ILMA Compoundings May 2017 - 24

exporters "can better evaluate the price of its product to the
importing customer. It is very difficult for exporters to know
how competitive their pricing will be without knowing
import costs - including government duties and fees.
This tends to prevent U.S. manufacturers from attempting
to export to new markets because of the uncertainty," James
Eggenschwiler, director, Global Trade, of The Redstone
Group, said in an interview with Compoundings.
"We could determine the tariffs based on the HTS codes
and work from there. The most glaring exception is export to
Argentina. In that country the tariffs can change as often as
every two weeks, making it nearly impossible to have any stability," added Ron Powell, president of MorOil Technologies.
With transparency around import tariff costs and other
regulatory items, lubricant exporters can also gather information about other regional lubricant players who are
already in the same market and what the tariff rates are like
for those going into the market. "In this way, exporters are
able to determine what advantage they have and understand
the market forces they are facing," said Eggenschwiler.
The TFA benefits the importer as well. "It makes it easier
for the importer who may lack access to that same information and can be easily skeptical that an imported product
from a U.S. manufacturer can be competitively priced with
other products available in the market," he added.
Apart from procedures and duties, there are other nontariff measures that can delay and even hinder cross-border
trade. "Some participating markets could include visibility
to other regulatory requirements and procedures that are
not specifically rooted in importation. Regulations such as
GHS labeling requirements, transportation, taxes, licenses
and other regulatory requirements often impact the practical
costs associated with developing a new sales market," warned
Eggenschwiler. "These are typically encountered by the local

MAY 2017

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customer, but in many cases are virtually impossible for the
exporter to anticipate ahead of time or verify."
With little transparency on regulations, companies can
sometimes incur unexpected cost. Eggenschwiler described
how substantial cost was incurred by a lubricant additive
exporter because of its cargo being impounded in customs
in Asia because of a regulatory requirement of the importing
country. In the case of Europe, although there is conformity
in terms of information and regulations for the European
Union (EU) so that exporters do not have to deal with different regulations of individual member countries, "there are still
certain local regulations that are not available on the internet
- even for countries like Germany," said Eggenschwiler.
Currently, there is an issue with poison center registration
in Europe, with each member state having detailed regulations of its own and even within different states of the same
country like Germany. Poison centers are under the jurisdiction of the local state agency, which will require its own
data format, category or details that can be different from
another state. On the other hand, trade-related information
from countries in Latin America, such as Argentina and
Brazil, might not be easily searchable. "It may be difficult
to find, but if you spend the time to dig deeply, close to 70
percent of the information is available. This can be quite
costly and time-consuming, especially for smaller lubricant
companies," added Eggenschwiler.
The language used in these documents is another issue
lubricant exporters have to deal with. There is a culture gap
in language, in addition to the phrasing and dialect issues in
regions such as Asia, which "can be tricky for U.S. exporters," said Eggenschwiler.
Powell also pointed out an issue related to the technical
language of documents. "Perhaps the greatest challenge has

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ILMA Compoundings May 2017

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