The International Trade Commission voted 4 to 1 to impose duties on imports of Morocco’s valuable resource.
Rabat – The US International Trade Commission ruled in favor of establishing import duties on Moroccan phosphate on Thursday. The 4-1 decision brings to a close months of lobbying and speculation about the fate of Morocco’s most wanted export product.
US phosphate giant Mosaic, the largest US competitor to Moroccan phosphate, filed a complaint regarding state subsidies that allowed Morocco’s phosphate to be cheaper. Those claims did not take into account the different business cultures in both countries and did not count any of the societal contributions of Morocco’s OCP Group.
Now Moroccan imports will likely face taxes of roughly 20%, making phosphate-based fertilizers more expensive for US farmers. The decision will push fertilizer prices up to the benefit of Mosaic and its stock price.
US farmers will be the ones paying the price. Morocco’s phosphate exports are an in-demand commodity that will flourish regardless of US imports, yet for farmers there will be no option but to buy more expensive fertilizer, likely leading to higher food prices for consumers.
Mosaic expressed its delight about the Trade Commission’s decision. “Today’s decision upholds our belief that fair trade is the cornerstone of a healthy U.S. economy, and that American farmers will benefit from having a more competitive American fertilizer industry.”
Mosaic’s statement did not hide that the decision will benefit the American fertilizer industry, but left how farmers would benefit from this unspoken.
Moroccan phosphate giant OCP Group expressed its frustration with the ruling.
“This decision comes despite the arguments presented by the OCP group demonstrating that there is no basis for such duties,” OCP’s press release stated.
It added that the decision ignored “significant voices opposed to Mosaic’s petition from across American agriculture — distributors, associations and cooperatives — and elected officials in the Senate and House of Representatives.”
Thursday’s decision by the US International Trade Commission followed a move by the US Department of Commerce (DOC), which sided with Mosaic and recommended the imposition of duties on Moroccan and Russian phosphate.
The Trade Commission based the roughly 20% import duty on a DOC estimation that Moroccan phosphate benefits from undefined state subsidies that would amount to roughly one fifth of the total price.
According to the US “No On Farm Tax” movement,” the Trade Commission’s decision will cause a “massive spike” in US fertilizer prices at a difficult time for farmers amid the COVID-19 crisis. The group accuses Mosaic of trying to establish a domestic monopoly at the expense of local farmers and consumers.