Answering Criticism for Relying on Trade Pub, ITC Says It Can Weigh Evidence As It Chooses

Importers’ and exporters’ criticism of a continued injury finding on remand, including one argument that the International Trade Commission had relied on trade publications instead of the exporters’ own questionnaire responses (see 2403040049), was simply their unlawful attempt to have the commission “reweigh” the evidence to reach their own preferred result, the ITC said April 29 (OCP S.A. v. U.S., CIT Consol. # 21-00219).

In its own comments on its remand determination, the ITC defended its continued affirmative finding that phosphate fertilizer from Russia and Morocco was injuriously dumped by exporters OCP and Eurochem North American amid a series of supply chain disruptions in 2019 -- the shuttering of a domestic producer’s factory that seemingly indicated a greater need for fertilizer imports, then floods that unexpectedly reduced domestic demand.

The commission initially argued that the exporters could have prevented oversupply by reshipping unwanted products elsewhere; on remand, it found that domestic producers themselves could have recirculated their excess product, rendering additional imports unnecessary. In turn, importers PhosAgro and Koch contested the ITC’s focus on possible product reshipment; they particularly pointed out that the ITC ignored their own questionnaire evidence that such reshipment was rare, instead using less credible trade publications to reach its determination.

But it was reasonable for the ITC to conclude that domestic phosphate fertilizer producers could have reshipped excess product to cover gaps in the supply chain, the commission said.

“Neither the court cases nor Commission opinions cited by plaintiffs support the proposition that Commission must assign decisive weight to certain pieces of evidence in these investigations,” it said.

It said that the ITC doesn’t have “any sort of ‘practice’” in deciding which sources it finds to be more reliable than others. Each case is different, so the commission “does not, and could not,” develop such a practice, it said.

And it defended its use of the publications, saying it viewed them as “corroborating the undisputed facts discussed above: that prices in the U.S. phosphate fertilizer market are highly transparent, with multiple market participants specifically reporting their reliance upon these publications in setting or negotiating prices, including a majority of purchasers.”

“PhosAgro does not -- indeed it cannot -- refute these findings on the important role of trade publications in the market,” defendant-intervenor The J.R. Simplot Company agreed in its own comments on the remand.

Plaintiffs, it claimed, “ignore[d] the important role that trade publications play in the U.S. phosphate fertilizer market.”

The commission also took issue with the picture of the supply situation painted by the plaintiffs. It denied that domestic supply issues were as widespread as they claimed, arguing that the shuttering of a factory owned by The Mosaic Company, a domestic producer and petitioner, had reduced fertilizer availability by “considerably less” than the 700,000 short tons the producer had initially estimated. But, it said, imports increased drastically -- by more than a million short tons.

And other record evidence showed that those imports were sold at “low prices” that exerted a downward pressure on domestic sales prices, the ITC said. Evidence from four purchasers that purchased 733,895 short tons of subject imports, and testified “that the lower price of subject imports was a primary reason for doing so,” supported ITC’s finding that the domestic industry lost sales to exporter underselling.

Other factors plaintiffs put forward to explain their pricing, such as global prices and U.S. demand, weren’t enough to negate this depressive price effect, the commission said. And, it noted, other countries' markets also were impacted by Russian and Moroccan phosphate fertilizer imports around the same period.

The importers and exporters had argued that they actually, overall, oversold their products. However, the language of the relevant statute “nowhere suggests that predominant overselling by subject imports precludes a finding of price depression,” the ITC said.

Mosaic, a defendant-intervenor in the case, supported the ITC’s claims in its own brief. It also pushed back on exporters’ argument that a Mosaic employee had claimed in 2018 that the shuttering of the producer’s factory would remove 1.5 million [short] tonnes from the U.S. market.

“What Mr. Rahm actually said was that, ‘in the context of what’s going on in the global phosphate market;’ i.e., not the U.S. market, ‘the closure of Plant City [] takes another 1.7 million -- or 1.5 million tonnes out of the equation...,’” Mosaic said. “OCP credits Mr. Rahm’s second estimation (1.5 million tonnes or 1.65 million ST), but in fact both figures were incorrect.”

It added that, as a domestic producer, it had substantial capacity to recirculate its excess products.

The ITC also dismissed the exporters’ claim that they hadn’t had the time to avoid oversupplying the market when fertilizer demand suddenly dropped.

“Plaintiffs’ claim that subject imports could not be stopped from entering the U.S. market is contradicted by the fact that they did abruptly withdraw from the U.S. market when the petitions were filed,” it said.