The European Union (EU) is often overlooked in global power analyses that favour hard power, which finds expression in areas such as military strength, intelligence capabilities, or ideological exports.
Yet, beneath this surface lies a more subtle and often underestimated influence that shapes the global regulatory framework. Known as the “Brussels Effect,” this phenomenon reflects the EU’s ability to project its regulatory preferences beyond its borders through a form of market logic as opposed to raw force.
Defining the Brussels Effect
Columbia Law School professor Anu Bradford coined the term. It describes how EU standards often become global norms. This occurs primarily due to the size and desirability of the European market.
When the EU introduces new rules, companies take notice. These rules may relate to data protection, environmental policy, competition law, or consumer safety. International companies that want access to the EU market adopt these standards. They do so to avoid the cost of complying with multiple regimes. As a result, EU rules influence business practices worldwide.
Consequently, governments begin to align their own regulations with European standards. They incorporate these standards into their legal and regulatory frameworks.
A superpower in global rule making
In practice, this makes the EU a quiet superpower of rule making. For Africa in general, the implications are significant. In particular, countries like South Africa feel this impact strongly. They depend heavily on trade, capital flows, and foreign investment. Therefore, the EU’s regulatory influence carries real consequences for them.
A clear and instructive case is the EU’s General Data Protection Regulation (GDPR).
Since 2018, the GDPR has set the global benchmark for data privacy. Tech companies across South Africa quickly restructured data handling policies. They aligned these policies with the EU’s expectations.
South Africa adopted POPIA before the GDPR came into effect. Despite this, POPIA still echoes the EU’s direction. This echo reflects more than a sovereign policy choice. It shows a broader imperative to stay interoperable with global standards. South African lawmakers watched the GDPR debates unfold for years. They likely took notes when drafting POPIA in response.
Influence on domestic policy and strategy
Even small businesses hoping to expand into the EU or process data from European clients must understand and adhere to these standards.
This is the Brussels Effect at work – not as an imposition, but an indirect alignment that shapes decisions behind the scenes. This influence reaches beyond private companies, subtly reshaping public policy as well.
In 2021, former Eskom CEO Andre de Ruyter openly acknowledged that the entity’s decarbonisation strategy was not being shaped only by internal energy constraints, but also pressure from the EU’s evolving climate policies, particularly the then-anticipated Carbon Border Adjustment Mechanism (CBAM). This mechanism, which is now being phased in, will impose levies on carbon-intensive imports into the EU. For domestic industries exporting goods to Europe, this could mean additional costs unless “cleaner” production methods are adopted.
While CBAM is a policy of the EU, its ripple effects are felt in Eskom’s boardroom and Pretoria’s policy frameworks alike.
Caution against uncritical regulatory alignment
While this trend is not inherently coercive, it is important to resist viewing regulatory alignment – especially with strict environmental or so-called “privacy” standards – as an unquestioned good.
Notwithstanding the abstract merits of such standards, they can also contribute to asymmetries in the global trading system, where developed economies set the rules and developing economies are expected to comply. As Minster of Trade, Industry, and Competition Parks Tau cautioned in 2024 in response to the phasing in of CBAM, unilateral action by developed economies risks sidelining the interests of developing states in international blocs such as BRICS. He further stressed the importance of inclusive dialogue and joint effort in shaping global norms.
Impact – burden or opportunity?
Ultimately, countries like South Africa need to legislate and regulate appropriately to their domestic environments. Having to consider the regulatory frameworks of strong foreign economies often leads to destructive domestic outcomes.
For businesses of all sizes, but especially for smaller firms, regulatory alignment with EU standards – especially if directly or indirectly imposed by the South African government – can carry significant cost implications. Larger companies may have more resources at their disposal, but even they face the challenge of adapting complex operations to comply.
For smaller enterprises, these demands can stretch already limited capacity and divert attention from core business activities.
The unintended effect is a trading environment where access to key markets depends less on innovation or competitiveness and more on the ability to navigate administrative and legal hurdles. Without mechanisms to ease this burden, such trends risk entrenching existing inequalities and discouraging broader participation in global trade, particularly from developing economies that are trying to scale up their productive capacities.
Regulatory overreach and the need for sensitivity
These concerns resonate with the Free Market Foundation (FMF)’s Liberty First initiative, which underscores the need to reduce regulatory burdens that hamper economic participation.
The FMF emphasises how overregulation can entrench structural barriers, distort competition, and undermine the conditions necessary for broad-based growth. In the context of global alignment pressures, such as those shaped by the Brussels Effect, the core insight remains: policy frameworks – whether domestic or external – must be attuned to the realities of doing business in developing economies. Without this sensitivity, regulatory convergence risks reinforcing global inequalities under the guise of harmonisation.
Strategic adaptation over passive compliance
In light of this, South Africa must navigate these external pressures carefully and prioritise strategic adaptation over passive compliance.
The country cannot afford to disengage from a global landscape increasingly shaped by external regulatory standards. Nor, however, should we treat alignment as an inevitability.
As EU rules extend their reach, the task is not compliance for its own sake, but strategic adaptation that maintains competitiveness without surrendering autonomy. Quiet influence must be met with quiet resolve, which is measured, deliberate and firmly anchored in the national interest.
Ayanda Sakhile Zulu | Intern | Free Market Foundation | mail me |
