Reversed Harmonization or Horizontalization of EU Standards?: Does WTO Law Facilitate or Constrain the Brussels Effect?

EU law establishes an internal market. To achieve that goal, it acts to a large extent as a regulator, setting standards. These standards are often legally binding inside of the jurisdiction of the European Union, but increasingly travel beyond the borders of the European Union on the back of the traded goods. In some areas, this leads to a “Brussels Effect,” where EU standards factually harmonize legislation at transnational level, creating a “race to the top” in international standards. This generates a level playing field for transnational trade, directed by the European Union as a de facto transnational regulator. Professor Anu Bradford brought forward the argument that a de facto or de jure transnational harmonization by EU standards might be facilitated or constrained by the World Trade Organization (“WTO”). The WTO could strike down such regulations as purely domestic ones without taking into account the fact that these EU standards have factually already achieved what the WTO aspires: removing barriers to trade between its member countries by establishing equal treatment of all trading partners as the norm. We will call this phenomenon of the Brussels Effect the “Reversed Harmonization Effect.” The WTO could also facilitate the Brussels Effect by providing a specific forum for negotiations, which favors the European Union as a dominant regulator, leading to a horizontalization of standards across the WTO. One may hence claim normatively that the WTO should take into account a broader view on the economic effect of these measures beyond their formal domestic jurisdiction by differing between domestic and horizontalized standards