Brussels: Officially the Centre of the Regulatory Universe, Say US Academics
Brussels may be constantly grey and therefore not an appealing holiday destination, but apparently its dark regulatory clouds cast a rather large shadow for global business. Living in our own hermetically sealed European Union (EU) bubble, the Brussels PA team have long overplayed our own importance. So its fitting that my first venture into blogging is to highlight the fact that Brussels is the place to be when it comes to legislation that has an impact on our clients' business the world over.
Thankfully, the evidence that we have not been confidently wrong for the past 15 years (we celebrated 15 years of our office in Brussels in 2006) comes from academics in the USA and relates to my own policy field of chemicals/environmental policy. Academics from the US' Brown and Boston Universities have come to the conclusion that the EU sets the green standards the world over. The authors make particular reference to legislation adopted by the European Union on waste electrical and electronic equipment and chemicals in general arguing that “the international market-based influence of WEEE, RoHS [a related piece of legislation on chemicals in this waste] and Reach reflects a broader change in global standard setting” and that “the centre of much global regulatory standard-setting is shifting from Washington, DC to Brussels”.
Clearly, EU legislation has by its very nature an impact on business conditions across Europe. In some policy areas, such as environment, up to 80% of national legislation in the field originates here in Brussels. National governments simply fill in the blanks, frequently goldplating what is already a heavy regulatory burden for business, and then take credit for the successes (such as vastly improved bathing water around the UK's coasts) or lay the disasters at the door of the EU (such as the UK's fridge mountain, which was largely due to the UK government inaction in implementing in a timely manner the relevant EU legislation). Looking to the global level, FH Brussels has examined the impact decisions made in Brussels can have on markets the world over. In a reversal of the old adage, when the US sneezes Europe catches a cold, for one trade association chemicals client shared by the Brussels and DC offices the impact is easy to see. The EU bans our clients products in toys and cosmetics and activist groups clamber for California to do the same.
Further evidence comes from a piece of work we conducted for a large industrial technology client. This has led us to establish a small but growing bank of case studies of how EU legislation has migrated across the world. These case studies show the effects of EU legislation on a wide range of countries and a wide range of sectors as countries simply adopt the EU text as their own. Israel adopted EU legislation in the field of wastewater treatment, while Russia took on the EU's legislation in electromagnetic devices. Further afield, Mexico transposed EU legislation relating to packaging waste and Brazil liked the look of the EU's Batteries Directive. Worryingly, third countries sometimes get the wrong end of the stick. The Thai government attempted to replicate the EU's ban on the plastic PVC before industry stepped in; a ban that does not exist. (Please feel free to drop me a line for the case studies)
It's not all one way of course. Last year I had the fortune to meet with a visiting White House official and he happily pointed out that the US has led the environmental charge in fields such as emissions of non-greenhouse gas pollutants from cars and had inspired the current EU cap and trade scheme for CO2. The biggest question of course in this interconnected world seems to be who is inspiring who. However, even our White House friend would accept that in an age of global supply chains and when Europe's 500 million consumers are a powerful market, companies as well as countries have to pay heed to what happens on Brussels' damp and grey streets.
See a 5 day weather forecast for Brussels for evidence of our greyness – don’t worry this will still be relevant come the summer.