The TPP, Beauty’s Little Secret

By Amrietha Nellan

As we near the end of women’s history month, it seems only appropriate to highlight an industry that has historically been a “magnet for female achievement”-- the cosmetics industry. It is a place where female corporate executives rose to prominence and many more women found gainful employment securing their economic independence. The U.S. has been and continues to be fertile ground for women in cosmetics, as home to trailblazing women of the past like Elizabeth Arden and Estee Lauder, to Leslie Blodgett (Bare Escentuals) and Jean and Jane Ford (Benefit Cosmetics) of today. However, the future of the industry in the U.S. requires a strong international export plan, and the current landscape of high tariffs and regulatory barriers on cosmetics have kept U.S. exports low. The Trans-Pacific Partnership (TPP) is the first trade agreement that tackles those issues in detail, setting the foundation for future growth of the U.S. beauty business.

The TPP will drive growth of cosmetics exports by cutting tariffs on U.S. products to all 11 partner countries, making U.S. cosmetics more competitive in vital markets. Under the TPP, Japan will cut tariffs for the first time. Giving U.S. companies expanded access to the fourth largest consumer market for personal care and cosmetic products in the world and the gateway to the larger Asian market. Furthermore, the TPP includes four additional countries the U.S. does not have existing free trade agreements where tariffs on U.S. cosmetics can be as high as 30%. The TPP’s tariff cuts will result in significant price reductions, leveling the playing field for U.S. products in these markets where U.S. brands are highly sought after.  

And in an unprecedented step forward for the beauty businesses, the TPP includes a Cosmetics Annex addressing specific regulatory challenges for the industry. The beauty industry is particularly plagued with excessive and contradictory certification requirements that make it prohibitively expensive for smaller companies to export. For example, to export to Chile a company must spend “hundreds of dollars per product to prepare and submit for processing” even if they have already passed similar testing in the U.S. The TPP will change this by unifying standards and testing requirements (coalescing around the highest standard such as banning animal testing requirements) and requiring accessible, clear guidelines for compliance so that exporters can easily meet those requirements. So with the TPP, U.S. exporters will no longer have to incur redundant costs when entering Chile and other TPP markets.

These changes result in significant savings and streamlines the process helping small and large beauty companies access the gains from trade. These economic gains abroad ultimately become economic opportunity at home for an industry that hires more women and minorities at all levels of employment. And as the U.S. cosmetics industry remains a strong ally for female achievement today, the TPP will play an important part in continuing this legacy into the future.