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Imagining global regulatory compatibility

  • July 4, 2018

‘Imagine there’s no countries’ John Lennon famously sang, ‘it isn’t hard to do. Nothing to kill or die for, and absolutely no need to promote international regulatory compatibility’.  Ok, you may have spotted that I have adapted the lyrics very slightly in the second line. But in a world of universal government, a philosophical ideal since ancient times, presumably we would all have the same regulations (as well as no wars of course).

As the Brexit saga has shown, regulation is closely tied to national sovereignty. The EU requires Member States to give up a bit of sovereignty to, among other things, harmonise regulation. Most trade agreements involve such sovereignty/harmonisation give and take. The EU is the world’s most sophisticated trade agreement.

In some ways, trade agreements are becoming trickier to negotiate, because once tariffs are reduced (relatively, the easy part), governments have much more difficulty changing regulations (which is one reason why we have the European Court). The activists who painted ‘No to TTIP!’ on Belgian motorway bridges weren’t worried about tariffs. They were worried about ‘surrendering’, as they would put it, national or EU regulations. Remember the threats of hormone treated US beef, chlorinated chicken, and privatised health care?  John Lennon would have no doubt sympathised.  

In one way, regulatory diversity is a good thing. Different regulations are ongoing experiments in what works and what doesn’t.  If we are open to evidence, we can see from other jurisdictions the effects of different approaches. So in our sector, if you happen to be concerned about UV filters, you can look at the liberal approach of the EU which closely, but flexibly, regulates sunscreens; or the US, which treats sunscreens as over the counter medicines, making new approvals very costly and complex (there has not been a new approval for years). In this case, more highly developed sunscreen technology is available in the EU than the US. Take your pick. (Note to anti globalisers: not all US regulations are less restrictive than European ones).

But regulatory diversity is a pain if you are an exporter, particularly an SME. You need to invest heavily in understanding a target country regulation, and still more in adapting your products. You might not be able to get access at all, as with sunscreens in the US.  As a rule, the more closely aligned regulations are, the easier it will be for exporters and importers. Too much diversity is the enemy of trade.

Diversity also struggles to cope with the frontier-busting growth of ecommerce, where it is often far from clear which rules (if any) apply. In China, where cosmetics regulation is quite restrictive, online purchase of products which comply with the regulations of other jurisdictions continues to grow rapidly (so far, the Chinese authorities have tolerated this).

From the EU perspective, we would prefer countries to follow key elements of our model, such as in market control of products rather than pre-approval. Some countries, including major markets such as India, are moving tentatively in that direction.

It is perhaps too much to expect (or imagine?) global regulatory convergence in toto.  But we can help to make things easier within a framework of differing regulation. For example, while some countries may have a preapproval process for cosmetics, and some in-market control, the technical information provided to support the safety profile of the product could be very closely aligned without too much offence to national prerogatives. This is not convergence, but it is what we mean by ‘compatibility’.

Sometimes even where regulations in different countries are outwardly similar, interpretation and application may differ, perhaps due to cultural and historical factors. Again the idea of regulatory compatibility can be helpful in these cases, because we can work to address differences without requiring that legislation itself be rewritten.

This month sees the annual meeting of ICCR, the International Cooperation on Cosmetics Regulation, in Tokyo. ICCR is where regulators from the EU, US, Canada, Brazil and Japan (supported by a growing number of observers from countries as diverse as Saudi Arabia and Colombia) come together to discuss current issues and exchange best practice. It is not a trade forum, but it is a way for the major regions to keep abreast of key regulatory developments in our industry, and ultimately to work towards compatibility. Our industry works closely with the regulators to support the process.

But industry is also taking the initiative. We are increasingly proactive in working together to set up global voluntary guidelines for use within our own industry. And Cosmetics Europe has developed a Tool Kit,[1] which identifies areas of wide divergence and promotes international best practices. It addresses such issues as product safety, labelling, claims, and roles and responsibilities on the market. The aim is of course to encourage and facilitate compatibility.

You may say I am a Dreamer, as the song goes, but developing pragmatic, partnership-based solutions like greater regulatory compatibility, which give a triple win for governments, industry and consumers, amounts in these difficult times to an ideal.

John Chave, Director General, Cosmetics Europe

[1] Cosmetics Europe Tool Kit for Promotion of Best Regulatory Practices at The International Level

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