There will be more than a hint of change, a bit of uncertainty, plus signs of global solidarity, when the Personal Care Products Council opens its annual meeting on Feb. 27 at The Breakers in Palm Beach, Fla.
Among the key questions are who will be the next commissioner of the U.S. Food and Drug Administration (Silicon Valley investor Jim O’Neill is a name that has surfaced in the press), the shift in regulatory battles from Washington, D.C., to the individual states and how to recapture the hard-won gains made earlier in negotiating multinational trade pacts, principally the 12-nation Trans-Pacific Partnership that has been scrapped, and NAFTA that has been earmarked for renegotiation.
The new administration of President Donald Trump figures strongly in most of these issues. He will not be in the meeting room — although his Mar-a-Lago weekend retreat is down the road from the hotel — but his influence is sure to be felt.
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A top-priority for Thia Breen, who is beginning her third and final year as PCPC chairman, is passage of the personal-care safety bill first proposed by Sen. Dianne Feinstein (D., Calif.) and Sen. Susan Collins (R., Maine) in 2015. While proposing to modernize oversight of cosmetics safety, the bill contains a key aspect, what Breen calls “national preemption.” It is a method of creating a single enforcement code covering all 50 states. PCPC has been pushing for such blanket protection for years and in its 2017 legislative priorities it describes “national program uniformity” as such — “Preempt state and local laws that would duplicate new authorities in FDA regulation of cosmetics; Preempt state and local laws for all cosmetics ingredients based on human health concerns if FDA has reviewed the ingredient’s safety or has been presented with a safety review of the ingredient by the Cosmetic Ingredient Review Expert Panel and, after a period for FDA review, has not rejected the CIR safety finding.”
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Breen, group president of North America at Estée Lauder Cos. Inc., noted, “We would not have all the states being able to come up with all of these bills,” Breen said. “It’s the burning platform that would be just so great for the industry if that could happen.” She added the organization has managed to achieve cohesion with “the whole membership, the executive committee. We have spent a lot of time on this, but that would be a major, major accomplishment.”
Lezlee Westine, president and chief executive officer of PCPC, asserted, “there is a decent chance that this would actually move in the next couple of months on some of these must-pass pieces of legislation. We are now unified as a membership. Everyone is very optimistic of moving this forward.”
Feinstein is rewriting the bill now. When it was first proposed, the bill was backed by PCPC — plus corporations such as Johnson & Johnson, Estée Lauder, Unilever and L’Oréal, in addition to consumer watchdog groups like the Environmental Working Group.
The PCPC agenda also backs giving the FDA authority to order product safety recalls, if a manufacturer refuses to pull back products that may cause harm.
The bone of contention over state versus federal authority is not new and has been growing, particularly with this new administration’s tilt toward states’ rights. Westine was careful to point out that Trump “has brought in a lot of pro-business folks” and “in order to move anything in D.C. you really should work in a bipartisan way.” But she also noted that under Trump, “a lot of activity that was taking place in D.C. is going to move over to the states and locally. So we are going to have a really deep conversation about what that means.”
In other words, PCPC has been beefing up its state operation, with moves like hiring independent lobbying strategist Darius Anderson from California and Emily Giske in New York. “We are operating with about 17 states,” Westine said, speculating that industry critics, NGO’s and consumer watchdog group, have switched tactics from pursuing their agendas in Washington to focusing on the state level.
Westine said PCPC “stopped or modified “ 300 pieces of “anti-cosmetic” legislation in the states.
State politics are important to an industry that does $60 billion in sales nationally. But the membership is just as sensitive to what’s happening in the rest of the world, where sales total $260 billion.
And the global scene is being equally affected. “The biggest issue that we’re facing is nations, starting with the U.S., taking a different look at what should or could be accomplished through trade agreements,” said Francine Lamoriello, executive vice president of global strategies at PCPC. “With the Trump administration we had a pretty dramatic change in terms of abandoning the Trans-Pacific Partnership and to re-negotiate NAFTA.” She added that other countries are looking into regional agreements, “with or without the U.S.”, to see what can be gained. As for the U.S., “our industry is highly dependent on trade and trade agreements.” Lamoriello observed that these sweeping trade deals are not only useful in easing tariffs and other trade barriers, but can be useful in harmonizing regulations, product registration and labeling issues. So now the task is to wring out the same concessions through the preferred bilateral agreements. “The goal is the same — to try to do everything we can and to promote the access our companies have to foreign markets,” she said.
Lamoriello appears to have an open mind, while questioning how easy it will be to deal with a smaller number of countries, than through the cosmetics annex of the 12-nation TPP. A smaller group of countries at the negotiating table means less market heft to work deals. There’s talk about deals with Japan and the U.K. “It is going to be very intensive work,” she said.
In recent years, PCPC has developed a more global reach, forming alliances with other trade associations around the world. Executives point with pride to the degree of global harmonization that has been achieved so far. A total of 15 foreign organizations will be at the Palm Beach meeting, Lamoriello pointed out.
In addition, countries that remain committed to TPP will be meeting in Chile without the U.S. The American firms can perhaps work through a trade annex created by others to achieve goals, such as pushing back trade barriers, that benefit the global industry as a whole. “We have to do our part to educate the administration, the newcomers, about how much our industry is relying on trade and the importance of regulatory alignment and regulatory cooperation so they will understand that it is not so much about tariffs. It is really about regulations.”