COLUMN: "Brussels rules OK: How the European Union is becoming the world's chief regulator," by Charlemagne, The Economist, 22 September 2007, p. 68.ARTICLE: "Safe Food for Japan: U.S. Studies Its System for Screening China Exports," by Martin Fackler, New York Times, 11 October 2007, p. C1.
With the EU, this has been a theme of mine for years now: it becomes a regulating superpower. Only natural since the EU is the "uniting states" of its era, so a great source of good rules.
The EU model is more "precuationary" while the U.S. favors the cost-benefit analysis that often takes a long time to find "Michael Clayton"-style justice (fab movie, BTW, I saw last night with Vonne: perhaps Clooney's best perf to date and a Oscar nom for BSA to Tom Wilkinson in a heart-rending portrayal).
Why the EU is a good one for today: with the simultaneous explosions of connectivity and technology and transactions, better to lean more heavily to precaution. We simply don't have enough global legal structure yet to hope it'll all work out fast enough to avoid disastrously rapid retreats from connectivity following preventable disasters.
Also nice to see Japan get more prominent in this role vis-a-vis China.
People ask me often why I'm so optimistic on the future. It's stuff like this: tons of smart people systematically looking ahead, or a meritocracy of rules where the U.S. is smart enough to copy now and then and not just always assume leadership.
Clayton, one notes, did the right thing in the end, after a lot of suffering.
Comments (4)
Interesting you mention precaution. The EU has been lambasted for years by US gov't (USDA particularly) and agribusinesses for following the precautionary principle with regard to Genetically Modified food. With all the food recalls over the last few years, I wonder if that's changed.
Posted by Chad Laux | October 16, 2007 9:22 AM
How do we do it in such a way as to preserve the imperfect stasis and/or help the trade deficit? Devalue our way to prosperity per Morgan Stanley?
Conundrum no? If we push the same standards as "home" then the fuel powering the productivity boom dies (already is). The labor, environment, legal, financial subsidy arbitrage is slowly closing. If I were an emerging market I would squeeze every last inch out of the Core (one of the sole remaining rational actors in geopolitics) and hope by that point the internal markets were self sustaining (enough to provide kindling for future springboard). It looks like we are at the end of the cycle with foreigners finally selling (net) treasuries - check TIC data.
The misnomer here is that the Core is going to "scoop" a major portion of the new core's market share. Emerging markets are rapidly moving up the value chain. The incremental share pickup for the core will come at the expense of major erosion in incumbency share across products.
The Core got there prize over the past decade in cheaper consumer goods - "inflation in evrything we need and deflation in everything we want" (per Minyanvile.com). Stow your tray tables and assume the crash position - this landing is going to be painful...
Posted by s | October 16, 2007 12:34 PM
It is interesting that Leadership is considered "news" these days.
Posted by Christopher Thompson | October 16, 2007 5:07 PM
The EU as a model for how it should be done? All I can say is ... interesting. I'll leave it at that.
Posted by SteveSadlov | October 16, 2007 9:18 PM