Interest Grows in Lobbying in European Union

There is a perception that lobbying in the EU is a difficult process to impact and navigate. That’s what I heard recently while I was speaking at the British Embassy on a panel hosted by Dods about lobbying differences between the EU and the United States. I see it differently. Although lobbying in the EU is a more bureaucratic process, it does not involve the tricky political steps that are required in the U.S. In fact, the EU relative to other regions is quite transparent when it comes to regulating trade and investment.

Since Britain hosted the event, I pointed out that in terms of regulatory restrictions, the UK is the most welcoming environment for investors with few investment gates, no formal national security review, and few limits on ownership. However, the UK delegates most anti-trust mergers to the EU, where compliance is enforced by the European Commission.

The Commission operates in what is ultimately a political context, which is why the first step on the roadmap to an approval process starts with access to members of parliament and key governmental officials. The key is to go in early with sound arguments based on substance and, in the case of a transaction, get in before any deal is announced. These meetings are a chance to appropriately soft sound and pre-condition decision makers on the company’s general interest investing in the EU. This education process will help nurse the evaluation of any transaction or investment through the Commission once the details become known.

If merger or transaction strategy dictates going political, then a country champion can help facilitate a deal’s movement through the Commission. This country-champion strategy is usually only employed when a deal is in some trouble and, unfortunately, not all countries are equal, with Germany carrying the most political clout. If this is the case, then a political risk assessment should be enacted and a plan put in place to mitigate any fall out.

When navigating the regulatory approval process, the EU and the U.S. both see themselves as standard setters in progressive regulation. The EU wants to be seen as a standard setter in health and safety, and the U.S. wants to be seen as a standard setter in corruption, tax and anti-bribery regulation. Differences in approach between the two governments are especially apparent when it comes to food, product and environmental safety. The EU uses the precautionary principle, and the U.S. is more likely to rely on, what it calls, the “sound science” model.

The mostly U.S. audience at the panel was surprised by my view that the U.S. is actually more complicated than the EU, because of the tendency to politicize so many issues. Many opposition groups are well financed in the U.S., to a degree not seen in the EU, and governmental approval processes, like CFIUS, are very opaque. An interest group or governmental department in the U.S. could be intervening to oppose a transaction, and the lobbyists have to be very well informed in order to even know about it.
In the end, the panelists were all in agreement that the key to successful negotiating with the EU is a strategy that is open and transparent, with lobbyists approaching the situation from the government’s perspective with as much context-setting preparation as possible.

Knowing your audience and being transparent – sound strategies for both sides of the Atlantic and any communications environment.

Mike Coates is President and CEO of H+K Strategies Americas

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