Trans-Pacific Partnership Lives: US Out, But Cosmetics Annex Still In

Eleven countries have salvaged and rebranded the international trade deal abandoned by President Donald Trump in early 2017, with a signing ceremony slated for March 8 in Chile. The CPTPP retains much of the original TPP, including a cosmetics annex to promote harmonization around regulatory best practices

The US is no longer party to the Trans-Pacific Partnership, but its cosmetics industry still stands to benefit, according to the Personal Care Products Council's Francine Lamoriello, executive VP for global strategies.

"The important thing is that the excellent cosmetics chapter is still included, so the other countries will take advantage of that and our industry [members] who are doing business around that region will see some really great changes in the regulatory systems and more free trade," Lamoriello said Feb. 26 at the trade association's annual meeting in Palm Beach, Fla. (Also see "PCPC’s Global Priorities: A Q&A With Executive VP Francine Lamoriello" - HBW Insight, 29 Sep, 2017.)

Now called the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), the deal goes beyond tariff cuts to promote labor and environmental standards, while jettisoning controversial intellectual property protections driven by the US in its involvement previously.

President Donald Trump made good on campaign promises in early 2017 by yanking the US from the original TPP, which had been a priority for the Obama Administration.

Prospects for the accord seemed bleak after that, given that the US accounted for 60% of the TPP's collective GDP and 40% of trade within the group.

The deal's seeming dissolution came as a blow to the US cosmetics industry specifically, following PCPC's extensive work with US trade reps to incorporate a cosmetics annex outlining regulatory best practices for harmonization purposes across member countries. (Also see "Trump’s TPP Withdrawal Dashes Hopes For Cosmetics Regulatory Alignment" - HBW Insight, 3 Feb, 2017.)

Despite the setback posed by US withdrawal, negotiations largely driven by Japan as it maneuvers to offset China's growing influence revived interest in the agreement as 2017 progressed, culminating in the revised and rebranded CPTPP in January 2018.

Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore and Vietnam now stand ready to sign the treaty March 8 in Chile. At least half of the parties then must ratify the instrument for it to enter into force.

PCPC has its eye out for other opportunities to fold cosmetics provisions into international trade pacts, with the North American Free Trade Agreement high on its list.

The cosmetics annex (8-D) can be found in Chapter 8 of the CPTPP, "Technical Barriers to Trade."

Harmonization is the prevailing theme, directing CPTPP parties to collaborate in the interest of aligning regulations, taking into account scientific or technical guidance documents developed through international initiatives.

The International Cooperation on Cosmetics Regulation – which includes CPTPP members Japan and Canada, along with the US, European Union and Brazil – could provide such resources. ICCR publications to date include reports on safety assessment, animal testing alternatives, preservatives, allergens, trace contaminants and nanotechnology, among others. (Also see "ICCR Aims To Establish Standards For Cosmetics Risk Assessment" - HBW Insight, 27 Mar, 2017.)

The CPTPP cosmetics annex also pushes a risk-based approach to cosmetics product regulation, an important feature in a global climate where precautionary, hazard-based mindsets are on the rise.

Further, the annex seeks to foster notification systems for new cosmetics – ideally voluntary ones, coupled with post-market surveillance – as opposed to frameworks requiring pre-market authorization.  

Those countries that insist on authorization are encouraged to administer their programs "in a timely, reasonable, objective, transparent and impartial manner" and to provide opportunity for appeals in instances where applications are denied.

Separate authorizations should not be required for product variants that differ only in terms of shades or fragrances, the annex notes.

There are also provisions against one-off labeling requirements, such as the mandatory inclusion of marketing authorization or notification numbers. If such idiosyncrasies can't be avoided, CPTPP members should allow manufacturers or suppliers to address them via relabeling or supplemental labeling after importation, the annex says.

It also holds that certificates of free sale should not be required as a condition of product marketing.

Mandatory animal testing is likewise discouraged "unless there is no validated alternative method available to assess safety." (Also see "Cosmetics Europe Addresses Calls For UN Global Animal-Testing Ban " - HBW Insight, 6 Mar, 2018.)

China, US Still Could Join

Notably, China did not take part in CPTPP negotiations, focusing instead on a more traditional accord under development with India, Southeast Asian nations and others with existing ties, including Australia, Japan, South Korea and New Zealand.

The parties say that deal, the Regional Comprehensive Economic Partnership (RCEP), is on track to be finalized by the end of the year.

Japan is hopeful that the CPTPP's signing will serve as a signal to China about the importance of global trade rules and potentially draw China's participation down the line.

The CPTPP is an open agreement with room for latecomers, and Britain, Thailand and South Korea are among those entertaining the idea of joining, according to reports. Even the US now may be rethinking its decision to pull out.  

China's notoriously burdensome and often opaque regulatory system likely could benefit from reforms sought by the CPTPP.

It's possible that China will get there on its own. Lamoriello noted at the annual meeting that PCPC remains optimistic about a comprehensive regulatory overhaul currently being explored by China.

PCPC and a covey of top company reps had constructive meetings with Chinese officials in fall 2017 to discuss potential changes in line with international best practices, and the group has been invited to expand its advocacy and educational work to the country's provinces in 2018, according to the exec.

Meanwhile, PCPC has its eye out for other opportunities to fold cosmetics provisions into international trade pacts, with the North American Free Trade Agreement high on its list.

Lamoriello noted, "I can't predict the outcome of NAFTA [talks], but I can predict that there will be a cosmetics chapter in whatever NAFTA agreement is finally reached, and that chapter will commit the three countries to good regulatory practices." (Also see "PCPC Pushing For North American Regulatory Alignment Under NAFTA 2.0" - HBW Insight, 4 Oct, 2017.)

Generally, "our goal is really to try to promote international best practices wherever we can, to promote cosmetics regulatory reform, and to really try to advocate one global voice and one global vision," she said.