Morocco – US: Protectionism rising, as US company accuses OCP of unfair competition
The Biden administration has confirmed that it wants to tax Moroccan fertiliser imports, but the pan-African giant OCP is still hoping to avoid the worst. Its rival, Mosaic, accuse the Moroccan company of selling subsidised fertiliser.
It is not yet the end, however the affair is nearing its end. The US Department of Commerce (USDC) issued its final ruling on 9 February in a crucial case for Moroccan phosphate giant OCP.
A double lawsuit
The USDC decided to impose a tax on Moroccan fertiliser imports into the US, ruling in favour of OCP’s US competitor, the Mosaic group. Mosaic, which accuses OCP of selling “subsidised” products, filed a double lawsuit before the USDC and the US International Trade Commission for unfair competition in June 2020.
The required tax rate against OCP is 19.97%, slightly lower than the 23.46% announced at the end of the preliminary investigation.
This is less than that sought against EuroChem (47.05%) but more than PhosAgro (9.19%), two Russian groups also targeted by Mosaic, which claimed a fee of over 70%.
Remaining a “reliable” partner to US farmers
Taking note of the decision but continuing to reject the charges against him, the group led by Mostafa Terrab recalled that taxation will only go into effect if the US International Trade Commission confirms the existence of injury to US industry. The panel, which ruled in favour of taxation after the preliminary investigation, is due to issue its final decision on 25 March.
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“OCP continues to cooperate with US agencies and is determined to remain a reliable partner to US farmers,” said the Moroccan giant. Unsurprisingly, its competitor Mosaic welcomed the US Department of Agriculture’s decision, stressing that if the tax is introduced that it would apply for at least five years.
That is enough time to reshuffle the cards on the strategic US fertilizer market. In 2019, according to the rating agency Fitch, Morocco was the leading exporter of MAP and DAP [main phosphate fertilizers] to the US, accounting for 60% of imports, followed by Russia with 25%.