The Brussels Effect – The EU’s Impact upon Global Markets
In her important new book, Columbia Law professor Anu Bradford argues the EU remains an influential superpower that shapes the world in its image. By promulgating regulations that shape the international business environment, elevating standards worldwide, and leading to a notable Europeanization of many important aspects of global commerce, the EU has managed to shape policy in areas such as data privacy, consumer health and safety, environmental protection, antitrust, and online hate speech.
The Brussels Effect shows how the EU has acquired such power, why multinational companies use EU standards as global standards, and why the EU’s role as the world’s regulator is likely to outlive its gradual economic decline, extending the EU’s influence long into the future.
From Politico EU on The Brussels Effect:
THE BRUSSELS EFFECT: Anu Bradford, a professor at Columbia Law School, wrote the book on EU influence — literally. In early 2020, she published “The Brussels Effect: How the European Union Rules the World.” It details how the European Union manages to unilaterally regulate the global market.
“All the EU needs to do is to regulate [its internal] single market, and it is then the global companies that globalize those EU rules,” she told me during a pre-coronavirus trip to Brussels in early March. The most obvious example of this phenomenon, she said, is the EU’s General Data Protection Regulation.
Global influence: As international awareness of the EU’s regulatory power has grown, there’s been “a massive increase in the presence of foreign companies in Brussels” and their efforts to lobby institutions, said Bradford. “Because when you think about it, if you manage to influence the regulatory process in the EU, you can influence the regulations across the world.”
Despite the increased international lobbying effort, “we don’t see that lobbying [has] led to weak regulations,” according to Bradford. She contrasts this with the U.S. where corporate influence often undermines U.S. regulations. She chalks up this difference to the comparatively stronger influence of civil society in the legislative and rule-making process in the EU.
Bradford said this leads to “a more balanced outcome in the end, but certainly there is an awareness and attempt on behalf of the corporations to influence the outcomes.”
Civil society strength: Alberto Alemanno, founder of civil society NGO The Good Lobby, offers a slightly different view. He says that corporate influence in the EU, as well as the U.S., “is on average more successful in bureaucratic arenas” compared to NGOs and citizen groups. But, he added, “the different role EU civil society plays in shaping policymaking may have more to do with institutional features (EU technocratic apparatus’ incentives to engage with civil society, European Parliament’s increased power, lesser role of money in politics) than with NGOs’ inherent strength.”
And what about the coronavirus? Of course, Bradford’s “Brussels effect” will be tested by the pandemic. She believes that “unless globalization comes to a drastic halt (which it likely will not), the Brussels Effect will continue,” she wrote to me more recently via email.
But she is monitoring a few developments. This includes whether the crisis leads to more or less regulation, depending on whether there is an appetite for more or less EU after things settle down.
She also believes the technocratic nature of EU rule-making “insulates it to some degree from the crises.” But the uncertainty and disruption “will likely slow down the regulatory process in the immediate future.” This includes the EU’s new digital strategy, where the crisis may force officials to rethink its regulation of data and technology more broadly.