ITC Sticks With Affirmative Injury Finding on Fertilizer After 2nd CIT Remand
The International Trade Commission last week stuck by its determination that the U.S. industry is materially injured by phosphate fertilizers from Morocco and Russia, issuing a remand predetermination at the Court of International Trade. Commissioner David Johanson dissented from the decision, incorporating his dissenting views he issued with the commission's initial injury finding and first remand decision (OCP S.A. v. United States, CIT Consol. # 21-00219).
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The commission issued the remand in response to the trade court's ruling that the ITC failed to support its conclusion that phosphate fertilizer inventories "could be reshipped from their original final destinations" (see 2504230007). In response to an initial remand order on this exact question, the ITC reopened the record, issued new questionnaires and continued to find that "domestic reshipment was possible."
Judge Stephen Vaden remanded this conclusion for a second time, also sending back the commission's findings of significant import volumes and price effects. Vaden, who has since left the court and was replaced in this case by Judge M. Miller Baker, said the record "raises serious questions about whether domestic producers were able and willing to supply consumers during the period of review." Instead of addressing this evidence, the ITC "talked past these issues" and said "domestic producers can reship inventories at whatever quantities are needed."
Vaden held that this conclusion "rests entirely on small-scale instances of reshipment that no reasonable observer would believe proves the existence of a reship-at-will capability."
On remand, the ITC stressed that "domestic producers did not represent that they were unable to serve the U.S. market from their substantial existing inventories or product that sat on barges, or that it was cost prohibitive to do so." It was the importers that said they couldn't serve the U.S. market from existing inventories or product that "sat on barges" and thus chose to import subject merchandise.
The commission said it "respectfully disagree[s]" with Vaden's "repeated characterization" that the ITC's reshipment finding "was central" to its prior injury determination. The ability of domestic producers to "reship inventories was only one factor, along with their excess capacity, substantial inventories, extensive inventory locations, and expansive multi-modal distribution network, that the Commission discussed in finding that fertilizer was not practically unavailable from U.S. sources in 2019," the brief said.
The remand results then stressed that the ITC doesn't find that the record shows that "there was a domestic industry supply gap and, to the extent that there was a reduction in supply related to" petitioner The Mosaic Co.'s idling of one of its facilities, "the increase in volume of cumulated subject imports eclipsed any such reduction." The ITC said it also disagrees with Vaden's conclusion that questionnaire responses "suggest that domestic producers were unable to relocate their phosphate fertilizer inventories to meet new market demand."
The commission's remand then went on to discuss the court's holding regarding the volume and price effects findings, ultimately sticking with the conclusion that significant volume and price effects flow from the imports.