46 Europe The EconomistFebruary 8th 2020
T
he britishplug is a marvel of design. Its insulated prongs
make electric shocks nigh on impossible, even if it is hanging
out of the socket. Shutters cover the live holes on the socket until
the earth is engaged, meaning even the most adventurous toddlers
struggle to electrocute themselves. Yank out the cable and the live
wires will disconnect before the earth, further reducing the chance
of anyone being fried. It is probably the safest plug on the planet
(unless trodden on). Yet apart from Britain and a few countries that
lived under its imperial rule, the Great British plug is spurned for
flimsy, sometimes dangerous two-prong affairs.
As sales of British plug adaptors suggest, it takes more than
good design for standards to be adopted globally. For such influ-
ence, an alchemy of regulatory clout and market power that Britain
simply does not possess is required. But it is a blend that the euhas
learned to master. Everything from timber production in Indone-
sia to internet privacy in Latin America is now settled by a bunch of
bureaucrats, diplomats, meps and lobbyists in the middle of Bel-
gium. This has been dubbed the “Brussels effect” by Anu Bradford
of Columbia Law School, in a new book of the same title, which ex-
plains how the euquietly has become a regulatory superpower.
The eu, no superpower in the traditional sense, pulls this off in
three ways. First, the eu’s market is so enormous—roughly a fifth
of global gdpat market exchange rates—that producers cannot ig-
nore the continent, no matter how onerous its regulation. Second,
in contrast to America where light-touch regulation is the goal,
Brussels revels in making its rules exacting. It prides itself on hav-
ing the toughest regulations on everything from privacy to the en-
vironment. So if a company wants to sell the same product every-
where, rather than wasting money on having lots of different
versions, it has to meet European standards. These two factors
combine to introduce a third way of influencing global regulation,
as companies sometimes lobby their domestic governments to
raise their regulations to European levels, lest a rival gain an ad-
vantage by producing shoddy stuff solely for their home market.
In this way, the Brussels effect has turned the eu into a self-per-
petuating policy machine. While more countries and global busi-
nesses find themselves sucked into its regulatory tractor beam,
one country is trying to escape. Boris Johnson’s British govern-mentischerishing divergence at a time when convergence with
the eu’s rules is the order of the day. Britain wants to build relation-
ships with countries outside of Europe. Often, though, these same
countries are moving in the opposite direction. Increasingly, glo-
balisation resembles Europeanisation. Britain can try to go it alone
in its own regulatory sphere, but it will probably prove as popular
as its three-pronged plugs.
The latest manifestation of this Brussels effect comes in the
form of another type of plug. The European Commission is pon-
dering how to compel phone companies to come up with a univer-
sal plug for their chargers. Apple, which uses its own design for its
charger cables, is mithering about the change. Critics fear phone
companies may end up stuck with outdated chargers until regula-
tors grant permission to change. But Apple’s complaints are likely
to be in vain, leaving the company with a choice: abide by the law
only in the eu, or change its plug in all markets. The latter option is
probably less costly. And unlike its British cousin, this type of plug
could well go global, whether it is a good idea or not.
Brussels can bend the likes of Apple to its will, but being only a
regulatory superpower has limits. When America killed Qassem
Suleimani, an Iranian commander, earlier this year, the commis-
sion president, Ursula von der Leyen, summoned her team. Weird-
ly, the commissioners responsible for such things as demography,
youth and health had to have their say on the prospect of war in the
Middle East. When it comes to soft power and tweaking plug de-
sign, the eureigns. In terms of hard power, the euis left resem-
bling Oasis guitarist Noel Gallagher’s description of his brother
Liam: “a man with a fork in a world of soup”.
Even where Brussels does run the show, the upside is not obvi-
ous. Brussels increasingly sets the rules for the internet. But it is
still large American companies that make the money (and the
American government which reaps the tax revenue). Indeed,
whereas Facebook and Google are big enough to digest whatever
regulation they are force-fed, smaller European firms may end up
choking. Aside from providing lobbyists with a healthy living and
keeping overpriced restaurants in Brussels’ European quarter in
business, the benefits of this arrangement are sometimes unclear.
Such advantages are not only limited but may also be short-
lived. The eu’s regulatory dominance is a recent affair. And the
blocks upon which the eubuilt this power are shuddering. The eu
is still one of the world’s biggest markets, but its share of the global
economy is likely to fall in the coming decades. As it shrinks, so
does the incentive to follow Brussels’ diktats.From Brussels to Beijing
Technological change may further weaken the eu’s power. Produc-
ing a complicated widget to different standards costs lots of mon-
ey as manufacturing must be rejigged. If 3dprinting becomes the
norm, the costs of abiding by both European and other standards
might well fall. In some areas, high standards may become a curse,
rather than a virtue. With artificial intelligence, companies under
sketchier regulatory regimes may build an insurmountable lead
via unethical experimentation. “What today amounts to the Brus-
sels effect may one day be described as the Beijing effect,” warns
Ms Bradford. Such shifts may be some way off. Countries are in-
creasingly forced to pick a sphere of influence. When the other
choices are an erratic America and an undemocratic China, the eu
has something to offer. But hegemony rarely lasts and the eu’s reg-
ulatory supremacy is unlikely to be an exception. Even the highest
standards can end up ignored. Just look at the British plug. 7Charlemagne The parable of the plug
How plugs explain the potential and limits of the EU’s strange superpower