Trading Up in the Transatlantic Relationship

Abstract

This article analyses the conditions under which a race to the top or California effect is likely to take place. To that end, it examines two cases in which the EU restricted or threatened to restrict imports from the United States and Canada because of differences in regulatory standards. In one case, the European data protection directive, a California effect occurred. In the other case, the EU ban on hormone-treated beef, no California effect occurred. An analysis of these two cases leads to two additions to existing explanations of the California effect. The analysis also has a number of implications for the debate on the race to the bottom thesis.