On Remand, ITC Sticks With Injury Finding on Moroccan Phosphate Fertilizer

New questionnaire responses showed it was a common domestic practice to reship surplus merchandise accidentally ordered to flooded markets, the International Trade Commission said as it continued to find on remand that Moroccan and Russian phosphate fertilizer had depressed U.S. fertilizer prices and harmed U.S. industry (OCP v. U.S., CIT Consol. # 21-00219).

Morocco's sole phosphate fertilizer exporter, OCP, had argued before the Court of International Trade that it and consolidated plaintiff EuroChem, a Russian exporter, along with other Russian producers, had not caused the jump in imported fertilizers appearing in U.S. markets. Rather, domestic fertilizer suppliers had experienced slowdowns in production, causing U.S. fertilizer purchasers to order more foreign products. Then, an unexpected drop in demand due in part to flooding along the Mississippi River meant that those imports were suddenly largely surplus to the U.S. market’s needs, the exporter said.

In its initial ruling, ITC responded that the foreign exporters could have reshipped their surplus products elsewhere, and that their failure to do so showed that they themselves had caused the injury.

CIT, however, held that ITC’s hypothesis lacked evidence, agreeing with OCP that reshipment would have been too difficult and costly to be reasonable (see 2309190060). The commission’s initial ruling, it said, “rests like an inverted pyramid on an unsupported finding regarding what might be possible if economics did not matter.”

After the remand, the commission issued “short supplemental questionnaires” to U.S. producers and importers, permitting all parties to comment on any new factual information the questionnaires revealed. In its new results, ITC continued its earlier finding, saying responses to those questionnaires showed reshipment was actually a common domestic practice.

“We clarify that this observation was not central to our material injury analysis,” it added.

It repeated its analysis that OCP and Russian exporters had flooded U.S. markets, finding the drop in demand and the shuttering of several domestic producers’ fertilizer factories were not enough to account for the surge of their products stateside.