by Ceyhun Emre Doğru
Brussels has now become a center that sets the rules for the international business world. The EU not only determines which rules private companies will adhere to provide products and services to their citizens, but also becomes a key actor in the global economy by exporting policies and regulations to the countries outside the union, which is called as “Brussels Effect”.
The Brussels Effect provides an important framework for understanding the global power of the EU. That policies such as product safety, competition, environmental protection, and data security implemented by the EU Commission become international norms makes Brussels emerging as a hegemony that shapes global markets.
The Brussels Effect comes to the fore in two ways. The first is through international companies changing their way of working. Since applying different business models in each country increases the costs, these international companies that have to change their production and operation strategies are also applying their new ways of working while operating in other countries. In this way, citizens of other countries have also started to receive products and services at the EU standards. Secondly, The Brussels Effect occurs as non-EU countries comply with the EU legislation with the demands of international companies. The international companies which offer products and services in non-EU markets according to EU legislation, demand that the governments in the countries they operate in harmonize their national regulations with the EU legislation.
The outcomes of the Brussels Effect are going to be felt more closely in two areas in the near future as digitalization and sustainability. The digital economy and other issues around it are the top of the areas in which Brussels has expanded its sphere of influence. For example, GDPR (General Data Protection Regulation), which is a milestone in terms of data security, is one of the most important regulations affecting the international business world. The regulation is also implemented in other countries by technology companies serving EU citizens. In addition, similar applications emerge in areas such as artificial intelligence, online content control and competition. There is a similar effect in a sustainable economy. The aim of the European Green Deal, which originates from the sensitivity of the citizens of EU member states in environmental issues, is to make Europe a continent with zero carbon emissions by 2050. Green Deal covers almost all sectors of the economy, especially industrial sectors such as transport, energy, agriculture, steel, cement, information and communication technologies, textile and chemistry, which will change not only the European economy but also the global trade and investment balances.