Thread by @WholePicture_

#Thread #Europe #trade #BrusselEffect :
With its huge market and an active commission, the EU can define and enforce standards. One economist calls this the “Brussels Effect”.

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Roughly simplified, it is about the global attractiveness and thus the power of the EU internal market with 450 million inhabitants. For example, if the EU sets rules on data protection, then US companies such as Facebook and Google must also adhere to them.

And because these corporations rarely feel like complying with specific data protection rules in every country in the world, they simply apply the strictest standards throughout the company and everywhere.

. And these are often the requirements of the EU, also in data protection. Bradford coined the expression "Brussels effect" for this.

The Brussels effect: five factors must be met for this effect to occur:

Big market: That applies to the EU. Along with China and the USA, it is one of the three largest economies in the world.

Regulatory capacity: There needs to be enough highly qualified civil servants who have the necessary skills and who use them.

Strict standards: The corporations tend to adopt the most demanding requirements in order to cover the other standards at the same time.

Not “elastic” target objects: This means, for example, the consumer goods market. If the EU enacts strict regulations for consumer goods, residents will not leave the EU because of this.

However, if Brussels regulated “capital” more strictly, it would move to another jurisdiction.

Non-divisibility of offers: If it is technically feasible and it is worthwhile for companies to adapt offers for different markets, the effect of EU rules remains limited to the EU.

A prominent example is antitrust law. In the past few years, the EU Commission has fined US companies such as Google and Apple billions in fines. In addition, in 2001 Brussels blocked the $ 42 billion takeover of the US company Honeywell by the American company General Electric.

When it comes to food safety, Citrosuco is a good example. The Brazilian company is one of the largest manufacturers of orange juice and has had its factories certified according to European regulations.

This means that beverages not exported to the EU are also produced in accordance with EU rules.

The effect can also be observed in animal welfare. In 1993 the EU issued a regulation according to which all animals must be stunned before slaughter.

As a result, slaughterhouses in Brazil, Thailand, Namibia, Canada and many other countries adapted their practices to EU regulations.

However, as mentioned, the effect has limits in the case of mobile target objects such as capital. This is another reason why the EU is struggling to make the euro the most widely used currency in the world.

And: If regulation in the EU is so costly for companies that it no longer outweighs the benefits of market access, companies no longer offer their products in the EU.

Thread by @WholePicture_: #Thread #Europe #trade #BrusselEffect : With its huge market and an active commission, the EU can define and enforce standards. One economist calls this the “Brussels Effect”. nzz.ch/pro-g...… threadreaderapp.com/thread/1377220…