In this piece, I build upon Andrea Fracasso’s insight, where he observes that “Some are suggesting a review of green economy regulations in the EU because of their impact on production costs. While it is necessary to consider the relevance of this phenomenon, it should be remembered that European technical requirements mean that only the most productive companies can sell in Europe. These requirements can limit the influx of low-cost, low-quality products from the rest of the world better than discriminatory European tariffs. Again, there is a balance to be struck. Two wrongs don’t make a right.”
I propose extending this reasoning further, exploring whether the same logic holds true in other critical regulatory areas such as genetically modified organisms (GMOs) or digital market standards.
Technical regulations serve as strategic tools within the European Union (EU) to uphold public interest objectives – such as environmental sustainability, consumer safety, digital fairness and data protection – while fostering a competitive and innovative market environment. Unlike traditional tariffs, which primarily protect domestic industries by imposing duties on imports, technical regulations set clear, non-discriminatory standards that all market participants must meet, regardless of their origin.
Protective tariffs can inadvertently create economic inefficiencies by insulating domestic industries from global competition, potentially fostering complacency and stifling innovation. They can also provoke retaliation from trading partners, escalating into trade disputes that can harm broader economic interests. In contrast, technical regulations set performance and quality benchmarks that promote higher standards across the industry. By requiring all products and services to meet these standards, the EU ensures that only those that meet its strict criteria can enter its market. This approach not only protects consumers and the environment, but also incentivises both domestic and international producers to innovate and improve quality to meet these standards.
Case studies illustrating the impact of technical regulations 1. Environmental standards and the green economy: EU environmental legislation, such as the Ecodesign Directive, sets requirements for energy-related products to improve their environmental performance. These standards have effectively reduced the influx of low-quality, energy-inefficient products and encouraged manufacturers worldwide to adopt greener technologies in order to access the EU market.
2. Digital Markets Act (DMA) and Digital Fairness: The DMA aims to ensure fair and open digital markets by imposing obligations on designated “gatekeepers” – large online platforms that have a significant impact on the single market. By setting clear rules on data use, interoperability and platform neutrality, the DMA prevents anti-competitive practices without resorting to protectionist tariffs, thereby fostering a more competitive digital environment. ? 3. General Data Protection Regulation (GDPR) and data protection: The GDPR sets strict data protection and privacy standards for all companies handling EU citizens’ data. This regulation has set a global benchmark, forcing companies around the world to improve their data protection measures in order to operate in the EU, thereby promoting higher standards of consumer data protection internationally.
The theoretical ideal: balanced and calibrated technical standards The overarching theoretical ideal is that well-designed technical regulations can simultaneously protect public interests, stimulate global innovation and enhance competitiveness without resorting to overt protectionism. By focusing on the quality and performance of products and services, these regulations create a level playing field where market access is determined by merit and compliance with established standards. This approach not only benefits consumers and the environment, but also encourages producers worldwide to innovate and improve, contributing to overall economic growth and development.
The EU’s emphasis on technical regulations rather than traditional protective tariffs reflects a strategic commitment to promoting a high quality, competitive market that is consistent with public interest objectives. This regulatory framework serves as a model for balancing market openness with the protection of societal and environmental values.
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