> Mario Draghi has argued that the EU's internal barriers, which are equivalent to a high tariff rate, cost more than external tariffs. He has cited IMF estimates that show these internal barriers are equivalent to a \(45\%\) tariff on manufactured goods and a \(110\%\) tariff on services. These internal market restrictions, which include regulatory hurdles and bureaucracy, hinder cross-border competition and have a significant negative impact on the EU's economy.
Sure, someone argues something. Who knows if it's right or wrong? It's not a hard science.
How do you estimate the cost of regulations on businesses? You ask businesses. Businesses have absolutely zero incentive to say that regulations are not bad. "Just in case", they will say it hurts them.
That is, until there is a de facto monopoly and they can't compete anymore, and at that point they start lobbying like crazy for... more regulations. Look at the drone industry: a chinese company, DJI, is light-years ahead of everybody else. What have US drone companies been doing in the last 5+ years? Begging for regulations.
All that to say, it is pretty clear that no regulations is bad, and infinitely many regulations is bad. Now what's extremely difficult is to know what amount of regulation is good. And even that is simplistic: it's not about an amount of regulation, it depends on each one. The cookie hell is not a problem of regulations, it's a problem of businesses being arseholes. They know it sucks, they know they don't do anything with those cookies, but they still decide that their website will start with a goddamn cookie popup because... well because the sum of all those good humans working in those businesses results in businesses that are, themselves, big arseholes.
> Businesses have absolutely zero incentive to say that regulations are not bad.
Your overall point is solid, but I'd like to what I think is another reason that businesses could desire regulation. You're right that a dominant business can use its political power to "regulatory capture" its market and prevent new entrants, but I believe this isn't limited to uncompetitive markets.
Regulation can also prevent "arms races" by acting like explicit collusion. A straightforward example is competitive advertising in a saturated market, like cigarettes. Under the rough assumption that cigarettes are all equivalent and most potential smokers already smoke, then competitve advertising cuts into the profit margin, and companies have to participate or lose out. If you ban advertising then it's as if the bosses all got together and agreed not to compete like that. See e.g. https://pubmed.ncbi.nlm.nih.gov/31547234/
That's an executive order (regulation) requiring proposed regulations undergo a cost-benefit analysis before being promulgated.
It's why we got mandated backup cameras in cars: the cost-benefit analysis revealed the cost to have these in every new car was dwarfed by the cost in human lives of all the kids who were being run over in driveways bc they weren't visible behind cars.
Right, but that's a follow on to regulations about increased rear and side still heights for occupant protection, and that's a follow on from increased vehicle sizes, and that's a follow on from commercial vehicles being sold to the general public instead of regular passenger vehicles due to tax breaks, etc.
I was somewhat disappointed, however, to aee that this applies only to "major rules" from "executive agencies" and as such doesn't seem to apply to an executive order. There would have been some recursive satisfaction to see EO12291 itself tested by its own standard.
That article does contain the correct answer, so thank you very much for finding it, although the passage you've quoted is ChatGPT gibberish not in the source given.
Per https://iep.unibocconi.eu/europes-internal-tariffs-why-imfs-..., the model treats shopping local as evidence of the existence of a trade barrier, as opposed to a rational preference based on cultural and environmental considerations. This is why the numbers are ridiculously high. (Is there a 120% implicit tariff for textiles? Or do people just prefer warm clothes in the north and breezy clothes in the Mediterranean?)
At scale, no. But when very small there is a reason that people from Norway made rain jackets, and the brand cachet follows that too.
European people also still have a much stronger national identity than a European identity, especially compared to the US with state vs. country level.
Where? When there's not a more obvious choice trade is done in English, packaging usually has multiple languages (which are often mutually comprehensible with other nearby languages) and your instruction booklets and regulations are given in the 24 official languages. Sure not every country has a good standard of English, but even France seems to be able to get by.
The translation infrastructure is huge, and reasonable-quality machine translation⁰ has been freely available for years now.
I don't mean to refute your experience, but I am suprised by the claim, because it's really not what I've seen here. Could you give some more detail on what you mean.
> Where? When there's not a more obvious choice trade is done in English, packaging usually has multiple languages (which are often mutually comprehensible with other nearby languages) and your instruction booklets and regulations are given in the 24 official languages. Sure not every country has a good standard of English, but even France seems to be able to get by.
All of this is correct, and that's why the single market for goods (except for booze and tobacco) has been such a massive success. However, lots of growth (particularly in the US) comes from services, and for this, languages matter a lot more.
Sure, lots of continental Europeans speak multiple languages, but the vast discrepancies in languages and regulations (insolvency, capital markets etc) means that there are dis-economies of scale in the EU. Like, there's a reason that companies start selling in their home market and then move directly to the US.
A common language can't be assumed across the EU, while other large blocs (China, US) can make this assumption which is important for services trades in particular, as well as bespoke goods trade.
Ah, you're absolutely right. Only when reading your comment did I realise that I'll often go to the UK for some human-mediated service I need in English.
(This despite Ireland and Malta having it as an official language, and the Nordics often having better English skills than natives.)
Source: https://iep.unibocconi.eu/europes-internal-tariffs-why-imfs-...