Proud moments when we persuaded her to do that. So im honored to kick off what i know will be a fascinating discussion about the influence oof the influence ofeurope on tl marketplace. Last year the wall street journal called the decline of europe a force in World Affairs the most consequential shift of the last 100 years and there is some truth in that since world war ii military influence of europe is certainly declined, and its also true the Economic Growth has been compared favorably with that of the United States or for example with china or india. And of course efforts to maintain an Economic Union have been more complicated greatly as we all know. But still, i think professor bradford sees things a little differently and in her book the brussels effect of the European Union rules the world which is here and also back there and you must have a copy, professor bradford argues that it remains a critically important economic superpower and makes the case very persuasively that continues to yield unilateral power in regulating their market and then theres a phenomenon called the brussels effect. So what does it mean . Many examples. The policies and areas with data privacy, Consumer Health and safety, Environmental Protection, trust in online hate speech. You read about this every day of the newspapers. What is remarkable is it exerts its influence without coercing anyone to do anything. Its just if you want to so in the European Union, you have to comply. So the book explores this complex topic and the research has received welldeserved and significant praise. Foreign affairs noted recently that the effect, and i quote, maybe the single most important book on the global influence to appear in a decade to read into the Financial Times called this book, quote, the definitive reference guide for those wishing to understand the effect. So, we have a treat ahead of us before we begin just a few words about the organizers of tonights event the interdisciplinary hub of Columbia Business School institute supports research on Global Business, provocative forums like this one instance a student from a host of Global Travel programs including study tours and classes during winter and spring break. Im proud to say next month the institute will send its 10,000 students overseas. That is quite an accomplishment. The other sponsor is the poor Richmond Center for business law and Public Policy at columbia university. Its a joint venture of the business and law schools. The Richmond Centers goal is to Foster Collaboration among the universities distinguished business and legal scholars in order to generate curriculum, advanced research to have the potential to inform Public Policies as well as the practice of business and law. Again, just like the brussels effect. Now without further ado to explain the brussels effect and its many implications, i am pleased to welcome anu bradford the professor of law at the International Organization columbiofcolumbia law school who a senior scholar at Columbia Business School and to help lead the conversation we are privileged to have the economics editor for Bloomberg Business week. We will talk for about 45 minutes and then have 15 minutes aof the end for qanda. Also she will be signing copies of the book which is for sale in the back of the room. Thank you all. [applause] thank you everybody for being here. How many people are connected with a Business School . How many people with a law school . How many people thought this was about brussels belgium or their home country . [laughter] okay, great. Im not going to monopolize the conversation for 45 minutes. I know there are a lot of smart people here that will have commented questions i might not have thought of so i will open it up much sooner but then come back in with some others. [inaudible] youre not going to be completely surprised when i ask you some of these questions, but i want to read just from the introductions of a sentence that grabs me because i admit probably like a lot of you that i shared the concern isnt europe kind of fading and not that important . Examples of the regulatory influence of across the Global Markets can determine how timber is harvested in indonesia and how honey is produced in brazil but pesticides used in cameroon and installed in very factories in china that chemicals are incorporated in japan as well as how much privacy is afforded in latin america and you could have gone on and actually, you do. The center chapters of the book are explaining the effect in great detail. Then it goes on chapters eight and nine are the kind of policy discussions like is the brussels effect good or bad and then whats going to happen next. I have a feeling a lot of these questions and remarks will be about those truckers but we agreed we want to spend some time talking about the central core of the book which is where does it come from and why does it exist. Okay, so you write on page 54 that it causes hosts to serve fish and a dinner party. Please explain. [laughter] so, if you are having a dinner party and inviting a guest one doesnt eat meat and then another one likes meat that is glutenfree so then you wonder whether you are going to tailor your dinner for everybo everybody. Instead what you decide if i may just give meat and serve the same food for everybody. So in many ways we tend to gravitate towards standards to everybodys preferences into them forgo the house. Cocounsel of every guest come into the house. So that is the concept of not divisibility. Can you elaborate on what that means . It explains why a company would have to be expansion across the global operation. We understand if you are a Global Business and you want to trade into the European Market but then its the question if you follow the same rule across the other markets as well and often scaled economies lead you to conclude i do standardize because that accommodates all the markets and i can produce one product and Service Across all the markets they operate. And there are different kind of legal, technical. I teach antitrust law so the eu and america and other regulators around the world have a say on where the transaction could proceed. If they say theres nothing wrong with allowing them to emerge but the eu says no, we do not let that transaction go forward, but tran that trans trn would rise. It prevails in the case of conflict. You cannot have this in one jurisdiction but not in another. So that is an example of legal market disabilities. So, technical non divisibility explains why we have a vote of ththe aboveof the technical coms follow a single Privacy Policy. So, facebook, google, microsoft, they had a global Privacy Policy and it echoes the european policy because technically it is cumbersome to divide. You can use the location that often it is too difficult. Or if you think about for instance another example that was a very different one. If you are somewhere now say in brazil and you want to serve the European Market, you need to make sure you do not have gm knows and there is the fear if you have a Market Opportunity in the u. S. That there is cross pollinatiotherescrosspollinats technically sometimes difficult to separate the cultivation, distribution without crosscontamination to technically sometimes the product becomes non divisible. Then i thought that the biggest category, the economic non divisibility. And that often is manifested for the scale economy. But if you go through the trouble and remove certain chemicals from the product in order to be saved from the European Market that they would then insert the chemical back into some of the products or the other markets. So the cosmetic manufacturer an American Company has made all of its cosmetics consistent with european chemical regulations. And it has not been introducing those with respect to products in the u. S. Market. So it can be scaled economies and benefits related to the global super instance a Business Model like facebook, they want to pride themselves on having one facebook and having a single global conversation. So, if they follow different paid speech in america and europe, it would be difficult having a conversation because the speech would be difficult to some part of the people participating in the conversation. Going back to the legal examples, some people would argue that its going to far, these are two American Companies going back to 2001 and shouldnt they be allowed to merge it seems like an extraterritoriality. Would you say it is or isnt the merger affects the European Market. It affects the consumers and if you think about what will be the alternatives that they could be anyplace outside of europe and go out to escape the merger review it is difficult to think you could opt into some jurisdiction that doesnt care about the merger is. There is a criticism that but t happens as it does raise the standard up and there is a legitimate concern that whether we actually always have the optimal Government Marketplace if the eu gets it wrong. One of the most fascinating aspects is that it represents a race to the top. When people think about regulation, they worry that a race to the bottom as people gravitate to the place where there itheres the least regulao is there a race to the bottom or race to the top or is there a little bit of boats in the world . There are lots of scholars and public discord associated in the idea that International Trade and globalization inevitably leads to the lowering of the standard so the idea that the country is once again the competitive advantage and lose the ability of companies to compete by lowering the Environmental Standards and the burden of the companies, and the safety regulations. But the empirical scholarship doesnt show this to be true so they are not locating and trying to engage in practices that would be consistent on this hypothesis. But it really lays out a distant russia now that leads the companies voluntarily to ratchet up the standard so what we dont even need to see if the race difficult in the sense even though the heavens in some areas as well but th the standards get replicated and we see the kind of race to the top. But we see this de facto race to the top where they produce to the standard even if they were not required to do so by the u. S. Law. I have a lot more questions but i want to get the audience early on. So, if you have i dont know what is the deal with the microphone. Okay we will bring a microphone. Anybody have a question now backokayi see one right here. State your name, please. I appreciate you sharing a bath with regards to how it affects companies and to develop world. What does this mean for the economies in the market and how does that shape the race to the top as you put it . It is how it is impacting them as a descriptive matter and instead what we see is that Companies Operating to the extent they are expert oriented and adjusting their practices so they are adopting the eq sometimes reluctantly, but the only way to continue to trade in europe. And actually would be better off. This is the example that you mention and then also in many other markets as well so it shows the quality. So in many ways also with government they do not have the capacity. To enact the privacy regulations to keep american citizen safe. So that would alter the price in africa. And then to embrace that criticism on the industry. , very happy colleague of anu bradford before you published the brussels effect published another book with another focus on which they focused on the hegemony of the International Standards correlation and i wonder if part of the brussels affect in the International Standards organization . Yes. And then to liberate those 27 votes and then to regulate. And then with an interesting interaction and with those International Standards so advancing of the International Organization. And with that experience to infecting and influencing from that organization from that to a street what i come across from the International Standardsetting to allow yourself to be influenced by those standards. There was an example in the book with the scheme running the airlines can you run to that story. So we all know that is one of the priorities for the eu and multilateral corporations are tackling Climate Change so the eu has decided to some extent and this is the story i engage through aviation so that if you are American Airlines going from new york to london or paris basically you have to buy it for the duration of the entire flight even only one part of it takes place in new york and if you fly back to the United States call from the european airport. But also Foreign Airlines with that backlash. Since then they collected power to lobby against the presence of the eu. So they would have lost massive sales if you have a collective response from the Business Community that pushes back. And say that not Going Forward but then with the brussels affect what it managed to do is have International Negotiations setting those standards. With aviation industry. And then with that knowledge the eu would be doing something and then the other actors are prepared to come to the table. It is the interesting effect. Can you identify yourself . Yes talk how eu developed a strong power as a judgment maker and what percentage was the buying power of food purchase what percentage would that be and lastly on two categories with the us relationship with the eu and the issue of the production of the stock market . So how does that with the capacity . It doesnt mean only the eu could exercise such power. But the single jurisdiction with the global standards. So we could see that affect one thing we dont fully appreciate that through the 19 nineties the United States set the global standard it would emanate from here. But then they traded places and then to explain for the European Union. Why 1990 . Because the eu did not always step in. If you want to regulate the environment but you also remove those barriers to harmonize those standards so to get that environmental regulation so you get the left and the right on the regulations because they will support for integration. s even the brits are skeptical love regulation. They love the Single Market and free trade on the common market. So in many ways its easier to build a consensus there are others i discussed in the book with the Political Climate in the eu with that support with the environmental regulation with the Data Protection so how big with that have to be . So the foundation that if you are in coaster rica and you want to set the global standard and there is no magic number that i can say but you could set the standard but what the eu has going for it there are more consumers in china it will be a long time behind the eu with the buying power for the consumers and to see the more affluent that are in the eu. So if you think of the agriculture is not a major market and then to steer them away as long as they have a long supply chain to make sure everybody in the chain is comfortable trading in the eu. I am in International Security program so its a little bit out of left field one left field also teach European Security talking about the brussels affect because some of the questions asked. So both are areas so i wonder one is a little bit closer from another. And those to violate those regulations as a way of coercion so does this hurt the eu recently and it tries to come back so the one question that arises from that and there is the brussels affect and then to see more inefficiencies there are more helicopters being sold than those to design them everything is an efficient. Because we dont like to spend money on defense. It is still much worse than you would predict. And there is some effort to move in that direction. So to identify talk about the Financial Markets to talk about National Security that is when they are primarily in charge. But its not with the level of political integration that we would be able to complete. So thats why i think it is a very uncomfortable place and to give massive reforms they still see the gap for they can acquire and what politics can deliver ultimately they will get there but the other one with the financial sanctions that the eu will not have that kind of power the un had. So the brussels affect does claim these issues which means and these other areas to have Political Capital that it is another interesting issue. So there is no Common European Army and you are absolutely right. To make those investments so that definition of power that the eu would never win the game but right now with less certainty so there is that conversation the eu needs to do something about this. Usually they have been quite reluctant but focusing rather on nato with the membership we already have more investment with the European Defense fund which im sure the eu is testing those waters. I will step in with a question i expected to have been risen by now but there is one writer when you talk about the power of brussels Boris Johnson the journalist making up stories about crazy eu regulations and now the Prime Minister is trying to pull the country out of the eu so whether they succeed giving britain assistance. This is something i take on in the book. That it was in the midst of this development but the point that i make in the book that there is no such thing waiting on the other side of brexit that is called regulatory freedom. It will not liberate the uk or the companies and why is that . 35 percent of the uk trade has access to the eu market that will not change after brexit. If you look at the major industries, even the number one destination for automobiles were pharmaceuticals or financial services, these Companies Need access to the eu markets and they need to abide by the eu rules so they want to have a separate production line for the uk car market that is six times more than the eu car market and that is consistent with the eu regulations. Thats why its one of those promises of the Brexit Campaign to say that it would no longer push towards regulation. They have said as much and have asked if they could use those regulations because they need the market and the uk government even the commissioner said using brexit with data privacy its very hard to chart your own path it goes against the fundamental logic. I work at the new york fed and im a columbia grad i am interested in innovation and how you think about regulations takes a long time it is slow and the response with the innovative economy some of the choices for example the Telecom Space where europe had a standard in the us didnt and allow innovation and they cant get in the way of that. If you look at Mark Zuckerberg going to brussels with the other regulation on ai and tech companies. So it is unclear what the regulation if it is always against innovation. It should give some pause the was behind the Big Tech Companies so it definitely has work to be done but if you look if regulation is hindering that is not clear. To say we do not want to be unregulated we need to have that reputation that builds on us Companies Like microsoft have made privacy as part of their Business Strategy and a terrific book by nyu professor on how america gave up on free markets and it shows a lot of research how European Markets are actually more competitive than american markets because they have become so concentrated it has antitrust regulation the us market also with consumer pricing. And if you think of many examples with Energy Efficiency holding the company to Higher Standards that doesnt mean they dont innovate. It actually allows them. I would follow up on that specifically the precautionary principle the eu uses to decide if something is safe is different from the costbenefit analysis used by american regulators that would say it isnt wellfounded because it doesnt have any safe levels. Can you talk about the pros and cons . The philosophical distinction in terms as a society how much space with the regulators ability and in europe there is much more fear the regulators dont get it when they should where there has been much more of a presumption through the government. So it gives the regulators the right to go ahead so you are not absolutely certain if there is harm the europeans will ban it and that gives the rise to these notions in the us has crossed the line actually being in charge of the Digital Economy when those precautionary principles comes to Artificial Intelligence even though there are opportunities with this technology we are hampering innovation but also there are unintended consequences we know exactly how these technologies affect individuals even though they have been banned temporarily. I am a journalist. I would like to bring up the brussels affect everyone is familiar with is the insincere consent notice to terms that when you agree in many cases they are violating the gdpr because you are being one consenting to being tracked after all. Gdpr was a monumental shift globally and for privacy what Us Government or companies but then came cambridge analytic. Politics moved to give them much more credibility to say we do need to take care of our privacy for these corporations and what is the cost when your privacy is compromised. It still remains to be seen there are certain concerns when it comes to the disturbed one distributional impact for those Big Companies to comply, it is much harder for regulators to do so. That is certainly not with the eu intended but if we want to level the Playing Field to make sure the local startups are rethinking on those differential impacts. So when it comes to the evolution very few words say the eu doesnt get it right or for the right reasons to still make sure we dont have expected regulation are unintended consequences we are willing to admit that is likely and the eu is setting the Gold Standard to rethink the value to reshape that conversation with 100 countries around the world that have emulated the gdpr. Facebook and the others calling the us federal government to have some type of regulation. Clearly there is political support. Mentioning the precautionary standard that the fda is always extremely conservative for pharmaceuticals to get off the market. And my wrong on that . The one criteria and certainly in many examples litigation that they are not the most stringent in areas like gambling. And then with the Dairy Products so it isnt the claim that it prevails it is the most stringent because it is not doing so but with that propensity to regulate. So for either side. But then it was the most stringent to get the approval but what they did not do was elevate those standards and then thats when it comes to this political drug. So looking at how big of the market that takes place and then with that cool standard. I have some questions i was saving toward the end. With chapter nine of what comes next. So this ties back but with really interesting observations how the eu could continue to have a lot of influence even with those internal battles. With the regulatory juggernaut. Its hard for what the critics a look like but it is to offer one way where it is going so the point that i make that Regulatory Power will prolong that economic mindset with the ability to grow so if you think the obvious question like china is rising. No matter what statistics you look at the market will decline. Look at the market will decline. And also chinas growth relies on exports that are setting the standards like the eu so i think it will be a while before that happens. China also doesnt have the kind of regulatory architecture the legal institutions that allow it to convert its regulatory into actual influence and to the extent it is importing a lot of the principles regulations to some extent on the data as well and environmental law so one day if there is a beijing effect it is exporting the regulations from the eu in the first place so thats one argument i do not deny the importance of the growth and that china will have that theres more of a runway to focus on gdp growth. I also talk about the role of technology because if you think of the concept that we started from the own divisibility the company could decide that the de production and produce more it would allow them to restrict the impact and we have some technologies like three d. Printing that make it possible potentially in the future to localize the production and you wouldnt need to rely as much on the uniform production because there is no need to standardize. The technologies failed and its hard to predict how quickly they would be deployed at this scale for so those are some of the examples of why i think we will see the brussels effect continue for a long time. Theres a lot of conversations internally so they may be a threat that comes from within the eu and the powers they are willing to delegate and how they regulate. If you think about the core of the antieu sentiment in poland and hungary they were not worried about Environmental Protection or going after the technology sectors. They are worried about migration control over the judiciary and free press and these are not the core of the Single Market so there could be a Ripple Effect if you start having the country goes against brussels but this isnt a battle that they were taking on. We are going to take a few more questions. You in the back row. Following the question on innovation what do you think is the effect on five g. And mobile technologies and second as the markets grow do you think that is going to influence the content and whats regards on the more contentious topics . The most contentious topic and the big debate is who will build a network and how should they approach a and i dont think there is one way for the government to think about it and there is a broad concern how for instance china is investigating the development of ai. Thats what im watching. We see moving to that. Its the reason partially so we will see how they will move into this space but they are aware of the potential ability to shape the technology through the regulation. Partially i think an interesting question is they share some interest with the United States and thats an area that is entrenched in both markets on how we regulate it and it could be an opportunity to set the standards jointly. My name is ellie and i am a journalist. My question is about brexit because i was born in the uk. This might be obvious but what you say that the eu makes up 45 of the uk market so what was the point of brexit . That is a good question and its one of those i regret how much is information and false promises we give people. When you announce a referendum on something that is so complicated, its very risky to hand it over to people and even though you could make the theater a basic argument of the access to the market it isnt hard to understand you need to abide by the standards and continue to do that after but somehow that didnt translate. Theres still this idea that theres a Better Future waiting on the other side. But brexit isnt easier to develop as a slogan and viable policy and i think that is what the uk is going to learn the hard way. [inaudible] the departure is difficult to unfold. The uk has a oneyear extension set by Boris Johnson who said we dont want extensions. It will not go beyond that. Always managed to do thus far is for the uk to leave. The relationship is to look for negotiations are now we have a year to reach the trade agreement that shapes the future Economic Partnership between the uk and the eu and it took about seven years to negotiate a trade agreement with canada which should be the easiest thing to do in the world and now we try to backtrack and get it done in a year and there is a deadline and we need to get it done otherwise it will be very ugly so it needs to take priority. If you think part of the vision for global burden negotiating with the u. S. And various other trade partners they need to get it done by the end of the year and i would like to say good luck because i think it is difficult and my prediction is we end up with something rather basic which means we need to continue to build on that, so its far from over. In many ways it is just the beginning trying to understand the implications in how we comee up with the kind of role that will determine partnership Going Forward. One or two more questions. And there is one right here. Hello, good evening. Im from the portugal. On the china versus the eu topic where you were mentioning is still influencing force versus china is one part i dont think id agree which is the energy and renewable energies. Gareth has a very positive impact that china has been a driving force to reduce the cost of renewables especially Wind Turbines and now more recently with solar panels. What is the take away from that . They havent been able to leave at revolution. The eu would welcome that. It serves the same goal. They are not going to fight the goal of cyber data fo date for g the Climate Change on its own so this is going to be one of the most welcomed chinese policy professions that allow the eu and china to see eye to eye. So there is a question of competitiveness and maybe it is the Chinese Companies get a bigger market share when it comes to these companies but when you think about the driving factor and motivator that is something i think they will be celebrating. Any last questions okay we will stay on right here. Privacy and Digital Identity activist. We have colleagues at the university of southampton that did it paper called for internet anintranets and its about the european internet which is prematurely around sort of social and humanistic norms and the american internet which is commercial, the chinese which was top down and indian switch who knows how it was going to go, that was still a question tn that was open. My question to you looking at that paper and many of the things that have happened if seems to me the eu has a moment in time. Its like if it could get over r an inferiority complex that it has it could take the lead and create a way to go forward with the things we want for this technology and all the things to work for the global society. I wonder if you think the eu has that kind of guts. Im going to work on that. Next week im going to brussels and i will be meeting with a lot of people trying to convince them of the power they have. I explai explained how this emad from the internal goal to build the market. You see a shift in the communications over the last ten years where it understands it has the opportunity to shift the landscape if you think about issues like data privacy and the idea something could still be Information Online that would require the platforms. The eu has been playing with the idea that it can expand that. They have a firm belief that its required to balance the kind of imposition that is advanced by the chinese. Okay. Well, i want to thank the audience and professor anu bradford. [applause] strengths and weaknesses of president trumps Foreign Policy and the role of conservative nationalism. Welcome to the carnegie endowment