Cologne newspaper divides country (9)
I believe the answer is:
fragrance
'cologne' is the definition.
'newspaper divides country' is the wordplay.
'newspaper' becomes 'rag' (rag is a kind of newspaper).
'divides' means one lot of letters goes inside another.
'country' becomes 'france' (France is an example**).
'rag' inserted within 'france' is 'FRAGRANCE'.
(Other definitions for fragrance that I've seen before include "that may be bottled up" , "Cologne, perhaps" , "Perfume" , "Pleasant aroma as of flower" , "Sweet smell" .)