New EU Directive Challenges Global Supply Chains and Sovereignty

Impact of the New EU Directive

The New EU directive on corporate sustainability due diligence requires businesses to identify and address adverse human rights and environmental impacts both within and outside Europe.

Regulatory Competition and Its Consequences

This directive could result in a regulatory competition as countries strive to achieve domestic environmental goals and indirectly impose regulations on other nations.

• Sovereignty at Risk: Countries may face challenges to their sovereignty as external regulations dictate domestic policies.
• Impact on Global Supply Chains: Compliance may lead businesses to reevaluate operations in countries with less stringent regulations.
• Legal Repercussions: The directive allows lawsuits against companies for environmental or human rights violations throughout their supply chain.

Concerns Raised by U.S. Businesses

In the U.S., businesses are calling for intervention, highlighting the potential economic fallout. A letter from Republican lawmakers urges a delay in the directive's implementation.

Policy Implications

Ultimately, citizens and politicians need to assert their influence over domestic policies, rather than allowing foreign bureaucrats to dictate the rules.