels Effect

The 'Brussels Effect' refers to the European Union's unilateral ability to regulate the global marketplace through its large consumer market. Companies often comply with EU regulations not only within the EU but also globally to avoid the cost of complying with multiple regulatory regimes. This concept is central to the video's theme, illustrating how the EU's regulatory power extends beyond its borders, influencing global business practices. An example from the script is the adherence to the General Data Protection Regulation (GDPR) by tech giants like Google and Apple, which shapes their privacy policies worldwide.

💡GDPR

GDPR stands for the General Data Protection Regulation, a regulation in EU law on data protection and privacy for individuals within the European Union and the European Economic Area. It serves as a prime example in the video of how the EU's regulatory power impacts global practices, as companies like Google and Facebook follow GDPR guidelines for data protection, not just within the EU but across the globe.

💡Regulatory Power

Regulatory power, as discussed in the video, is the ability of a governing body to influence behavior and practices through the creation and enforcement of rules and regulations. The video emphasizes the EU's regulatory power as a form of 'soft power' that shapes global standards in various sectors, from technology to agriculture, as companies often adopt EU regulations to streamline their operations worldwide.

💡Market Incentives

Market incentives in the video are depicted as the driving force behind the global adoption of EU regulations. Companies find it economically beneficial to extend EU regulations across their global operations to avoid the complexity and cost of adhering to multiple regulatory standards in different markets. This concept is integral to understanding the 'Brussels Effect' and how it operates.

💡Global Companies

Global companies are businesses that operate across international borders, often having a significant impact on the global economy. In the context of the video, these companies are key actors in the 'Brussels Effect,' as they choose to comply with EU regulations worldwide to access the EU market and to simplify their operations, thereby spreading EU regulatory influence globally.

💡EU Law

EU law encompasses the legal framework governing the European Union and its member states. The video discusses how EU law, particularly in areas like data protection and competition, has a profound impact on global business practices. The script mentions how EU regulations on hate speech and privacy are followed by major tech companies, showcasing the reach and influence of EU law beyond Europe.

💡Protectionism

Protectionism in the video is presented as a potential criticism of the 'Brussels Effect,' suggesting that EU regulations might be used to protect domestic industries at the expense of global competition. The speaker counters this by pointing out that many of the companies subject to EU regulations are not European and that the regulations often reflect broader consumer and market demands rather than protectionist policies.

💡Regulatory Capacity

Regulatory capacity refers to the ability of a government or organization to create and enforce regulations effectively. The video argues that while many countries have large markets, the EU's sophisticated regulatory institutions give it a unique capacity to shape global regulations. This capacity is a key factor in the 'Brussels Effect,' allowing the EU to convert its market power into regulatory influence.

💡Political Will

Political will, as discussed in the video, is the determination and support of political actors to implement and enforce certain policies or regulations. The video suggests that while the U.S. has the regulatory capacity, there has been a general political reluctance to intervene in markets, allowing the EU to take a more prominent role in global regulation.

💡Strategic Autonomy

Strategic autonomy in the video refers to the ability of a nation or region to make and enforce decisions that serve its interests without being unduly influenced by external powers. The concept is relevant to the discussion of the EU's regulatory power and how it might be used to protect European interests in areas like technology and data privacy.

💡Brexit

Brexit, short for 'British exit,' refers to the United Kingdom's decision to leave the European Union. The video discusses how Brexit might impact the 'Brussels Effect,' suggesting that while the UK's departure reduces the EU's market size, it also removes a pro-market voice that could have moderated EU regulations. The video concludes that Brexit may paradoxically strengthen the 'Brussels Effect' by allowing more stringent regulations to be drafted without UK influence.

Highlights

Introduction of the speaker, Anu Bradford, and her expertise in international trade law, EU law, and international competition law.

Recognition of the ongoing crisis in Ukraine and its impact on the global community.

Discussion on the concept of the 'Brussels Effect' and how the European Union regulates the global marketplace.

Examples of the EU's influence on global companies, such as GDPR's impact on privacy policies worldwide.

The EU's regulatory power extending beyond its borders due to the size of its market and the compliance of global companies.

Comparison of the EU's regulatory influence with that of the US and China, highlighting the necessity of market size, regulatory capacity, and political will.

Critique of the 'Brussels Effect' as being costly and potentially deterring innovation.

Argument that regulation can also promote competition and efficiency, contrary to the common belief that it stifles innovation.

Criticism of the EU's regulatory approach as a form of protectionism, particularly against American tech companies.

Discussion on the potential for the 'Brussels Effect' to be used as a tool for protectionism and the risks associated with it.

Concerns about the EU's regulatory power being seen as a form of 'regulatory imperialism', imposing European preferences on the rest of the world.

The role of Brexit in potentially undermining the 'Brussels Effect' and the continued influence of EU regulations on the UK.

The future of the 'Brussels Effect' and whether it will persist in the face of growing regulatory power in other regions.

The impact of Brexit on the UK's ability to influence EU regulations and the consequences of being a 'rule taker' rather than a 'rule maker'.

Conclusion on the enduring nature of the 'Brussels Effect' despite Brexit and the limitations it places on the UK's regulatory sovereignty.

Transcripts

[Music]

good afternoon everyone and i'm very

pleased to welcome you to this timely

iaea discussion my name is barry colfer

and i'm the director of research here at

the iia

we're delighted to be joined today by

anu bradford

henry l moses professor of law and

international organizations at columbia

law school

who's been generous enough to take time

out of her busy schedule to speak with

us

we host this meeting whilst being highly

conscious of the rapidly deteriorating

situation in ukraine and in some ways

i wonder if we should be talking about

anything other than this situation to

our east

it's not for today but we recognize the

situation and we think of those who are

suffering

professor bradford will speak to us for

about 20 minutes and then we'll go to

questions and answers with you our

audience

you will be able to join the discussion

using the q a function on zoom which you

should see on your screen please feel

free to send questions in throughout the

session as they occur to you and we'll

come to them once professor bradford has

finished her presentation

a reminder that today's presentation and

q a are both on the record

please also feel free to join the

discussion on twitter using the handle

at iiea

so

to introduce our speaker

anu bradford's research focuses on

international trade law european union

law and compare of an international

competition law

anu holds an sjd and llm from harvard

law school and a law degree from the

university of helsinki

prior to her academic career she

practiced competition and eu law in

brussels and was an advisor at the

finnish parliament and at the european

parliament professor bradford is the

author of the brussels effect how the

european union rules the world

and is currently working on her

forthcoming book entitled the battle for

the soul of the global internet

we're really delighted that you can be

with us today professor bradford and the

floor is yours

thank you so much barry and good

afternoon everyone i am delighted to

share this conversation with you and let

me also

add

my own uh thoughts uh

for reason and peace to to prevail i'm

extremely concerned about the events

unfolding i'm watching them from the

united states none of us are insulated

from them

so uh uh let me just recognize that and

uh it is part of when we discuss with

talking about one element of power today

but power comes in many forms and i did

not think that we would need to be

focusing as much on military power as we

need to be focusing on today but um i do

want to talk about a different type of

power today which is regulatory power

and let me first uh mention maybe why i

wrote the book called the brussels

effect how the european union rules the

world

and it was really my response to this

conversation that was increasingly

negative about the europe's role in the

world the idea that the european union

is inevitably a declining power

a a past power that has little ability

to shape the affairs of the world today

because that is not the kind of european

union that i encounter daily in my

research and teaching

so let me give you a few examples of

where we see the european union uh

exercising a tremendous global influence

so if we start from here in the united

states where i'm looking at the world

today and we go to silicon valley west

coast of the united states i think some

of the most powerful companies that are

headquartered in europe most of them in

dublin but that really originate from

silicon valley and operate across the

world

if you look at the privacy policies

of our companies such as google or apple

or facebook or microsoft they are

following the european general data

protection regulation the gdpr not only

when they are dealing with their data

users uh in data subjects in europe but

across the world

and if we stay within the technology

industry and think about for instance

the uh the hate speech so the kind of

speech content that these platforms are

taking down from their platforms they

are not looking at the first amendment

of u.s constitution but they are looking

at european definition of hate speech

and by day we are talking about facebook

so meta these days we're talking about

youtube uh we're talking about twitter

so american companies again getting

their cues from the european regulators

and this is not just the question of

american companies or the technology

industry

we also see the european law shape how

timber is harvested in indonesia what

kind of pesticides are used by farmers

are in africa

what kind of facilities chinese dairy

factories install in those factories

what kind of chemicals japanese toy

manufacturers use when manufacturing

toys

so these are really examples of the

european regulations shaping what we are

producing and what we are consuming

so these are examples of a phenomenon

that i have called the brussels effect

and by the brussels effect i i refer to

the european union's unilateral ability

to regulate the global marketplace so

the eu is one of the largest and

wealthiest consumer markets in the world

and there are very few global companies

that can afford not to trade uh in the

eu

so these companies need to comply with

european regulations as the price for

accessing the 450 million also

relatively wealthy consumers

that's not surprising

where it gets interesting that often

these companies conclude that it is in

their interest to extend the european

regulations across their global

production and they they they global uh

services and their global conduct

because they want to avoid the cost of

complying with multiple different

regulatory regimes in different places

so all the eu needs to do

is regulate the single market it is then

the global companies and they market

incentives that transplant the european

regulations across the world

so this is what i call influence and

what i call an element of power it is a

certain kind of power and part of the

book that i wrote that the conversation

was really to uh invite a discussion of

different forms of power so that we

cannot make a blanket assessment that

the european union is weak in some areas

european union is weak

today when dealing with ukraine european

union is operating on the territory

where it is substantially weaker than

when it operates in the territory where

it has the power and it can rely on the

markets to actually externalize that

power

um so that kind of power also matters it

does affect us every day everywhere in

the world it affects the food we eat the

air we breathe and the products we

produce and consume and to me that is

also influence and relevance and that is

one form of important power

so let me maybe now ask the question why

do we talk about the brussels effect and

north washington effect or beijing

effect

because european union is certainly not

the only large market in the world

so why do we then see europe have this

power because ultimately any large

economy could potentially have this

power if you have costa rica and you

decide to now be very stringent

regulator of the environment the

companies can just decide not to trade

in costa rica but it's much harder to

decide not to trade in european union

but china is big the u.s is big so why

no beijing effect and why no washington

so what i argue in the book that it's

not enough to have the large market that

is the necessary precondition but that

not that alone is not enough

you also need to have the regulatory

institutions that allow you to unleash

that power of the market and convert it

into tangible regulatory influence

so yes you have large markets

but for instance in china you do not yet

have the the sophistication the

expertise of the bureaucracy of brussels

that is able to generate the kind of

rules and apply them even across your

borders the way that european union is

able to do across the many different

domains china is in the process of

building that capacity but it still has

a way to go

the u.s on the other hand there is

plenty of regulatory capacity residing

in washington dc what is missing is the

political will to deploy it

so since about 1990s the u.s has whether

you have a democrat or a republican

running the white house you have had a

general hesitation to intervene in the

markets there has been a trend towards

the regulation across the board

americans like markets more there's been

much more skepticism of the government

to intervene so while the u.s has been

stepping back it has been seeding the

market for the europeans to then enter

and take that role of the global

regulator so the europe the americans

have not wanted to regulate so the

political will has not been there

let me offer a caveat though so when we

for instance talk about technology the

conversation is shifting and there is

now an increasing recognition where

americans are re-evaluating the kind of

techno libertarian foundations of the

american regulatory state and there's

certainly a different tone in the

congress debating whether we actually

would need to

uh rewrite our antitrust laws with

president biden nominating the kind of

enforcers to his administration that are

now willing to try the boundaries of

existing antitrust law there's a debate

whether finally the u.s should no longer

be an outlier and establish and adopt a

federal privacy law whether they should

be rewriting the so-called section 230

of communications decency act that would

start exercising more discipline over

the platforms when it comes to content

moderation that takes place on those

platforms so there's a different

conversation about regulation at least

in the domain of technology today in the

u.s but it's a different question

whether that would actually translate

into the kind of political will that

will be shown as actual concrete

legislations

so let's go back to you need to have the

large market you need to have the

regulatory capacity and you need to have

the political will to deploy that

capacity and currently

across the board european union has been

the only power that meets those criteria

so let me now say a few words on whether

this is a good thing or bad thing so my

main argument in the book is that the

brussels effect exists by explaining how

it happens how pervasive it is and i

leave it for the reader to decide

whether this is something we should be

celebrating or whether it is a matter of

concern and i don't think there's a

uniform answer to that but let me let me

uh run by you three common criticisms

that have been leveled against the

brussels effect

so one is this idea that regulation is

costly

and it also deters innovation we hear

that over and over again from the

companies um

and here i would pause and take this

criticism seriously because it may

indeed be that some regulations are

costly and they do dampen innovation i

remember when i was working on the book

i was talking to one uh tech executive

and i asked him what is the difference

when you deal with european and american

regulators

and he told me that well

what europeans want they want us to

satisfy the consumer need and what

americans want they want us to change

the world or allow the world to be

changed

and if every tech company innovated

towards satisfying the existing consumer

need as opposed to changing the world

yes some of the most disruptive

innovations that can be beneficial to

the humanity would never take place so i

do take it seriously

at the same time i'm not willing to say

that regulation every time leads to aaa

lack of innovation we have a lot of

energy efficient technologies for

instance that are good for the

environment but that also end up

creating more efficient products that

can be also lower cost products there's

a wonderful book by a french economist

thomas philippines who teaches at nyu

here in new york um called the great

reversal how america gave up on free

markets and he shows how the lack of

anti-trust the lack of competition

regulation in the u.s has led to

excessively concentrated markets to high

profits for the companies and high

prices for consumers whereas in europe

there is more regulation so there is

more competition that's why i pay a

fraction for my flight ticket from

brussels to madrid compared to when i

fly from new york to chicago that's why

my cell phone bills are so much less in

europe than they are in america because

there's more competition in europe

because there is more regulation

so this relationship being between

regulation and innovation and efficiency

is somewhat more nuanced than often

thought about

so let me now address the second

criticism that often you hear level

against the brussels effect and that is

this idea that this is just a

manifestation of european envy driven

protectionism

look who the europe is going after in

all these tech cases it's always the

american companies

10 billion in fines against google right

now there's a case open against apple

against amazon against meta and against

google

so it is really always the american

companies and europe is just not able to

generate its own tech companies so it's

trying to level the playing field and

bring down the ones you can actually

innovate

so here i would remind you of

there not being a european search engine

that europeans are trying to protect

they're not being really a competitive

social media websites

if you think about for instance google

which was the company that first brought

the complaint against google it was an

american company it was microsoft if you

think about another case that has been

recently in in headlines uh the intel

case who was the big winner when there

was a fine against intel it was another

american company amd

so when i was speaking to the u.s

ambassador under president obama he said

he never lobbied in these competition

cases

because there were american companies on

both sides of the dispute so often it's

the u.s companies fighting day civil war

in the european territory because

washington dc has not been willing to

extend anti-trust remedies to them

so it's not that clear that there would

have been protectionist impulse behind

these regulations but again here i want

to add the kind of caveat that i added

when i mention how the conversation

about regulation is shifting in the u.s

conversation is shifting in europe and

around the world about regulation and

the general political environment is now

much more hospitable to protectionism so

there are voices growing in europe who

are upset that the regulation has not

been protectionist enough and calling

for more industrial policy driven merger

control for instance this was a big

concern when the europeans blocked

the the uh the notified acquisition

attempt between siemens and austrian and

basically suggesting that this was

europe's opportunity to build a european

champion that could compete against the

chinese counterparts

well

commissioner festar basically said that

look we are here to protect consumers

this is not good for the consumers we

are not here to conduct industrial

policy

french and germans were not impressed

and they issued this manifesto calling

for more political veto and more

industrial policy considerations are

into the competition policy and there's

a broader conversation now about

strategic autonomy digital sovereignty

technological sovereignty there are

pressures towards leveraging the

brussels effect as a tool for

protectionism

but let me tell you one thing

brussels effect can be effective in

exporting regulations that are benign

but it can also work as a tool for

exporting protectionism should the eu

turn its regulation as an instrument of

protectionism i can tell you that also

would be spreading across the world

there will be then brazilian

uh agency copying from the eu's playbook

when european companies are trying to

acquire local companies and say look

that's what you are doing as well it's

national champions we do not let this

merger proceed so the you would need to

be careful at what uh that it may get

more than it actually bargained for

let me now address the last criticism

that you often hear and that is more of

a political criticism this idea that the

brussels attack is a manifestation of

european regulatory imperialism we are

writing the rules for the world and

making the rest of the world to

basically accept the trade-offs that

european consumers are making when it

comes to regulation

and again i wouldn't dismiss this

concern out of hand because the truth is

that we do have african farmers

refraining from using gmos even if they

probably would need

some of them those gmos to feed their

growing populations

we have a lot more environmentally

friendly products a lot more

a privacy for american consumers

probably even more than they at least

directly ask for so the question is

whether we are overriding the the

preferences of democratic governments in

other places who no longer can draft and

draft the rules that serve uh the the

will of failed populations

so here i would have two responses that

the european union can extend so one is

that

european union is only regulating its

single market

which it has the sovereign right

and even the sovereign obligation to do

it is not european decision if facebook

decides to extend european privacy

protections to other side of the world

as well because it is more beneficial

and efficient for them to have uniform

uh regulations so ultimately that's

different from regulatory imperialism

there's also another argument which i

think is more controversial but it's

also very interesting

which is that there are many in the u.s

who say that the current state of

regulation doesn't actually reflect our

democratic preferences if you look at

the leeway that consumer that the

corporations have through lobbying

influencing regulation this is not

how little privacy our consumers want

our internet users if you look at them

they want more privacy we just have not

been able to generate regulations so the

european regulations are offsetting some

of the deficiencies in the current uh

american

democratic processes

so let me return it to the q a but let

me just make two comments on the future

of the brussels effect so so one is that

we should probably talk about whether

this will last a long time even if i

convince you that european union right

now has this power

will beijing effect be there ten years

from now

so i'm happy to take that up uh in the q

a as well in the book i argued that the

gdp per capita is a better predictor of

the country's willingness and ability to

regulate than the gdp as such there's

going to be a long while before the

chinese gdp per capita the wealth is at

the level that there's demand and actual

willingness to regulate at that same

same level

and um that means that the european

regulatory power will likely outlive its

own regulatory uh its own uh economic

power as such

the second is that i i would mention

this is ireland so i think we we do

think about brexit a lot and uh so let

me end with the with the remark about

brexit and how that intersects with the

brussels effect so there was some

argument that brexit would undermine the

brussels effect and i understand the

argument because we just lost a big

chunk of the market share and the market

size is an important first condition for

the regulatory power that the eu can

exercise

um we also i would argue lost a lot of

good regulatory capacity i think the

braves were pretty good they were very

good uh

civil servants they were good judges i

wanted them to be part of those

conversations and they are gone

so they lost a market share it lost

market power and it lost some regulatory

capacity

what probably didn't lose was the idea

that the uk wasn't always willing to

support stringent regulations and that

voice is now gone

what it means for the proponents of

brexit though is that it doesn't mean

that the uk will no longer need to be

chained to the regulations coming from

brussels it means that there's probably

more stringent regulations being drafted

in brussels because the uk's pro-market

voice is not there to shape them there's

more space for french and german

preferences to prevail

yet the uk has chosen to be a rule taker

and not a rule maker because the uk will

continue to feel the effects of

regulation the eu continues to be the

most important market the export market

for the uk it's the number one

destination for most critical uk

industries whether we talk about

financial services whether we talk about

pharmaceuticals chemicals uh aerospace

uh and uh if you think about being a uh

uk car manufacturer do you want to

prepare your car so that you can sell

them in the uk or in the market that is

six size six times the size of your

domestic market

you do need the european market and the

question is do you really want to set up

a second production line to produce

different variants for your domestic

market

so it leaves me to conclude that when it

comes to brexit brexit doesn't really

undermine the brussels effect it's the

brussels effect that does undermine

brexit and ultimately the promise of

regulatory sovereignty

is much curtail because of the dynamics

underlying the brussels effect

so let me maybe end it there because i'm

eager to hear from the audience and

build on any questions that i i mention

or fail to mention and hear from you

next

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you