Testimony of Francine Lamoriello, Executive Vice President, Global Strategies, Personal Care Products Council at US Trade Representative Hearing – Negotiating Objectives Regarding Modernization of NAFTA
Good Afternoon. On behalf of the U.S. Personal Care Products Council, I am pleased to be here today to discuss our industry’s objectives for the renegotiation of NAFTA.
The Personal Care Products Council is the leading national trade association representing the global cosmetic and personal care products industry. Founded in 1894, our more than 600 member companies manufacture, distribute, and supply the vast majority of finished personal care products marketed in the United States. Our members continually strive to uphold and surpass the most stringent regulatory and product integrity standards worldwide.
Over the past two decades, NAFTA has contributed significantly to the ability of our member companies to expand manufacturing and employment here at home, and to achieve scientific and technological innovations that benefit consumers worldwide.
International trade is a critical component to the success of our industry. In 2016, the U.S. personal care products industry exported over $12 billion to the world. And, more relevant to today’s discussion, our exports to Mexico and Canada made up over 30% of our global exports, reaching $3.7 billion.
The strong export performance of the U.S. cosmetic and personal care industry reflects preference and loyalty to our brands by consumers in North America and, indeed, around the world. And, in developing the exciting, innovative products that consumers love, our member companies must think globally: searching worldwide for ingredients that offer unique quality and performance characteristics; special designs and packaging that support the brand’s image and fashions of the day; and services, such as marketing and advertising, that allow us to promote our products on the ground. Canada and Mexico are not only important markets for U.S. products, but are also important sources of our products’ components and services.
Thus, our industry firmly supports free trade in North America. Preserving and expanding the benefits that our industry has already experienced under NAFTA will be critical in any future negotiation. NAFTA must remain a trilateral agreement. Customs benefits and rules of origin criteria and zero tariff rates for our products and raw materials must be retained, and our companies must be able to move our products efficiently throughout the North American region.
Beyond retaining the commercial and economic benefits already achieved, the U.S. cosmetic and personal care products industry supports an ambitious agenda for “NAFTA 2.0” that eliminates remaining trade and regulatory barriers and also sets additional commitments to international best regulatory practices.
In particular, the re-negotiation of NAFTA offers an opportunity to deepen the commitment of NAFTA partners to comprehensive regulatory convergence in the cosmetics sector.
The goal of comprehensive cosmetic regulatory convergence with Canada and Mexico would significantly reduce industry costs related to product formulation, marketing, labeling, and supply chain management; would avoid unnecessary duplication, and would facilitate market access and trade, especially for small and medium-sized companies. Consumers would enjoy access to a wider array of safe and effective products at more competitive prices, and regulators would be positioned to conserve resources for product categories that may pose greater risks to public health and safety.
We believe the goal of comprehensive cosmetics regulatory convergence throughout the NAFTA region can best be achieved by including in NAFTA 2.0 a sector-specific Annex that would confirm regulatory good practice for cosmetics products, allow for deeper regulatory convergence for the cosmetics sector in North America, and encourage the wider goal of global regulatory convergence.
A NAFTA Cosmetic Annex should include commitments to a risk-based regulatory approach that recognizes that cosmetic products pose minimal potential risk to human health and safety; Should eliminate burdensome registration and testing requirements that are not in keeping with international best practices; and, should align labeling requirements wherever possible, in particular with respect to ingredient labeling, which should be fully harmonized based on the International Nomenclature of Cosmetic Ingredients (INCI).
We have detailed these and other aspects of a NAFTA Cosmetics Annex in our written submission. I would like to point out that our objectives for a NAFTA Cosmetics Annex go beyond what was achieved in the TPP Agreement. In our view, the modern and robust regulatory systems already in place in the United States, Canada and Mexico should provide the basis for trust and confidence that will allow regulators to pursue broader and deeper alignment.
This will be particularly important in considering ways in which Canada and the United States can better align their regulatory practices for over- the-Counter (OTC)-type cosmetics (Mexico does not recognize this category of products).
U.S.-Canada trade in OTC products, such as sunscreens, antiperspirants, antiseptic cleansers and others, is very significant.
We believe that NAFTA should include commitments by the U.S. and Canada to take steps such as aligning requirements for good manufacturing practices; allowing for mutual acceptance of products compliance with either system’s requirements; eliminating redundant inspection procedures; and harmonizing recognized test methods.
Measures such as these would recognize the fundamentally similar regulatory approach already being followed for these products by the U.S. FDA and Health Canada, and would reduce administrative burdens and costs for the two regulators as well as for industry.
The U.S. Personal Care Products Council is working closely with our sister associations in Canada and Mexico to support the renegotiation of NAFTA, and we are in agreement on all of the objectives I’ve described.
In short, we believe strongly that an updated NAFTA can advance our goals of providing global consumers with safe, innovative products and expanding international trade and economic growth.
Once again, we appreciate this opportunity to present the views of our industry and would be pleased to respond to any questions.
Thank you.