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