Canada / Europe partnership to see more personal care sales

By Michelle Yeomans

- Last updated on GMT

Canada / Europe partnership to see more personal care sales

Related tags Personal care International trade Cosmetics European union

Following the signing of an Economic and Trade Agreement pact with Europe, Canada is confident it will see more personal care industry sales as a result.

The Comprehensive Economic and Trade Agreement (CETA) will see duty reductions and the prospect of regulatory harmonisation between Canada and the European Union.

Expected to enter into force by the end of 2015, the agreement will see all personal care product tariffs will be removed on both sides.

While the deal may be smaller in monetary terms, it is reported to cover more areas than the negotiations over the Transatlantic Trade and Investment Partnership between the US and EU.

According to the Canadian Cosmetic, Toiletry and Fragrance Association, Canada is a relatively small country with 33 million people, which has seen cosmetics and personal care producers relying on exports in order to produce enough to reach economies of scale to date. 

If this agreement can align EU and Canadian regulations, the pact could make it easier for manufacturers to bid for work and export.

No more tarrifs

While the EU does not impose any tariffs on most Canadian personal care products, CETA will eliminate the European duties still standing on products such as essential oils, which range between 2% and 7%.

This will include the 6.5% tariff imposed by Canada on EU cosmetics and will also erase the 6.5% duties that Canadian exporters of shaving preparations, as well as personal deodorants, have to pay for their products to enter the European markets.

The trade balance for cosmetic products is, at the moment, in favour of the EU, which last year exported €300m worth of essential oils, perfumery, cosmetics and toilet preparations (including shaving/aftershave products and personal deodorants) to Canada.

However, while Canada's overall trade growth in recent years has been less than stellar in sectors other than primary products, it has stepped up to become the world’s tenth-largest exporter of cosmetics, proving it's more than capable of dealing in natural resource exports.

Once all of the technical issues are ironed out, the agreement will have to be approved by the European Parliament and ratified by all of the 28 EU member countries before entering into force.

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