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[Music] hello and welcome to a brand new episode of It’s not that simple from the F Francis Manuel today we’re focusing on the power of the European Union and we’re doing it with Finnish American Author law professor and expert in international trade law Anu Bradford it’s going to be fantastic to have an opportunity to speak with someone who’s such an expert in this uh subject she’s quite a sought-after commentator on the European Union the global economy and digital regulation as well we’ll be addressing her two famous works she’s the author of the Brussels effect how the European Union rules the world and also uh digital Empires the GL glal battle to regulate technology Anu thank you so much for joining it’s not that simple we’re going to break down this incredibly uh relevant topic of the power of the European Union so to kind of set the table for us a general introductory question of how the power of the European Union affects all of us within its borders first so first of all thank you so much for for having me here it’s truly a a pleasure so I think I would say first that there are many different dimensions to power so we can talk about military power we can talk about economic power and we can talk about regulatory power so the EU is not a military power it has not traditionally being a geopolitical actor but it is a very strong economic power it is a trade power and in particular it is a regulatory power so maybe I can unpack that last concept a little bit please so the EU is very famous for having the powers and the desire to regulate the internal Market whether we talk about digital regulation environmental regulation consumer safety um food safety these are issues that really affect every European every day so it affects the the food we eat the air we breathe the products we produce and consume so these are the elements that really can be Trace to the decisions that are made in Brussels and and that is where the EU has really become not just the European power but a global power so the EU is one of the largest and wealthiest consumer markets in the world and there are very few global companies that can afford not to trade in the EU so as the price for accessing the European market they need to comply with European regulations but often these companies are extending these European Reg regulations across their Global conduct and their Global Production because they want to avoid the cost of um complying with multiple different regulatory regimes so this way by setting these regulations to the European market Europe often gets to regulate the entire Global marketplace with its regulations like privacy or regulations around the environment we’re going to get into some of those regulations a little bit later but what’s Curious is I think most of us as European citizens consider the EU to be impactful in uh in its territory in Europe in the member states but why is it so uh uh influential as well outside of its borders because obviously and you coined the Brussels effect coming from the title of of your book but it’s clear that it has a huge impact on what happens outside its borders why yes so the Brussels effect really refers to this European Union’s unilateral ability to regulate the global Marketplace so global companies they like uniformity they don’t want to have multiple different production lines so that they would produce cars for each different Market or they would have different variations of every food product that they are offering across the globe so they want to standardize so how do they decide what is the standard towards which they are producing often they take the the most stringent the highest standard because if they have very very demanding environmental regulations to comply with and they then conform their entire production to conform to those environmental regulations they have access to all the markets around the world and often it is the EU that does set that highest standard so as long as the companies are compliant with the EU standard then they can uh sell their products or provide their services across the world so if I take an example of data privacy regulation the general data protection regulation or the gdpr of the EU that has become a global goal standard so really powerful companies like apple or Microsoft or Google or meta they are now using the eu’s gdpr as the global privacy standard because it would be very hard for them to run a business whereby they would have different privacy standards let’s say in 150 countries and More in which they operate so this is the logic that often then steers the global companies to the EU standards across the markets you you mentioned that obviously the EU and its regulatory power has a huge influence in in in our in our uh uh Society in our culture in the way that we uh live on a day-to-day basis do you have more specific examples of of of how it affects the economy and the environment as well yeah so in many ways if you if you you think about uh issues like environmental safety so the EU has uh uh enacted many regulations on emission standards or the way we want to make sure that the that the products conform with the various environmental demands whether it is about uh pollutants we use or pesticides and those are something that I think the European consumers would not even realize that they benefit from on a daily basis they may take for granted that they do benefit from a cleaner environment and the products that conform to let’s say to the kind of plastics uh that do not uh uh damage uh our environment and that is often because the EU has decided to push forward with those regulations and it has also then been easier for European businesses because you don’t want to be a Portuguese company that that produces various products and every 26 remaining EU member state would have a different require on what those products ought to look like in terms of the environmental safety standards so by harmonizing the Environmental Protection across the EU and elevating the standards of environmental production the EU has manage to ensure a marketplace where you can smoothly trade across the EU but also ensure that all EU producers are then adhering to those those High environmental standards so that would be one concrete example but if I mention something else um all Europeans love the idea that they can travel across uh the EU and not pay too much for uh the airline tickets and by making sure that through its competition law the markets remain competitive then the prices are also down and that benefits All European uh consumers or then the idea that when you are a Portuguese citizen who is traveling in Italy or Austria or Sweden you don’t need to pay roaming fees when you are using your cell phone correct very few people realize that that is also a benefit that can be traced to the regulations that emanate from Brussels it’s so important to have that regulation Anu I think especially for the European Union as well to be competitive with the other superpowers around around the planet uh um but a lot of people would would argue as well and we’ve all seen memes that that talk about the the the regulatory influence that the EU have uh um being being perhaps also a hindrance towards being competitive with a us or a China in the global in the global market uh is there too much regulation in your in your view across uh uh the landscape when we talk about uh uh what’s possible or not within the territory to compete with a us or China that have perhaps less regulations and can be more Innovative and more disruptive so this is really a a key question and I’m really glad that you are asking that so first of all the Brussels effect does level the playing field so the idea is that the European companies would not be at at competitive disadvantage if we also have now foreign companies Elevate their Regulatory Compliance to the level expected of European companies so this way if you have an American company conformed to the European environmental standards and then compete against European companies in the US they hope Market or in China or Japan then uh the Europeans would be at the same level so in that sense as long as those European regulations get externalized through the Brussels effect then the European companies would not be at disadvantage but that said I think it’s still important for us to think about the relationship between regulation and Innovation and especially in the domain of digital economy there’s been this perception that is very common that Europeans are regulating heavily uh the digital economy Americans are not America is uh the place where all these new uh Technologies emanate and is then the reason that the Europeans are not able to keep up with the us because they are regulating too much so I do think that we need to ask the question why the Europeans tech companies are not on par with American and Chinese companies but I don’t think the reason is European commitment to digital regulation there are other pillars of the tech ecosystem that we have failed to build in Europe and that should be absolutely the priority so my invitation for the next commission for the next European Parliament would be really to focus on this issue as an absolute urgent priority so we need to do a couple of things so if I mention four um they I think should be on the top of the political agenda first we really need to complete the digital single Market we talked earlier about harmonizing those regulations across the common market we have failed to do that in many domains of the digital economy which means that it’s very hard for European companies to scale across the entire EU if they face not only different languages and cultural expectations but also regulatory barriers second we really would need to complete the capital markets Union it should be easy for a startup from ptical to raise money not just in the Home Market but also from Sweden also from Poland also from Germany and that requires that we have a deeper uh a robust Capital markets that we currently don’t have in Europe third uh Europe would need to be a place where the entrepreneurs can take risks but that means we need to tolerate that sometimes the entrepreneurs fail and we still in Europe have very punitive bankruptcy laws that penalize entrepreneurs if they fail and we have a culture that is not forgiven that doesn’t give the entrepreneurs always the second chance whereas in the US that is baked into the Silicon Valley’s Venture Capital Industries model the entrepreneurs try really hard things sometimes they fail but they can raise money again uh because we understand that that often the hard things do do result in failure and after that new success can emanate and the final thing we really need to be able to as Europeans to tap into the Global Talent in the domain of Technology this is something where the Americans are way ahead of the Europeans the US is the place where many entrepreneurs come to innovate they come to study they stay there to benefit the American uh labor market and the Europeans would need to be much more thoughtful in how do how they create the pathways for high skill immigration so that that global Talent will also find Europe as an attractive destination that was an incredibly comprehensive answer and I think it touched on specific areas uh regarding what the EU needs to to do in order to be competitive and guarantee that what can it learn specifically from the US and China when it comes to their approach uh towards regulating big tech and and making sure that Innovation can happen on on on our territory like it does elsewhere like you touched on in in your book regarding regarding the digital Empires so first of all I think the Europeans need to be very clear on where they would want to emulate the US and China and we’re not okay if the Europeans are not comfortable with the business model of Google this culture of surveillance capitalism where the consumer data is exploited for commercial purposes I am not sure that the goal ought to be to create a European gole or the reason that the Chinese are leading in AI including faal recognition technology in part because they are very comfortable with extensive surveillance of their population that may not be the European way so even though I say that all regulation is not beneficial I think neither is all Innovation and I think we would really need to have a conversation what are the kinds of technological innovations that the Europeans ought to be pursuing that is still consistent with with European values but that said I think there’s a lot that we could learn from uh China and from the US there has been tremendous ambition that has fueled the entrepreneurship in those countries I would say in the US view of the issues that I mentioned the country’s commitment to diversity being the hot bed for Global Talent that is certainly something that I think Europeans ought to be imitating or they um comfort with risk taking the acceptance of failure even a celebration of failure is something that the Europeans ought to be I think looking to with with some something that we very comfortable and ought to be uh ought to be replicating um so I think there there are certain uh conditions that have enabled the Innovation to emanate uh from the us including I would mention the close relationship between the business world and the Academia that has really enabled for the culture of Entrepreneurship to emanate from those academic research institutions and be more connected to that real world where the innovative applications are then uh developed for Technologies so I think there’s a lot that we can learn but also going back to what I said in the beginning we need to do it in the the way that the Europeans are comfortable that really sort of serve the the European view on what an ideal digital economy and digital society looks like yeah and it’s so different the landscape in Europe compared to the US if you think that you’re dealing with different languages different cultures different values different local and and National laws right so it’s it’s it’s it’s a difficult comparison to make how how worried are you when you look at the the current state of of of the the political the political Trends in Europe and the rise of authoritarian uh governments as well in in certain Pockets how worried are you that that the continent in the EU uh is going to be able to stick together regardless of what happens in in particular member states in order to be be able to stay cohesive and competitive across the board so I do worry about politics not just in Europe but around the world so what we are seeing is worldwide a a rise of authoritarianism we see uh a decline in commitment to Liberal democracy so the authoritarian countries are getting more authoritarian and we also have the world’s democracies that are becoming less committed to Liberal democracy I worry about the US presidential election this coming fall but we also have many worrying Trends in Europe with the rule of law backsliding with the threats to our commitment to democracy we have had many member states where some fundamental commitments to rule of law and European values have been under threat and uh so we have the rise in in in Far Right the populist parties that pursue agendas that are that are frankly fundamentally inconsistent with the foundations of the European project so this election is is of utmost significance because we will be making choices collectively as Europe uh that are very consequential to to all member states and we really need to make sure that that those decisions will be made in ways that that restore our confidence to our political systems and protects the fundamental values uh on which the Europe has been being found so there is certainly concern about the um fragmentation of the political landscape the rise of the the the populism but that was the concern before the last election as well and and those did not materialize at the last election so I think what I really hope to see is the kind of revitalized interest in the Democratic process across the member states which would mean that people go to the polls they show up and they use their voice they use their vote and really believe showing that they have a stake in this next election uh in Europe and they care about the direction of their own governments but also the decisions that very much are their decisions as well that will be made in Brussels do you think that there are unprecedented challenges for uh the EU as far as Communications and influential standpoint when it comes to reaching the citizens of the different countries with the increase of nationalist uh uh ideology uh with authoritarians where it they find it harder to to make their message get to the people who are bombarded with so many different other messages from their local politicians is that is that a situation that that occurs now that we’ve never seen before obviously with the uh uh the the digital media propaganda that we’re all subjected to on a daily basis whether we like to or not so I do worry about this so there is now so much noise it’s not the first time in history that we are dealing with um uh attempts to distort uh the uh the Democratic discourse or election interference but we really are now at the era when this can be done at scale when our relationship to truth has deteriorated when the amount of disinformation that is surrounding us in the online space uh where most of us are now receiving our information including information about the election and now we also have artificial intelligence that is amplifying existing problems with disinformation when we have deep fakes we have audio we have video generating such plausible sounding and looking sources of information that it is very difficult for individual voters to be always certain of what information they can rely on what is truth and what is not and and we do have now attempts in the European Union to regulate the digital economy in ways that we would have more responsibility by these platforms to to try to ensure that we prevent uh the prevalent uh disinformation that AI is not used in ways that undermine the Democratic process but the legislative framework is not yet so complete the enforcement is not yet at the level that I could say with confidence that the elections are safeguarded so we do need to be very very Vigilant both as being critical as voters to consume the information to verify that we are acting based on information that is truthful but also holding the platforms accountable that this is why I very much support the efforts that are now underway from Brussels that are seeking to to hold uh under the Digital Services act that are seeking to hold the platforms accountable for any systematic attempts to interfere with the election through disinformation yeah because in hindsight we look at the impact that uh uh uh the social media platforms and uh the so-called fake news had on the brexit vote in the UK uh the US elections obviously uh two terms ago uh and this is why the the regulation is so important isn’t it Anu when it comes to uh the digital landscape uh making sure that there is accountability there and that the standards in the EU continue to be at the highest possible threshold so absolutely I think in the US there has traditionally been this this notion that okay we trust the tech companies to self-regulate that that ultimately we should not have the governments intervene but I think these tech companies they have failed us spectacularly and repeatedly we cannot trust that they will work uh with always with public interest in mind they have their business incentives they have their profits uh they have the incentive to promote content that is more scandalous because that kind of content often gets more traction and that means there’s going to be more advertising Revenue attached to the content that spreads uh so uh much faster so that’s why I firmly believe that we do need to have regulation and and support uh the Digital Services act support um the the regulation of artificial intelligence that have been the priorities of this this past uh commission and and the enforcement of which will be absolute key for this next uh commission as well but including already in this European election we really need to make sure that the the election will be uh uh conducted with the the with the highest possible Integrity when it comes to the accuracy of the information we’ve talked about some of the challenges some of the threats that are there uh what’s your biggest hope for the European Union over the next decade if there’s one thing that it needs to get right and it can get right uh what do you think that is so in many ways look first of all I am hopeful in in many of these big decisions that we have confronted as societies I think the Europeans have shown themselves that they have been and are prepared to be on the right side of History uh they have been leaders uh when it comes to uh fighting climate change pursuing the kind of standards that that preserve our planet uh they have been the Front Runners in protecting the data privacy of the individuals and creating the kind of digital Marketplace and digital environment that is fair and more just and and and ultimately uh um uh the kind of environment uh in which the citizens come first where the digital transformation is human Centric and where our rights are protected so in many ways I think the Europeans have been leading the path uh that is uh uh that in the long run when you look back turns out to be consisting primarily of right choices I do worry though that the the geopolitics the they the reality the world within which the European project now will evolve is increasingly dangerous so we have assertive Russia that launched a brutal attack on on Ukraine we have war in the Middle East we have growing tensions around South China Sea between the two superpowers uh China and the United States so um there is no space for complacency and I think one big uh hope that I have for uh the next you say five to 10 years of Europe is that Europe can contribute towards um a more stable World towards a more peaceful world world but also Europeans cannot afford to be naive but the Europeans need to be making choices that insure not just the well-being but just the fundamental security and and safety of Europeans and that is a new territory but I’m just afraid we no longer have the luxury of just looking at the world and relying on the safe the umbrella of the United States that is becoming increasingly I think uh uncommitted it uh depending on what happens in the presidential elections and uh so the Europeans need to be able to sort of take charge of Their Own Destiny and not be strategically dependent on the choices made by others for Europe so in that sense I am optimistic but but I also think that there is a time for hard decisions for big decisions that they may call for choices that Europe just wasn’t forced to make in the past definitely the EU the EU has to own its own decisions moving moving forward Anu we’re going to um uh wrap up this conversation with a section that we always have which is the quickfire uh part of the interview so I’ve got a few questions here that I’d appreciate if you could answer with just one word or one sentence so the first one is what is one personality trait that a good leader could really benefit from having and why so I think we need responsible ambition I think we need to really be much more ambitious about Europe going forward but also understand that the decisions that we making right now are very consequential so they need to be made in a particularly thoughtful way what is the biggest challenge that you feel humanity is facing right now so I would say that the biggest challenge is around climate change uh that is something but at the same time also the digital transformation that really puts our democracies at risk and if you erode the Democratic foundation of the societies the decisions we make about anything including climate will be at risk if you could change one thing by Magic right now or until the end of the day to give you a little bit more time what would that what would that be if you could change one thing in the world right now uh so we have uh Wars that just need to end we just just the human suffering at the scale that hurts to watch on on a daily basis so whether we talk about the war in Ukraine whether we talk about wars in Middle East this is the kind of a reality that is just painful to watch and that is would be the first thing I would change very good one uh what is the most important learning of your life and career if you could sum it up look I think ultimately there there’s just so much that I’ve learned but I think one thing I probably would pass on is that you need to pursue your own dreams not the Dreams by somebody else and ultimately I think that will Empower you with the choices that you are making and that’s I think one of the issues that I’m most grateful for of how I was raised I was raised to chase not my parents’ dreams or somebody’s else’s but really do the things that matter to me and I think that has made my life at least very meaningful and what I try to teach to my own students going forward that’s what I’m going to what I was going to say I’m sure that’s a message that you pass on to your students as much as possible as well so important for today’s youth to to hear that and feel that right absolutely absolutely ano it was an absolute Delight to have you here on it’s not that simple thank you for breaking down how the EU works from a regulatory uh uh point of view and continued success in your career thank you so much it really was my pleasure thank you for having me thank you Anu uh such an enlightening conversation and uh uh we touched on so many relevant and tough topics as we look at this uh uh area of of the EU and the work the responsibility it has towards its member states and towards its citizens as we stand here at such a pivotal moment in the future of what the EU is all about it’s been fantastic to have you here along for the ride for another episode of It’s not that simple [Music]