Do Environmental Rules and Standards Affect Firms’ Competitive Ability?

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Table of Contents: I. The economic background. – II. Economics v. law: a different approach. – III. The evolution of EU environmental law: from a neo-classical vision to the precautionary principle. – IV. The intensity of EU environmental protection and its capability to affect EU firms’ ability to compete. – V. Main features of European environmental policy and their extraterritorial reach: an attempt to combat regulatory competition at international level? – VI. Regulatory competition in environmental standards and trade agreements between the EU and third countries. – VII. Potential perspectives of the EU action: an implied attempt to engage in a “race to the top”. – VIII. Concluding remarks.

Abstract: The Article considers whether EU environmental standards are relevant for the competitiveness of our firms and analyses this phenomenon under the lenses of EU law and case-law as developed through the decades. Starting from the first environmental rules adopted by the EEC prior to the conferral of competences in this field by the Member States to the Community in order to remove “non-tariff barriers” to trade within the (old) common market, the analysis moves to the implications for EU firms of EU environmental standards as they have been established within the EU environmental policy and consistently with the goal of a high level of environmental protection within the EU. The analysis seems to show that within the EU a race to the bottom never occurred; on the contrary, the EU comprehensive legislation on environmental purposes based on the duty to comply with high environmental standards has improved EU firms’ competitiveness in the global markets. Given these results, the author welcomes recent EU initiatives aimed at adopting unilateral “extraterritorial” environmental standards applicable to non-EU firms engaged in trade with the EU, or to negotiate high environmental standards within trade agreements executed between the EU and third countries.

Keywords: competitive regulation – environmental protection – European Union – international trade free trade agreements – WTO.

European Papers, Vol. 4, 2019, No 1, pp. 207-224
2499-8249 - doi: 10.15166/2499-8249/301

* Professor of European Union law, Department of Law, University of Genoa,


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