Global marketplace. Last year, the wall street journal called the decline of europe as the force in World Affairs the most consequential shift of the last hundred years and there is some truth in that since world war ii declined and its also true that the Economic Growth has been compared favorably with that of the United States and for example with china or india. And of course efforts to maintain an Economic Union within europe have been more complicated lately with brexit as we all know but still i think professor anu bradford sees things differently and in her new book, the brussels effect the European Union rules the world come here and also back there and you must have a copy, professor bradford argues the eu is an economic superpower and it continues to yield unilateral power and regulating their market and that is a phenomenon called the brussels effect. So what does it mean, many examples to shape policies and areas data privacy, Consumer Health and safety, antitrust and you read about this every day in the newspapers. Whats remarkable is the eu exert this influence without coercing anyone to do anything. Its just if they want to sell in the European Union, you have to comply. The book explores this complex topic and research has deceived significant praise. Foreign affairs noted recently that the effect, and i quote, maybe the single most important book on the influence to appear in a decade and the Financial Times called this book, the definitive reference guide for those wishing to understand the brussels effect. So, we have a treat ahead of us before we begin just a few words about the organizers of tonight event. The institute for Global Business is the interdisciplinary hub of Columbia Business School and the institute supports research on Global Business, sponsors provocative forums like this one, and since the Business School students on 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 spend 10,000 send 10,000 student overseas. The richmond Paulson Center for policy at Columbia University is a joint venture of columbias business and law school. The goal of the center is to Foster Collaboration among the Columbia University distinguished business and legal scholars to generate curricular invasions and advanced research that has the potential to inform the Public Policy as well as the practice of business and law just like the effect. So now without further ado to explain the brussels effect and its many implications, i am very pleased to welcome anu bradford the professor of law and International OrganizationColumbia Law School who is also a senior scholar at Columbia Business School and to help lead the conversation, we are privileged to have peter coy the economics director for Bloomberg Business week. They will talk for about 45 minutes and then have 15 minutes at the end for qanda. Also she will be signing copies of the book for sale in the back of the room. Thank you all. [applause] thanks, everybody for being here. Can i get a sens the sense of tm how many people in the Business School and how many people went to law school . How many people thought this was about their own country, so enjoy. [laughter] great. This is a great book. Hope you all read it. [inaudible] know there are people here with questions and comments i may not have though thought up so i of n it up much sooner than [inaudible] youre not going to be completely surprised when i asked some of these questions, but i want to read from the introduction is in this that grabs because like a lot of you a shared concern isnt europe kind of fading or not that important . To determine how t timbers harvested in indonesia and how honey is produced in brazil, bt this decides Cocoa Farmers using cameroon and Equipment Installed in dairy factories in china. It and you could have gone on. Its actually explaining the brussels effect in great detail than the book goes on chapters eight and nine are the kind of policy discussions so is the brussels effect good or bad and then what is going to happen. So eight is the good or bad. There are questions that might as well give up both chapters of the agreed that we want to spend some time talking about the central core of the book where does it come from, why does it exist. So, you write on page 5 54 of te brussels effect is the same effect that causes foods to serve fish at a dinner party. Please explain. [laughter] [inaudible] so then you wonder whether you actually instead what you decide if i may jus just get meat and e the same food for everybody. So in many ways, we tend to eradicate the words the standard to incorporate everybodys preference and forgo the hassle of catering to the individualized needs of every guest coming to the house. House. So that is the concept of not divisibility. Can you elaborate on what that means . You understand that if you are a Global Business and you want to trade into the European Market you need control of the european rules. But then you face the question of whether you follow the same across the markets were run to separate production lines and often scaled the economies and other benefits of the production to conclude i ago standardized because that accommodates the markets and they can produce one product and Service Across all the markets at which they operate. There are different kinds of non divisibility, ther theres legal, technical, economic. What we said from the legal. The eu and america and other regulators around the world had a say on whether certain transactions can proceed. If the u. S. Says that there is nothing wrong to allow them they say we do not let the transaction go forward that instead will turn wide. Its the most regulator that prevails. You cannot have it be in effect in one jurisdiction but note in another. So that is an example of the non disability. Technical explains why we have these Companies Follow a single Privacy Policy. , facebook, google, microsoft they have a global Privacy Policy its cumbersome to divide the search if you think there are different ones from the era of safety so the eu doe they euk like this and if you are the former something now in brazil and they want to serve the European Market, you need to make sure that you dont have gm owes in your product and there is the fear that even if you had a Market Opportunity in the u. S. But there is cross pollination so is to segregate the harvesting and the stories without crosscontamination so technically sometimes the products are non divisible. And then i talk about what i see as the biggest category. That often is manifested through the scale economy. It doesnt make sense if you go through and remove certain chemicals from the products in order to be picked for the European Market. You can insert a chemical into some of the products or markets. So the cosmetics manufacturer has made all of its cosmetics consistent and it has not been introducing those chemicals with respect to the products destined for the u. S. Market. So its those related to the global brand. So for instance the Business Model facebook they want to pride themselves of having one facebook in a single global conversation. So, if they follow different hate speech in america and in europe, there would be a difficult conversation between an american and european because it wouldnt be visible in some part going back to the divisible, they would argue its going too far, these are American Companies that goes back to 2001. Shouldnt they be allowed to merge it seems like an example of territoriality. Would you say that it is or it isnt . If you think about what would be the alternative to the companies could just lift themselves anyplace outside of europe and they love to escape the merger review, it is difficult to think of an area like this where you could have the jurisdiction that doesnt care about the tax mergers. I think that there is a criticism bu that what happens s that it does bring the standard event is a legitimate concern that whether we have the optimal standards in the marketplace the eu gets it wrong. One of the most fascinating aspects is that it represents a race to the top when people think about the regulation they worry about the race to the bottom and the people gravitate towards the place where theres the least regulation. Or is there a little bit of both in the world . Theres a lot associated with the idea that International Trade and globalization inevitably leads to the lowering of the standard. They want to gain competitive advantage and by lowering the Environmental Standards and burdens of the companies but the empirical scholarship doesnt show this one to be true so that companies are not trying to relocate or engage in practices that would be consistent with us. But it really lays out a business rationale to ratchet up the standards. So the race to the top to the standards even though that happens in some areas as well. We see this de facto race to the top where the American Companies start producing even in america to the standards if they were not required to do so by the u. S. Law. Iwhat is the deal with the microphone . Does anybody have a question n now. I appreciate you sharing a lot with how it affects the companies in the developed world. What does this mean for the entities and how is it shaping the race to the top . Is how it is impacting them in a descriptive manner to the extent they are exporting to the European Market they are adjusting their practice practio they are adopting reluctantly but its the only way to continue to trade in europe. The other question is whether it is actually good or bad for the development of the country and they are i talk a little bit about this in the book and i think that it can go both ways. They can see a criticism that what they were forcing them to do is not good for africa and they wouldv would need to feedr population but there is Research Showing that effectively allows them to develop a product and tap into the higher levels of the market and actually be better off financially in the end. Now they have a stamp of approval created and added many other markets as well because they have shown that the quali quality. So in many ways it can also surf the companies and some governments for instance the resource constraints. They do not have the capacity to stop mergers may be harming them. They do not have the capacity to enact the kind of privacy or chemical regulations that keep the consumers and citizens safe. So some of them are on the effort of the european regulators to stop the global cartels. I think there is no single answer that would lead the government to embrace or criticize the effect but it depends on an industry and only after. Theres a question right here in the second row. Before this effect, a couple of scholars published another book with a kind of similar overtone comes a new global rulers in which they focused on the hegemony of the International Standards organization. And i wondered if it is a part of the apostles the fact that they have 27 votes in the International Standards organization and others only have one. There is some criticism of the strategic ability to leverage the 27 votes when it needs to get something done. But at the same time i think it has an interesting interaction because if you look at their own standards they cant be modeled after International Standards which they then take on to the regulations advancing the regulatory organizations. At the same time giving those 27 votes and the experience is quite effective in influencing the standard to emerge from those organizations. What ive comive come across ih the International Standard settinis the International Stand setting and allowing itself to be influenced by those standards that emanate from those institutions. There was an example in the book of overreaching the trading and airlines. Can you walk through the story and talk about why that cannot differently . That was a fascinating story. We all know Climate Change is one of the priority is for the eu. We also know that multilateral corporations in tackling Climate Change have been limited so theyve decided to try to move ahead on its own but this is where this is the story i engage in the book when they try to extend its emissions trading scheme to aviation it would have been if you are American Airlines flying from new york to london or from new york to paris he would need to buy service for the duration of the entire flight and flying back to the United States if your plane takes off from a european airport. This is extraterritorial emetic causes a backlash by the Foreign Government but also Foreign Airlines who then use their collective power to lobby against it and threaten the eu. So they would have lost deeds purchases but if you have collected response from the Business Community that would push it back. So they needed to back off and say that it is not Going Forward with the aviation when it applies to these but its also a more nuanced story for the brussels effect because that they manage to do is catalyze International Negotiations and join setting standards when it comes to emissions trading in the aviation industry. Because they have the Bargaining Power that they would be doing something unilaterally to the other actors would come to the table and set the standards so i think i that it is an interestig effect also this kind of contingent way of the corporation. Okay. You have a question. Please identify yourself. Could you talk a little bit about how the eu developed their strong power for such a judgment maker and what percentage of buying power and lastly to two categories and then the issue of the development of the stage production of the stock market you talked about the effect on those two areas. Looking about from the beginning, how did they do with the regulatory capacit capacitye theory of this even though it is called the brussels effect it doesnt mean only the eu can exercise such powers, so its a road map that explains how a single jurisdiction can unilaterally set the standards. We could see this effect it was the United States that set the global standard. They emanated from here. We were the environmental leaders. But then they traded places and this is something weve explained how the u. S. Move towards the regulation and basically set the stage for the European Union. They not only stepped in, but it was also the moment when they were very deliberately building the Single Market so the eu always had the goal that made it much easier to get the regulations through the political process. If you want to regulate the environment you want to deliver the environmental benefit but you also remove the barriers from trading across the Common Market and then you get the pro market party like trade the eu see that the left and the right around the regulation. In many ways it was easier to build coalitions and a consensus and there are additional reasons i discuss in the book. We have the support for instance in the left and the right and the same with antitrust but then you talk a little bit for instance how big of a buyer with would they need to be a there is no magic number you will be able to set the standard the gdp and china is going to be a long time but i did it g behind the eu sog power is still hard. The u. S. Is even more affluent. There are more people in the eu so there is no magic number for instance the eu is not a major market yet we have seen the risk aversion partially to steer them away from the gm knows as long as theres a long supplychain and you want to make sure that everybody in the chain is comfortable with not trading in the eu and that is so hard to find. Im going to go back here. Microphone. Im Cynthia Roberts and they teach in the program here at columbia so my question is a little bit out of left field but i couldnt resist coming i teach also European Security this semester and couldnt resist coming to the talk on the brussels effect and how the eu rules the world in part because of some of the questions asked at the beginning that there are two other domains that i want to raise and get your feedback. I wonder if theres any cross domain affect us we could learn from