Is the Brussels Effect Beneficial?

Chapter 8 discusses whether the Brussels Effect is beneficial in terms of advancing people’s welfare, both in the EU and abroad. In examining this question, the chapter engages with economic and political criticism leveled against the Brussels Effect. It asks if the global reach of EU regulations is costly and capable of hindering innovation, or driven by protectionist motives. It also queries if the Brussels Effect should be viewed as a manifestation of regulatory imperialism, undercutting the power of foreign sovereigns to make critical decisions regarding their economies and serve their citizens in accordance with their democratically established preferences.

Digital Economy

Chapter 5 focuses on two areas of regulation that have been central to the EU’s efforts to regulate the digital economy: data protection and the regulation of hate speech online. The chapter first reviews the EU legislation governing data protection and explains the economic and political drivers behind it. It then discusses some examples of both the de facto and de jure Brussels Effect on data protection. Then, the focus turns to online hate speech, again reviewing the regulation, the underlying economic and political motivations, as well as examples of how the EU has drawn the line between acceptable and unacceptable speech in the internet era—not just in Europe but around the world.

Market Competition

Chapter 4 discusses competition law, which offers one of the most prominent examples of the EU’s global regulatory hegemony. This chapter first introduces the key aspects of EU competition law. It then explains why the EU has chosen to build an extensive regulatory capacity in this area, illustrating how competition law forms a critical dimension of the EU’s broader, single market program. Following that, it offers examples of the de facto and de jure Brussels Effects pertaining to competition regulation. These examples illustrate that the de jure Brussels Effect has been extensive. At the same time, the occurrence of the de facto Brussels Effect often turns to the question of non-divisibility, at times enabling while at times limiting the global effect of EU competition rules.

The Brussels Effect in Context

Chapter 3 places the EU’s unilateral regulatory influence in the context of the EU’s broader external influence. The Brussels Effect is not the sole manifestation of the EU’s global regulatory power. Instead, the EU wields norm-setting power through a number of different channels such as trade agreements and participation in international institutions and transnational government networks. This chapter reviews these alternative channels of the EU’s regulatory influence in an attempt to provide context for the Brussels Effect within the broader set of tools that the EU has at its disposal. It then compares the relative advantages and disadvantages of those alternative methods when contrasted with the Brussels Effect, and discusses when these other channels of influence are likely to complement or, alternatively, substitute the Brussels Effect.

The Future of the Brussels Effect

Chapter 9 concludes this book by looking into the future. It addresses both external and internal challenges to EU’s regulatory hegemony and examines whether and how the Brussels Effect will persist, given these challenges. The impending departure of the United Kingdom from the EU may appear to weaken the EU’s regulatory power. The growing concerns over the future of multilateral institutions and international cooperation may also challenge the EU’s ability to shape the global regulatory environment. Additional challenges loom on the horizon. These include the rise of China and other emerging powers that will gradually erode the relative market power of the EU. Technological change may revolutionize industrial processes, allowing for greater customization and thereby reducing the need to produce to a single global (often European) standard. Finally, the EU’s internal political struggles may compromise its ability to engage in effective rule making as the anti-EU sentiment grows. This chapter will consider each of these challenges in turn, offering an account of not just the EU’s regulatory power but the persistence of that power.

Consumer Health and Safety

The first part of chapter 6 examines the Brussels Effect through the global impact of the EU’s food safety regulation, while the second part of the chapter examines the Brussels Effect through the lens of chemical safety. The discussion first introduces the EU’s key food safety regulations, and examines the underlying interest group dynamics that explain the emergence of such stringent regulations from the EU’s legislative process. It then offers some examples of both the de facto and de jure Brussels Effect on food safety. Next, the chapter turns to chemical safety, again reviewing the relevant regulation, together with the politics behind that regulation. It then illustrates the pervasiveness of the Brussels Effect—both de facto and de jure—demonstrating the EU’s entrenched regulatory influence across the global marketplace.

Environment

Chapter 7 describes a few notable policy areas where the EU has successfully influenced global environmental standards through the Brussels Effect. These include the regulation of hazardous substances and electronic waste, the protection of animal welfare, and the mitigation of climate change through an emissions trading system. The Chapter first examines the origins of the pro-environment attitudes in the EU, explaining how the strigent regulations emerged as a result. It then provides examples of both the de facto and de jure Brussels Effect pertaining to these regulatory policies. The discussion reveals how environmental law features some of the strongest examples of the Brussels Effect while also illustrating the limits of the phenomenon.

The Brussels Effect

Chapter 2 lays out the conditions under which a single jurisdiction exerts global regulatory authority and shows why the EU today is in a unique position to assume the role of a global regulatory hegemon. These conditions explain the emergence and prevalence of the Brussels Effect. A country’s market size is a well-understood proxy for its ability to exercise regulatory authority over foreign corporations and individuals. But market size alone does not guarantee global regulatory influence. The state must also have the regulatory capacity as well as the political will to generate stringent rules. Moreover, the Brussels Effect only occurs when the EU regulates inelastic targets, such as consumer markets as opposed to capital. Unlike capital, consumers are not able to flee to less regulated jurisdictions, compromising the EU’s regulatory clout. Finally, EU standards become global only when companies’ production or conduct is non-divisible—in other words, when a company’s benefits of adhering to a single standard exceed the benefits of taking advantage of laxer standards in other markets. These conditions, taken together, explain why the EU is the only regulatory regime that can wield unilateral regulatory influence across global markets today.

How the EU Became a Global Regulatory Power

Chapter 1 discusses the European Union’s (EU’s) emergence as a global regulatory power. It introduces key EU institutions and describes their role in the regulatory process. It then explains how regulation has become a key tool to advance European integration, giving these institutions a powerful motivation to pursue an ambitious regulatory agenda. It also argues how the creation of the single market was always the primary concern for the EU institutions. For a long time, the Brussels Effect was an ancillary and largely unintended by-product of a regulatory agenda that was driven by internal motivations. Only more recently, a conscious external agenda has emerged alongside this internal agenda.