[00:00:15] Speaker 04:
We will hear argument next in number 17-1520, Clearon Corp.

[00:00:38] Speaker 04:
versus United States.

[00:00:44] Speaker 04:
Ms.

[00:00:45] Speaker 04:
Saltzman, I assume you have one of the issues.

[00:00:48] Speaker 04:
Is that what all these complicated timing breakdowns are supposed to be telling me?

[00:00:53] Speaker 03:
Right.

[00:00:54] Speaker 03:
So I'll be speaking on behalf of the appellant, Kangtai, on the surrogate country methodology, while Ms.

[00:00:59] Speaker 03:
Clark will be discussing Norea and byproduct.

[00:01:02] Speaker 03:
So commerce has a three-step approach to selecting a surrogate country.

[00:01:07] Speaker 03:
And in China cases, the surrogate country is where all the pricing data is sought.

[00:01:12] Speaker 03:
And so it becomes one of the most critical

[00:01:14] Speaker 03:
decisions in a case is what the target country is.

[00:01:18] Speaker 03:
So the statute directs the department to rely on the best available information and also to the extent possible to rely on a country that's economically comparable and a significant producer.

[00:01:28] Speaker 03:
So from this, the department has developed this approach.

[00:01:31] Speaker 03:
They start first with economic comparability, and that narrows the list.

[00:01:35] Speaker 03:
And then they narrow it further with significant production.

[00:01:38] Speaker 03:
That narrows the list of countries.

[00:01:40] Speaker 03:
And then what remains, they look at data quality.

[00:01:43] Speaker 03:
That's the normal approach.

[00:01:44] Speaker 03:
However, the statute doesn't place more emphasis on economic comparability.

[00:01:49] Speaker 03:
This approach by the department does.

[00:01:51] Speaker 03:
And while we don't take issue.

[00:01:52] Speaker 06:
Well, you were about to say, I was going to ask you.

[00:01:55] Speaker 06:
You took issue with the serial nature of the Commerce's inquiry.

[00:01:59] Speaker 03:
Right.

[00:01:59] Speaker 06:
You don't take issue with that.

[00:02:00] Speaker 03:
No, we're not saying, I mean, the practicality, take that approach.

[00:02:03] Speaker 03:
I mean, the department needs to have a way that they normally address this.

[00:02:08] Speaker 03:
Our issue is that there has to be an exception.

[00:02:10] Speaker 03:
And the department says there should be an exception.

[00:02:12] Speaker 03:
And the courts have also addressed this, that since the statute doesn't view one of these as more important than the other, you should have all three of these criteria met in the surrogate country.

[00:02:21] Speaker 03:
So if approaching it this way is going to end up with a country that's not a significant producer or doesn't have the best quality of information, there needs to be an exception.

[00:02:31] Speaker 03:
And so that is what this case is about.

[00:02:34] Speaker 03:
Commerce's approach here, essentially, why they say this exception exists, the approach here is essentially a position in which

[00:02:42] Speaker 03:
that exception could never exist.

[00:02:45] Speaker 03:
So here we had India versus the Philippines.

[00:02:50] Speaker 03:
And the Philippines was lacking in chlorine and in hydrogen.

[00:02:54] Speaker 03:
And we also raised other issues with specificity, with the Philippine financial statements.

[00:03:00] Speaker 03:
There were major issues in the Philippines.

[00:03:02] Speaker 03:
And so our argument was, OK, this is the exception then.

[00:03:05] Speaker 03:
The department should have to consider India.

[00:03:08] Speaker 03:
We're not saying that this court needs to decide that India was the best, that there was enough lacking information in the Philippines.

[00:03:14] Speaker 03:
This needs to trigger that exception and the department needs to weigh both countries.

[00:03:19] Speaker 03:
And to the extent that the department did address India, they kept going back to the economic comparability.

[00:03:26] Speaker 03:
When they looked at the data quality, they said, well, those chemical inputs aren't as high quality because India is less economically comparable.

[00:03:33] Speaker 03:
So if that's what this analysis is, then it's conflating economic comparability

[00:03:38] Speaker 03:
with data quality, so then there could never be a country that's data quality could overcome economic comparability.

[00:03:44] Speaker 03:
It's a circle.

[00:03:46] Speaker 06:
And so that's the thing.

[00:03:47] Speaker 06:
It seems to me perhaps to be a bit of an overstatement, because you could have a country, let's say Liechtenstein, which doesn't produce any chemicals at all, has no factors of production.

[00:04:01] Speaker 06:
And clearly, it would seem to me in that case, Liechtenstein would be taken out of consideration.

[00:04:08] Speaker 06:
maybe India or some other country would be considered.

[00:04:11] Speaker 06:
In this case, isn't it the case that commerce didn't say that the economic comparability is the only real question, but they said instead that having passed economic comparability, and in the case of India having failed economic comparability, we will then look at whether there's

[00:04:32] Speaker 06:
whether the data is good enough.

[00:04:34] Speaker 06:
And they concluded that it was good enough, in the case of the Philippines, where you had 38 out of the 40 factors of production present in the Philippines.

[00:04:42] Speaker 06:
And you had what they considered to be not an enormous industry, but a substantial production.

[00:04:48] Speaker 03:
So one, that the standard isn't good enough, but the best available.

[00:04:52] Speaker 03:
And two, that one, India is not

[00:04:55] Speaker 03:
It doesn't not fit that first criteria.

[00:04:57] Speaker 03:
It is economically comparable.

[00:04:58] Speaker 03:
It's considered less so than the Philippines.

[00:05:00] Speaker 06:
So India doesn't not fill one of the criteria.

[00:05:03] Speaker 06:
The commerce has decided with the income band that using the per capita income has decided that there is a certain number of countries count as economically comparable.

[00:05:19] Speaker 06:
And you're not really fighting that as I read your brief.

[00:05:23] Speaker 03:
No, as we discussed, it's not the most reliable indicator.

[00:05:29] Speaker 03:
And so the fact that that's the most important thing we took issue with, but not the general process of the list.

[00:05:36] Speaker 06:
So once you start with the idea that India is off the list, then isn't it just a question of whether the Philippines has a convincing enough case to be made for it being the surrogate country, even if it is not

[00:05:52] Speaker 06:
necessarily the ideal surrogate country in the sense that it has all the factors of production.

[00:06:01] Speaker 06:
It has a huge industry and satisfies that anyone would think that it was sufficient to be the best possible country.

[00:06:13] Speaker 03:
I see I'm beyond my time.

[00:06:14] Speaker 03:
Can I still take a minute to address that question?

[00:06:17] Speaker 03:
Sure.

[00:06:18] Speaker 03:
We'd say, well, the Philippines

[00:06:20] Speaker 03:
is not, I mean, there could be, the Philippines is not a major chemical producer, which is another thing we element.

[00:06:25] Speaker 03:
It is lacking in some of the major raw materials.

[00:06:28] Speaker 03:
So as much as there may be other, it has some data for chemicals and things the department did rely on, it was lacking in major aspects.

[00:06:39] Speaker 03:
And the department prefers to rely on one country for the whole surrogate country, for one surrogate country because all of the surrogate

[00:06:47] Speaker 03:
values and are mixed with each other with the financials, they prefer to rely on one country and one that's a significant producer that has the highest quality for the most important inputs.

[00:06:56] Speaker 03:
And so if a country we have argued is not as comparable of a producer, it doesn't have the most important input for cong tai at least.

[00:07:04] Speaker 03:
It's financials.

[00:07:05] Speaker 03:
It only has one as opposed to five.

[00:07:07] Speaker 03:
It doesn't have a specific chemical inputs that

[00:07:13] Speaker 03:
This should be the situation the department does consider a country that's less economically comparable.

[00:07:18] Speaker 03:
The Philippines is not almost as good.

[00:07:23] Speaker 03:
It's a significant difference here.

[00:07:25] Speaker 03:
And the statute does not prefer economic comparability over the best available information.

[00:07:30] Speaker 03:
That's the best, not just usable.

[00:07:32] Speaker 03:
And they don't prefer it over a real significant producer.

[00:07:34] Speaker 03:
And India is a large chemical country that the department relied on for years.

[00:07:39] Speaker 03:
And that's why they have all of this high quality of information.

[00:07:42] Speaker 03:
And the department keeps happening over and over again.

[00:07:46] Speaker 03:
It's not just in this case.

[00:07:47] Speaker 03:
It's in other cases where the primary country that's on the list is missing major inputs, and the department won't consider a country outside of the list.

[00:07:55] Speaker 03:
They're sticking to this list even when we're coming up with data issues over and over again.

[00:08:00] Speaker 03:
And that's why the department has this exception.

[00:08:02] Speaker 03:
It's their own words.

[00:08:03] Speaker 03:
that surrogate countries that are not at the same level of economic development, but still at a level of economic development comparable, so India, are selected only to the extent that data considerations outweigh the difference in economic development.

[00:08:16] Speaker 03:
That's the department's words.

[00:08:17] Speaker 03:
They have this exception, but it never gets used.

[00:08:21] Speaker 03:
And so we're saying, like, when is it going to get used?

[00:08:23] Speaker 03:
Because we want an accurate margin that's based on a country that really fulfills the statutory obligations, the best available information, a real significant producer,

[00:08:33] Speaker 03:
And an economically comparable one.

[00:08:35] Speaker 04:
I think we should hear from you.

[00:08:36] Speaker 03:
Thank you.

[00:08:47] Speaker 01:
Thank you, Your Honors.

[00:08:49] Speaker 01:
I'm Peggy Clark on behalf of Arch Chemicals.

[00:08:51] Speaker 01:
As Ms.

[00:08:52] Speaker 01:
Salzman indicated, I'm going to talk about two of the very fact-specific issues, the choices of surrogate value for urea and the methodology used for two of the four byproduct offsets.

[00:09:03] Speaker 01:
With respect to urea, the issue is really whether it should have gone beyond the initial challenge.

[00:09:11] Speaker 01:
The Commerce, in its final results, found that there were two possible surrogate values.

[00:09:18] Speaker 01:
What is referred to as the BAS price, which is the Bureau of Agricultural Statistics price for retail sales of fertilizer.

[00:09:27] Speaker 01:
the import values for URIO.

[00:09:29] Speaker 04:
It is a major input.

[00:09:30] Speaker 04:
Let me just ask a question that maybe is more procedural.

[00:09:34] Speaker 04:
You said that the question is really whether it should have gone beyond the first proceeding.

[00:09:40] Speaker 04:
Is that really the question?

[00:09:42] Speaker 04:
That is that there may be two quite different questions.

[00:09:45] Speaker 04:
One is whether the CIT should have remanded on this issue the first time.

[00:09:53] Speaker 04:
And the second is whether the new decision

[00:09:57] Speaker 04:
is was properly upheld.

[00:10:01] Speaker 04:
Both of those things could be true and we really have only the second question here.

[00:10:06] Speaker 01:
That is correct and in fact there are both issues.

[00:10:10] Speaker 04:
No, no, I think I didn't speak clearly.

[00:10:13] Speaker 04:
We don't have the question whether the CIT acted erroneously in setting aside the initial decision on this ground of remanding.

[00:10:23] Speaker 04:
We have only the question whether the re-decision by

[00:10:27] Speaker 04:
commerce in the remand, which switched positions on this is now defensible.

[00:10:32] Speaker 04:
And on that question, don't we have, tell me why the following is wrong.

[00:10:38] Speaker 04:
The record as to urea in the Philippines is astonishingly thin.

[00:10:45] Speaker 04:
There's a tiny bit that's suggestive of each position.

[00:10:49] Speaker 04:
Why doesn't the government win?

[00:10:51] Speaker 01:
There is a small record.

[00:10:52] Speaker 01:
There is in fact, nothing suggestive of domestic production.

[00:10:57] Speaker 01:
In the brief that the government filed with this court, they, for the first time, psyched to some percentages to try to argue that 14% of production was domestic.

[00:11:14] Speaker 01:
At the CIT, they said 8%.

[00:11:17] Speaker 01:
But those numbers don't work.

[00:11:19] Speaker 01:
They relied on percentages.

[00:11:22] Speaker 01:
But in fact, in the record, where they pulled those percentages are the numbers.

[00:11:27] Speaker 01:
It says there was 1.7 million tons of fertilizer sold in the Philippines, of which 32% was urea.

[00:11:34] Speaker 01:
That's 535,000 tons.

[00:11:37] Speaker 01:
But there was 8.8 million imports of fertilizer, of which 30% was urea, or 2.6 million tons.

[00:11:46] Speaker 01:
In other words, there was far more imports of urea than there were sales of urea as fertilizer.

[00:11:53] Speaker 01:
And in fact, we're not talking fertilizer.

[00:11:55] Speaker 01:
We're talking chemical use.

[00:11:58] Speaker 01:
we're dealing with a fertilizer, what's called fertilizer.

[00:12:02] Speaker 01:
So if that's their support for why it's reasonable to infer that there was domestic production, why is it reasonable to infer that there was domestic production?

[00:12:14] Speaker 01:
They haven't cited anything.

[00:12:15] Speaker 01:
Their only citation is, well, there's no statement that says there was no domestic production.

[00:12:21] Speaker 01:
But there is a statement that says Urea is imported.

[00:12:25] Speaker 01:
Ammonium sulfate is both imported and produced domestically, and phosphatic fertilizers are produced domestically.

[00:12:32] Speaker 01:
All one sentence.

[00:12:33] Speaker 01:
If urea was produced domestically, wouldn't they have said it there?

[00:12:38] Speaker 01:
The rest of the evidence that discusses domestic production never mentions urea.

[00:12:42] Speaker 01:
Urea is only discussed in terms of imports.

[00:12:46] Speaker 01:
So there's no basis.

[00:12:47] Speaker 01:
You can't just conjecture that there might be urea production.

[00:12:53] Speaker 06:
This wasn't discussed in the briefs, and it may not be legally particularly pertinent, but just out of curiosity, what's the effect on the dumping margin from going from GTA to BAS?

[00:13:10] Speaker 01:
It is different for the two companies.

[00:13:12] Speaker 01:
I don't know exactly where it was for Tang time, but for Jahang, it was 20 percentage points of the margin.

[00:13:18] Speaker 01:
It went from 30 to 50.

[00:13:20] Speaker 06:
I see.

[00:13:23] Speaker 01:
You want to talk briefly about your second issue?

[00:13:26] Speaker 01:
Byproduct, yes.

[00:13:27] Speaker 01:
In the few seconds I have left.

[00:13:30] Speaker 01:
Here, again, commerce changed its methodology between the prelim and the final.

[00:13:34] Speaker 01:
Our issue and concern has been that commerce has never stated a reason supported with a rational relationship to the facts as to the justification for that.

[00:13:44] Speaker 04:
So, I mean, my understanding is this.

[00:13:46] Speaker 04:
They said,

[00:13:47] Speaker 04:
we're going to look at the product that the two byproducts make, namely the ammonium sulfate, rather than the two ingredients, the two byproducts coming out.

[00:13:59] Speaker 04:
And here's a rational reason, they said.

[00:14:03] Speaker 04:
The ammonium sulfate is sold for less than the sum of the two ingredients into that if we followed the old method.

[00:14:15] Speaker 04:
That cannot be.

[00:14:17] Speaker 04:
Why is that irrational?

[00:14:18] Speaker 01:
Because they have a capping methodology when that happens.

[00:14:21] Speaker 01:
They have a specific practice.

[00:14:23] Speaker 01:
When that happens, we cited four cases where they even call it their practice.

[00:14:27] Speaker 01:
And that is to base, if they're going to cap because a circuit value on a byproduct is too high, then they cap it based on the average of the input value, of the values that go into making that byproduct.

[00:14:40] Speaker 01:
They did not do that here.

[00:14:42] Speaker 01:
They've never explained why that cap was inappropriate and said they just said we don't have a practice.

[00:14:46] Speaker 06:
But if that cap had produced a number that was higher than the ultimate sale price of the ammonium sulfate, why wouldn't that capping process, the traditional capping process, be irrational?

[00:14:58] Speaker 01:
I see my time is up.

[00:14:59] Speaker 01:
May I answer that?

[00:15:03] Speaker 01:
Go ahead.

[00:15:03] Speaker 01:
As far as I know, and that is not what the record facts would have been, it would not have produced a number higher.

[00:15:10] Speaker 06:
Do you have an idea of what the number would have been?

[00:15:13] Speaker 06:
How much lower it would have been than the ammonium sulfate number?

[00:15:18] Speaker 01:
Once upon a time I did.

[00:15:19] Speaker 01:
I have to admit today I did not.

[00:15:21] Speaker 06:
All right.

[00:15:22] Speaker 01:
Thank you.

[00:15:37] Speaker 02:
May it please the court, appellants challenge commerce's decision on three issues, the selection of the Philippines as the primary surrogate country, the calculation of a byproduct offset, and the use of domestic prices for the surrogate value for Eurea.

[00:15:50] Speaker 02:
As set forth in the government's papers and as I will address further here, the Court of International Trade properly sustained commerce's results on these three issues and its decision should be affirmed.

[00:16:05] Speaker 02:
Turning first to the primary surrogate country issue, Appellant's broadest challenge to this issue is essentially an argument that commerce is required to make a comparison between countries on its list of economically comparable countries and countries that are not on that list.

[00:16:30] Speaker 02:
That position has been already squarely

[00:16:34] Speaker 02:
addressed by this court in the door best decision and rejected.

[00:16:42] Speaker 02:
In that case, the court said that the statute requires commerce to use data from economically comparable countries to the extent possible and it concluded that it would therefore be error for commerce to use data from another non-market economy country regardless of its economic comparability without any finding

[00:17:02] Speaker 02:
that data from the economically comparable countries were unavailable or otherwise unusable.

[00:17:07] Speaker 02:
So that issue has been resolved.

[00:17:10] Speaker 02:
And accordingly, all of the appellants brought a tax suggesting that there needs to be that sort of comparison should be rejected.

[00:17:19] Speaker 06:
Turning to their narrower challenges to this election of the surrogate country, they- What does commerce mean by unavailable or unusable, especially the latter?

[00:17:30] Speaker 06:
Does that mean that if

[00:17:33] Speaker 06:
Again, some country that has just the tiniest industry is much smaller, let's say, hypothetically than the Philippines industry in this case.

[00:17:42] Speaker 06:
Nonetheless, had some modicum of production that that would be usable and that therefore commerce would use that country if it was on the list in preference to a country that was off the list.

[00:17:55] Speaker 02:
Well, I'll answer that, Your Honor.

[00:17:57] Speaker 02:
But just to be clear, that language was from the court's decision.

[00:18:00] Speaker 02:
It wasn't from commerce.

[00:18:01] Speaker 06:
I thought that was picking up on commerce's position.

[00:18:03] Speaker 02:
But it does support commerce's position.

[00:18:08] Speaker 06:
Well, what is commerce's position, I guess, is what I'm asking.

[00:18:10] Speaker 02:
So in terms of what is, as I understand it, the court is asking about what it means to be a significant producer, essentially.

[00:18:20] Speaker 02:
And that's something that the parties have argued about.

[00:18:26] Speaker 02:
often refer to the fresh garlic case for that and the CIT, which talks about that's a case where the lower court used.

[00:18:36] Speaker 06:
Well, I understand.

[00:18:37] Speaker 06:
The CIT has some opinions on this.

[00:18:38] Speaker 06:
But I'm really asking about what commerce's position is.

[00:18:42] Speaker 06:
If commerce is looking at two countries, does it really say, well, this is usable?

[00:18:49] Speaker 06:
It's not unusable, and therefore we'll go with the country that has this tiny amount of production.

[00:18:54] Speaker 06:
Or does it have a different standard?

[00:18:57] Speaker 06:
What does commerce expect?

[00:18:59] Speaker 02:
Well, commerce has often pointed to other cases where it is just described significant to mean a noticeably or measurably large amount.

[00:19:12] Speaker 02:
I think that's the language that comes up in a case called

[00:19:17] Speaker 02:
Wanchan Kangtai versus United States.

[00:19:21] Speaker 02:
It's a CIT case.

[00:19:23] Speaker 02:
And so that is sort of a different position that we have put forward in comparison to the language that the court used in fresh garlic, which the court wasn't bound to.

[00:19:39] Speaker 02:
But it was saying that that was a potential way to define it, even in fresh garlic.

[00:19:46] Speaker 02:
I don't think the court meant to bind the government to that description.

[00:19:50] Speaker 02:
That was more... Can you clarify something?

[00:19:53] Speaker 04:
I think it was Ms.

[00:19:56] Speaker 04:
Saltzman who said something about the Philippines did not produce the most important or some of the most important ingredients in the subject merchandise here.

[00:20:14] Speaker 04:
Can you elaborate on that?

[00:20:18] Speaker 04:
And how does that relate to the 2 of 40, which I think was one of the figures?

[00:20:24] Speaker 04:
But then there was also mention, I think, from Ms.

[00:20:26] Speaker 04:
Salzman about a number of the financial factors not qualifying either.

[00:20:34] Speaker 04:
Can you take me it down from the legal?

[00:20:38] Speaker 02:
I hope I can keep track of all that, Your Honor, but I'll do my best.

[00:20:41] Speaker 04:
So I think that- Her argument today is,

[00:20:44] Speaker 04:
Not that crossing India off in general is bad, but that when the Philippines is sufficiently bad as a source of supposedly best available data, then you have to look back at India.

[00:21:01] Speaker 04:
Why or why not is the Philippines sufficiently bad as a source of the data in this case?

[00:21:08] Speaker 02:
Well, what they are referring to is the fact that commerce chose Indian data for two factors of production.

[00:21:14] Speaker 02:
chlorine and hydrogen.

[00:21:16] Speaker 02:
And Commerce explained in response to this argument that chlorinated isocyanurates require 40 factors of production and that it did not believe that having to turn to another country for two of the inputs, hydrogen and chlorine, was so critical as to warrant switching... So she used a phrase, something, she used the word important, I think, to describe the chlorine and

[00:21:44] Speaker 04:
Was it hydrogen?

[00:21:45] Speaker 04:
And hydrogen.

[00:21:47] Speaker 04:
Can you put a number on that?

[00:21:48] Speaker 04:
5%, namely 2 out of 40, that doesn't sound important.

[00:21:53] Speaker 04:
Is there something like those two factors of production account for 96% of the cost of production and the other 38 only remaining 4, or what?

[00:22:05] Speaker 02:
I certainly didn't hear that today, nor do I recall that sort of

[00:22:10] Speaker 02:
explanation being given in their brief, so if that were raised... Do you have an estimation separate from what you've seen in the brief?

[00:22:16] Speaker 07:
Do you, standing here, have an idea of how important those two elements are out of the 40?

[00:22:22] Speaker 02:
I am sorry.

[00:22:23] Speaker 06:
I don't have a sort of way to quantify that, but I... Well, at one point, commerce seemed to think they were important.

[00:22:30] Speaker 06:
I guess, the first time around.

[00:22:32] Speaker 06:
And then the second time around, Commerce said, well, not so much.

[00:22:36] Speaker 06:
We don't think they're important.

[00:22:38] Speaker 06:
But neither time did they really fill in much by way of why they thought they were either important or not important.

[00:22:49] Speaker 06:
Can you give us some help on that?

[00:22:51] Speaker 06:
What was it that made them think the second time around that they weren't really important?

[00:22:56] Speaker 02:
Your honor, I've seen the language that they point to, and it doesn't elaborate beyond the statement that Commerce at that time did seem to think that those were important factors and that that might be an issue.

[00:23:10] Speaker 06:
Was there anything in the record of that remand that would have led Commerce to think that they really had made a mistake the first time in thinking how important they were?

[00:23:18] Speaker 02:
No, I think commerce was very clear that ultimately it preferred to have quality data on 38 of the factors and that it thought that significantly outweighed having to take data from two countries for the other two factors.

[00:23:37] Speaker 02:
And it also explained that reliance on data from two countries is

[00:23:43] Speaker 02:
permitted by the statute, which allows commerce to select factors of production from one or more countries.

[00:23:50] Speaker 07:
It says that specifically in the statute, doesn't it, one or more countries?

[00:23:54] Speaker 02:
It does.

[00:23:54] Speaker 02:
That's at 19 U.S.C.

[00:23:55] Speaker 02:
1677 B.C.

[00:23:57] Speaker 02:
4.

[00:24:00] Speaker 04:
Can you turn to the other two issues quickly?

[00:24:05] Speaker 02:
Certainly, Your Honor.

[00:24:07] Speaker 04:
So on the by-product question, I think

[00:24:11] Speaker 04:
this comes down to even though you weren't going to, you could quite legitimately say, I'm not going to use the ammonia gas and the sulfuric acid directly.

[00:24:20] Speaker 04:
I can use the other thing because the price of the, of the ammonium sulfate was too high that you have some, something of a tradition of solving that problem through capping.

[00:24:33] Speaker 04:
And you haven't given a good reason for not using, for not following that tradition here.

[00:24:38] Speaker 02:
Right.

[00:24:39] Speaker 02:
Well, I mean, the parties view it differently as to whether commerce has a standard practice or not.

[00:24:44] Speaker 02:
We see us as having been doing record-based capping or record-based adjustments in the past where a value seems to be anomalous or off in some way.

[00:24:55] Speaker 02:
But regardless, commerce is permitted to change its practice if it gives an explanation of what it's doing.

[00:25:00] Speaker 02:
And commerce did explain here that it was making this adjustment because

[00:25:06] Speaker 02:
The value of the direct byproducts, ammonium sulfate and, I'm sorry, ammonia gas and sulfuric acid, were anomalously high compared to the final byproduct.

[00:25:23] Speaker 02:
If those values had been correct, they would have never used them to make the final product.

[00:25:26] Speaker 02:
They would have sold the direct byproduct instead, because it was worth far more under those surrogate values.

[00:25:32] Speaker 02:
So they decided these values must not make sense.

[00:25:36] Speaker 02:
So we'll use the value of the downstream byproduct instead.

[00:25:41] Speaker 02:
So that was one of their explanations.

[00:25:43] Speaker 04:
Their other explanation is that there was... Just to be clear about what's in my head, it seems to me that's an extremely good explanation for not directly valuing the ammonia gas and the sulfuric acid.

[00:25:54] Speaker 04:
But that doesn't yet say anything about how to choose between two different ways of solving the problem, capping or take the ammonium sulfate and subtract production costs.

[00:26:04] Speaker 04:
What did commerce say about that choice, not the threshold choice?

[00:26:08] Speaker 02:
Well, the capping that they refer to is, I'm not sure that it's a different methodology as the court's looking at it.

[00:26:22] Speaker 02:
In those cases, the court is doing things like saying, OK, the scrap byproduct is worth more than the initial input.

[00:26:31] Speaker 02:
That doesn't sound right.

[00:26:32] Speaker 02:
So instead, we're going to limit you to the value of the initial input.

[00:26:35] Speaker 02:
It's doing the same sort of thing that it's doing here.

[00:26:38] Speaker 02:
It's making a choice that it's going to limit the value to a certain other number that seems more sensible under the circumstances.

[00:26:49] Speaker 04:
And urea.

[00:26:50] Speaker 04:
What actual evidence is there that could reasonably support the finding that there was some urea production in the Philippines?

[00:27:00] Speaker 04:
in the relevant timing.

[00:27:02] Speaker 02:
Well, Commerce, as the court has noted, initially came down the other way on this issue.

[00:27:07] Speaker 02:
And it pointed to this document that said 92% of urea is imported.

[00:27:15] Speaker 02:
And it drew the conclusion from that that there was no domestic urea production.

[00:27:20] Speaker 02:
And the CIT said, that seems wrong.

[00:27:23] Speaker 02:
There's 8% there that you're not accounting for.

[00:27:26] Speaker 02:
And so Commerce recently went back and looked at that and realized that that was right.

[00:27:31] Speaker 02:
And it drew data from the record.

[00:27:33] Speaker 02:
And of course, Commerce doesn't make the record.

[00:27:36] Speaker 02:
It's the party's responsibility, as the CIT noted.

[00:27:39] Speaker 02:
But it looked at the evidence in the record.

[00:27:43] Speaker 02:
And it concluded that it should use these BAS numbers, the Bureau of Agricultural Statistics numbers, which it had decided in the past were specific to Eurea.

[00:27:55] Speaker 02:
Now, these numbers, somehow, the actual document is not in the appendix, but it is a public document that was submitted in the proceeding at the agency with a letter dated January 17, 2012.

[00:28:13] Speaker 02:
And it's very clear from that document that Commerce's earlier determination that it references that that data is at least specific to Eurea.

[00:28:24] Speaker 02:
The issue of domestic production.

[00:28:27] Speaker 02:
What document again is this?

[00:28:28] Speaker 02:
I'm sorry.

[00:28:29] Speaker 02:
It's a document that is not in our appendix, but it is discussed in the record.

[00:28:35] Speaker 06:
It's in the record?

[00:28:36] Speaker 06:
The document itself?

[00:28:37] Speaker 02:
It's in the record of the... Of the CIT or of the administrative record?

[00:28:41] Speaker 02:
It's in the record of the proceedings in front of the CIT.

[00:28:44] Speaker 02:
I'm sorry, in front of Commerce, but it's a public document submitted on January 17, 2012.

[00:28:50] Speaker 06:
And was that made part of the record before the CIT?

[00:28:53] Speaker 06:
the administrative record before the CIT?

[00:28:55] Speaker 02:
I believe so, Your Honor.

[00:28:59] Speaker 02:
And in any event, it's discussed that it's clear to the agency that URIA is part of the numbers in the BAS data.

[00:29:11] Speaker 02:
So that's one of the issues.

[00:29:12] Speaker 02:
Does that data actually include URIA?

[00:29:16] Speaker 02:
Commerce references its earlier determination that it did.

[00:29:19] Speaker 02:
And there's no question about that.

[00:29:21] Speaker 02:
The other issue is,

[00:29:22] Speaker 02:
the conclusions they're drawing about whether this data is domestic or imported.

[00:29:28] Speaker 02:
And as we went through in our briefs, you can draw conclusions from the articles to see that there is some domestic production of urea.

[00:29:39] Speaker 02:
It's not the best, clearest,

[00:29:50] Speaker 04:
You weren't going to say, not the best available evidence.

[00:29:53] Speaker 02:
No.

[00:29:54] Speaker 02:
I mean, it's not the easiest to discern from the articles in the record.

[00:29:59] Speaker 02:
But it is something that you can derive from that information to see that there is domestic production of urea.

[00:30:07] Speaker 02:
And so commerce made a reasonable determination to use these numbers.

[00:30:12] Speaker 02:
And of course, the issue is, could a reasonable mind decide that this was the best available data

[00:30:19] Speaker 02:
And the court properly concluded that it was.

[00:30:25] Speaker 04:
Thank you very much.

[00:30:30] Speaker 04:
Can you supply us the document you referred to?

[00:30:33] Speaker 02:
Absolutely.

[00:30:33] Speaker 02:
Should I file it?

[00:30:35] Speaker 04:
Yes, file it.

[00:30:47] Speaker 04:
You'll have five minutes instead of the three.

[00:30:50] Speaker 00:
Oh, thank you, Your Honors.

[00:30:53] Speaker 00:
First, most important factors.

[00:30:56] Speaker 00:
Hydrogen is a byproduct.

[00:30:58] Speaker 00:
It's not very important.

[00:30:59] Speaker 00:
In fact, it's very small.

[00:31:01] Speaker 00:
Chlorine, it differs between the two companies.

[00:31:04] Speaker 00:
Ji Hang, Ms.

[00:31:06] Speaker 00:
Clark's client, makes chlorine.

[00:31:09] Speaker 00:
They start with seawater.

[00:31:11] Speaker 00:
They have electrolyzers.

[00:31:13] Speaker 00:
So they don't buy very much chlorine.

[00:31:14] Speaker 00:
So it's a very small factor for them.

[00:31:16] Speaker 00:
It's a byproduct.

[00:31:19] Speaker 00:
buys chlorine, it's a big factor.

[00:31:23] Speaker 00:
It's probably publicly, right, the whole APO.

[00:31:28] Speaker 00:
So electricity is really big, urea is big, chlorine is big, caustic is a pretty big factor.

[00:31:34] Speaker 00:
Let's say top three, chlorine, I'm sure they can address it too.

[00:31:39] Speaker 00:
It's a chemical manufacturing process, so there's also overhead and other factors.

[00:31:44] Speaker 00:
So to answer your question, chlorine is a pretty big deal.

[00:31:49] Speaker 00:
In the end, though, commerce used India for chlorine, which is what they sought.

[00:31:54] Speaker 00:
Moreover, Philippines provided 38 of 40.

[00:32:01] Speaker 00:
India didn't provide that many values.

[00:32:04] Speaker 00:
They weren't on the record.

[00:32:05] Speaker 00:
So vis-a-vis the two, Philippines was a better choice.

[00:32:13] Speaker 00:
Next, Your Honor asked about capi.

[00:32:19] Speaker 00:
So interestingly, you went off on the issue of, is it rational that the downstream byproduct, ammonium sulfate, would be lower priced than the inputs?

[00:32:33] Speaker 00:
So remember, we're using surrogate values for these inputs.

[00:32:37] Speaker 00:
And one of the inputs is sulfuric acid.

[00:32:39] Speaker 00:
The other one is ammonia gas.

[00:32:41] Speaker 00:
There's not much of a global market for ammonia gas.

[00:32:44] Speaker 00:
It's dangerous.

[00:32:45] Speaker 00:
You have to ship it in containers.

[00:32:47] Speaker 00:
So the values we find when we look for these values for something like that are very high, like hydrogen.

[00:32:53] Speaker 00:
These things are normally piped in a chemical factory, not shipped internationally.

[00:33:00] Speaker 04:
Correct me if I have even framed this question incorrectly.

[00:33:06] Speaker 04:
My understanding was that commerce had a very good reason for not valuing the ammonia gas and the

[00:33:16] Speaker 04:
I'm sorry?

[00:33:17] Speaker 04:
Yes.

[00:33:17] Speaker 04:
And the sulfuric acid independently.

[00:33:20] Speaker 04:
But my understanding also was that that leaves two choices, some kind of capping choice.

[00:33:27] Speaker 04:
Forget about whether that's traditional or not.

[00:33:29] Speaker 04:
Some sort of capping choice and then the choice that my understanding is commerce made, which is look at the value of the actual market value, surrogate value of the ammonia sulfate, figure out how much it costs to produce it out of basically it's two ingredients.

[00:33:46] Speaker 04:
and subtract that and what's left is the answer to this.

[00:33:50] Speaker 04:
So what's the rationale for commerce having chosen between those two things, both of which are different from directly valuing the ammonia gas?

[00:34:03] Speaker 00:
So the ammonia gas and the sulfuric acid were not measured in the ordinary course by these companies.

[00:34:13] Speaker 00:
were not booked in their accounting records, the volume of production.

[00:34:17] Speaker 00:
What they did is they had pipes coming right off the CYA, the cyanuric acid production facility.

[00:34:23] Speaker 00:
And that went straight into the production of ammonium sulfate.

[00:34:27] Speaker 00:
And so they didn't know how much production they had.

[00:34:30] Speaker 05:
Well, but you could figure out how much there is by looking at how much ammonium sulfate there is.

[00:34:35] Speaker 00:
They did a chemical.

[00:34:36] Speaker 00:
They did a mole weight, molecular weight calculation and backed into it.

[00:34:40] Speaker 00:
But they didn't account for yield loss or anything.

[00:34:42] Speaker 00:
nor was it the product that was sold.

[00:34:45] Speaker 00:
So in accounting terms, what they were booking in their books and records was the product that was sold, ammonium sulfate.

[00:34:52] Speaker 00:
So commerce has two approaches to this.

[00:34:55] Speaker 00:
They can make the byproduct offset based on the volume of production of a byproduct that you roll back to the front end of your process and use to recycle in your process.

[00:35:07] Speaker 00:
Or you can make the byproduct deduction

[00:35:10] Speaker 00:
based on a byproduct that you sell.

[00:35:13] Speaker 00:
And so here, we had kind of a hybrid, right?

[00:35:16] Speaker 00:
We had a product that was produced, ammonia gas, sulfuric acid.

[00:35:21] Speaker 00:
And it was used to make, one step further, a product that was sold.

[00:35:25] Speaker 00:
So for a few administrative reviews, they used the production approach.

[00:35:31] Speaker 00:
We'll just take the quantity produced.

[00:35:33] Speaker 00:
Here, they focused on that.

[00:35:34] Speaker 00:
And they said, you know, we're using an estimate of what you produced based on this downstream product that you sold.

[00:35:40] Speaker 00:
And it also has these value problems.

[00:35:44] Speaker 00:
The values are upside down.

[00:35:46] Speaker 00:
So why don't we just use the product that you actually sell for which you have hard evidence and the actual data.

[00:35:52] Speaker 00:
And then we can assign a value.

[00:35:54] Speaker 00:
And that's what they did.

[00:35:55] Speaker 00:
And they explained that, I think, through two remands.

[00:36:00] Speaker 00:
They explained this repeatedly.

[00:36:02] Speaker 00:
The lower court was satisfied.

[00:36:03] Speaker 00:
And I think the record shows

[00:36:06] Speaker 04:
And quickly on the third subject, what is the best evidence for the proposition that there was some urea production in the Philippines in the relevant time?

[00:36:17] Speaker 00:
There were domestic prices.

[00:36:18] Speaker 00:
The BAS actually tracked and reported prices in the domestic market for urea.

[00:36:24] Speaker 00:
So the government agency tracked it.

[00:36:28] Speaker 06:
And that's a question that I had about what this BAS really means.

[00:36:33] Speaker 06:
Is that a reflection

[00:36:35] Speaker 06:
of only domestically produced urea, or as the BAS, does that include urea that may have been imported, but then is sold in the retail market in the Philippines?

[00:36:48] Speaker 06:
Correct.

[00:36:49] Speaker 00:
With which?

[00:36:50] Speaker 00:
It could very well be the latter, what you're saying.

[00:36:53] Speaker 06:
In that case, the fact that the BAS is reporting

[00:36:56] Speaker 06:
a market for urea doesn't tell us anything about whether there's any domestic production.

[00:37:00] Speaker 00:
No, but it is the domestic price.

[00:37:02] Speaker 00:
And commerce's preference is to use domestic prices versus import statistics.

[00:37:07] Speaker 06:
Right, but going one step back from that, I understand the argument about price.

[00:37:12] Speaker 06:
But in terms of establishing whether there's actually any domestic production of urea, the BAS tells us nothing.

[00:37:19] Speaker 06:
Is that correct?

[00:37:21] Speaker 00:
It tells us

[00:37:22] Speaker 00:
there's significant enough of a market for them to keep track of it and to report.

[00:37:26] Speaker 07:
But it just says there's a price.

[00:37:27] Speaker 07:
It just says there's a price.

[00:37:28] Speaker 07:
Whether it's imported or it's domestic, there's a price.

[00:37:32] Speaker 07:
But what's the data to show that, in fact, there's been domestic production?

[00:37:36] Speaker 00:
I don't think there needs to be domestic production.

[00:37:38] Speaker 00:
I guess that's what I'm wondering.

[00:37:39] Speaker 00:
Well, that's really your argument.

[00:37:41] Speaker 00:
Commerce's preference is for domestic prices versus import statistics.

[00:37:45] Speaker 00:
When import statistics are HDS categories, they cover goods and

[00:37:50] Speaker 00:
We don't know the quality.

[00:37:52] Speaker 00:
Is it chemical quality Urea or is it agricultural quality Urea?

[00:37:56] Speaker 00:
We don't know the solution strength or so forth.

[00:37:59] Speaker 00:
So commerce in general prefers to use domestic prices.

[00:38:04] Speaker 00:
Here they had two sources.

[00:38:05] Speaker 00:
And in fact, the numbers are not significantly far apart, although because Urea is important, it makes a big difference for her because Urea is very important to her process or a company's process by many other

[00:38:20] Speaker 06:
So what is the rationale behind saying, well, let's assume that we've got a, let's assume that the BAS is 100% imported urea.

[00:38:34] Speaker 06:
What's the rationale for using the domestic price as opposed to the import price since presumably someone who's

[00:38:44] Speaker 06:
in the Philippines is making the ultimate product is going to be buying it in the import market if the retail price is much higher.

[00:38:54] Speaker 00:
That's not the presumption, in fact.

[00:38:56] Speaker 00:
A purchaser in the domestic market would have to pay import duties, VAT, and so commerce prefers to use what they can best identify as a duty-free, tax-free domestic price.

[00:39:10] Speaker 00:
that would be paid by a domestic producer of comparable merchandise.

[00:39:14] Speaker 00:
So there's a company.

[00:39:15] Speaker 06:
So you're saying that the BAS is actually stripped out of duties and taxes, and that the GTA under-represents what a producer in the Philippines would actually pay for the area?

[00:39:36] Speaker 00:
No.

[00:39:37] Speaker 00:
A producer in the Philippines

[00:39:39] Speaker 00:
if they bought imports, would pay duties and taxes.

[00:39:43] Speaker 00:
If they bought in the domestic market, they would presumably also pay taxes.

[00:39:49] Speaker 00:
So the Commerce Department prefers to use a domestic price to reflect the market value to a domestic purchaser.

[00:39:58] Speaker 00:
Now, import values suffer from various problems.

[00:40:02] Speaker 00:
So Commerce has a preference that is reasonable that's not really been attacked.

[00:40:07] Speaker 00:
What's been attacked here is

[00:40:09] Speaker 00:
that evidence, which, as Your Honor said, is thin, tiny.

[00:40:17] Speaker 00:
And in the end, after two remands, on a close call, commerce decided the domestic price is the better one, and there's sufficient evidence for that.

[00:40:30] Speaker 00:
When you get down to it.

[00:40:31] Speaker 06:
So explaining to me what, what you said a moment ago, I think was that the import price, the, the, uh, GTA, uh, is that a GTA?

[00:40:43] Speaker 06:
Yeah.

[00:40:43] Speaker 06:
GTA price is really not representative of what a producer in the Philippines would actually pay for Urea.

[00:40:52] Speaker 06:
If they were, if they were saying, what's the cheapest price we can find for Urea.

[00:40:56] Speaker 06:
Somebody said the GTA price is X. They would say, Whoa.

[00:40:59] Speaker 06:
That's not accurately what we would have to pay.

[00:41:02] Speaker 06:
Is that what you're saying?

[00:41:03] Speaker 00:
So China doesn't just look at what's the cheapest price a domestic producer would pay.

[00:41:07] Speaker 00:
I think when India is the surrogate country, most of their imports are from China.

[00:41:13] Speaker 00:
So they assume sometimes import prices are themselves below market and are very low.

[00:41:20] Speaker 00:
And when they're trying to construct a fair market value, they're looking first at what is paid in the domestic market.

[00:41:27] Speaker 00:
from a source that is widely available, published, and represents a large national database.

[00:41:35] Speaker 00:
So it's reliable.

[00:41:37] Speaker 00:
When I was responding to you, it was your hypothetical that, well, 100% of the BAS data might have been imports, right?

[00:41:44] Speaker 00:
That was what you said.

[00:41:45] Speaker 00:
So I just took that and assumed it.

[00:41:48] Speaker 00:
Now, as I've circled back, I don't think, at the end,

[00:41:54] Speaker 00:
That can be assumed.

[00:41:56] Speaker 00:
That is the issue on which there's a tiny bit of evidence, right?

[00:41:59] Speaker 00:
So was it 100% or not?

[00:42:02] Speaker 00:
I don't think that can be assumed.

[00:42:03] Speaker 00:
In fact, my position in my papers is the opposite, because the Philippines government subsidized this industry.

[00:42:12] Speaker 00:
I think the domestic industry did grow up.

[00:42:15] Speaker 00:
I think the sites that have been made about imports are too old.

[00:42:21] Speaker 00:
The data go back to 1987.

[00:42:24] Speaker 00:
Certainly, given a published price that purports to be, from the Bureau of Agricultural Statistics of the government of the Philippines, the domestic price, I think that's a perfectly reliable data point for commerce to rely on.

[00:42:42] Speaker 04:
If the Philippines domestic industry was subsidized by the Philippine government, would that be a good price to use for current purposes?

[00:42:51] Speaker 00:
Well, they were subsidized to build

[00:42:54] Speaker 00:
the industry, the price they pay for their inputs, would it be a good price?

[00:43:02] Speaker 00:
So I like to call this dumping metaphysics.

[00:43:05] Speaker 00:
We're heavily into how distorted of a market can we have and still use that market.

[00:43:12] Speaker 00:
The preference in the Commerce Department and generally in this theory of non-market economy.

[00:43:18] Speaker 04:
We didn't have an argument here that

[00:43:21] Speaker 04:
that this particular surrogate price shouldn't be used because it was... No.

[00:43:26] Speaker 00:
The cycle of subsidies was that in 1987, the government was trying to promote the agriculture industry by building more fertilizer plants.

[00:43:35] Speaker 00:
And so it follows that there might later in 2011 be a reproduction.

[00:43:42] Speaker 04:
OK.

[00:43:42] Speaker 04:
I think we should move on.

[00:43:45] Speaker 00:
Very generous, Your Honor.

[00:43:47] Speaker 00:
Thank you very much.

[00:43:51] Speaker 00:
Thank you.

[00:44:00] Speaker 03:
I wasn't sure what rebuttal time would be given.

[00:44:03] Speaker 03:
I think, and this speaks both to our argument and to the issue with UREA to remember that the purpose of the non-market economy method, what it's supposed to be doing is determining what a Chinese manufacturer of chlorinated isocyanurides, what their production costs would be

[00:44:20] Speaker 03:
China was a market economy.

[00:44:22] Speaker 03:
So when we're looking for Urea, when we're looking at that producer, what would the producer most likely use?

[00:44:30] Speaker 03:
When we're speaking of the whole process of circuit country, we're like, what country would be most comparable to China?

[00:44:38] Speaker 03:
And to not stray away from that concept that China is this major industry, it has specific inputs.

[00:44:45] Speaker 03:
And that's what we're looking at in India.

[00:44:46] Speaker 03:
We're looking at this major chemical industry that's comparable to China.

[00:44:50] Speaker 03:
that has these specific inputs, that has chlorine available, has domestic chlorine.

[00:44:56] Speaker 03:
It has more specific inputs for other chemicals domestically available.

[00:45:01] Speaker 03:
It has multiple financial statements available.

[00:45:04] Speaker 03:
It's a much more comparable surrogate for China in this case.

[00:45:09] Speaker 03:
And those facts are on this record.

[00:45:11] Speaker 03:
And why we're not telling this court to direct the department to determine India should be selected, we're saying Philippines has enough issues.

[00:45:18] Speaker 03:
India needs to be

[00:45:20] Speaker 03:
compared and not compared just on its economic comparability, but really compared, this country has chlorine, this one doesn't.

[00:45:27] Speaker 03:
This product is chlorinated isocyanurates.

[00:45:29] Speaker 03:
Chlorine is our most important input and has driven the department's decision in surrogate countries multiple times.

[00:45:37] Speaker 03:
So that's the main thing that we're asking this court to consider is that this exception exists and the department should be following it.

[00:45:44] Speaker 03:
So in an ideal situation and most reviews,

[00:45:47] Speaker 03:
A country in the GNI band is a significant producer.

[00:45:50] Speaker 03:
They do have available quality of data.

[00:45:52] Speaker 03:
But in particular circumstances, like in this one, you're ending up in a country that's not as significant as a producer, and you're relying on a country that doesn't have the best available information.

[00:46:03] Speaker 03:
So following this threshold is resulting in results that don't fulfill the statutory requirements the way they should.

[00:46:12] Speaker 03:
And so we're asking this court to consider that this is a circumstance that fits that exception, and commerce needs to follow it, because this keeps happening over and over again in cases that the department's resulting in a country that happens to be on this list, but is not providing the best information.

[00:46:27] Speaker 04:
It's not complete happenstance that it's on the list, right?

[00:46:31] Speaker 04:
I mean, the sequenced process of deciding every so often who should be on the list.

[00:46:39] Speaker 04:
Who should be on this list.

[00:46:39] Speaker 04:
is, I think, you're not challenging.

[00:46:42] Speaker 03:
No, we have pointed out at the beginning of our 50s.

[00:46:46] Speaker 04:
And you're not making a comparison.

[00:46:47] Speaker 04:
You're not saying of the six or so countries that were on the list used the wrong one.

[00:46:53] Speaker 04:
You're saying you actually should have used an off-list country.

[00:46:58] Speaker 03:
Right.

[00:46:58] Speaker 03:
All the parties had an opportunity to look at that list and determine whether a country on that list was going to provide the best available information.

[00:47:05] Speaker 03:
The department itself decided that it needed extra information from India.

[00:47:09] Speaker 03:
because there was lacking information.

[00:47:11] Speaker 03:
And so it was between the Philippines and India on here and saying that the Philippines is problematic enough.

[00:47:20] Speaker 03:
And just to reiterate, there is a complete, I mean, the Indian record is not just a few inputs.

[00:47:28] Speaker 03:
I think that was referenced by

[00:47:32] Speaker 03:
Defendant interveners, that the Indian record is at appendix 2372 as most of the GTM imports.

[00:47:40] Speaker 03:
The department itself at 1844 put on the labor rate, Indian financial statements, chemical weekly.

[00:47:45] Speaker 03:
We have a robust Indian record here.

[00:47:47] Speaker 03:
And it isn't just chlorine, but again, it's chlorinated isocyanurates.

[00:47:51] Speaker 03:
This is critical.

[00:47:53] Speaker 03:
It's also five financial statements in India, first one that we argue is subsidized in the Philippines.

[00:47:59] Speaker 03:
And it's multiple important chemical inputs that are more specific.

[00:48:03] Speaker 04:
Thank you.

[00:48:19] Speaker 01:
Thank you.

[00:48:19] Speaker 01:
I just want to touch for a minute or so on a few of the statements that were made about what evidence was on the record with respect to Eurea.

[00:48:27] Speaker 01:
There was a statement that the courts

[00:48:29] Speaker 01:
The lower level court said, well, 92% of urea is imported.

[00:48:34] Speaker 01:
The lower court did not say that.

[00:48:36] Speaker 01:
And in fact, what the record says is 92% of Philippine fertilizer requirements are imported in 2010, the year before we're looking at here.

[00:48:44] Speaker 01:
There's a lot of fertilizer.

[00:48:45] Speaker 01:
Urea is one type of fertilizer.

[00:48:48] Speaker 01:
Nothing about that statement implies that what's imported is fertilizer, particularly when you combine it

[00:48:54] Speaker 01:
with the other statements about what was imported and what was produced domestically, ammonium sulfate, phosphatic fertilizers.

[00:49:01] Speaker 01:
The record shows those were produced domestically.

[00:49:05] Speaker 01:
Another statement that was made was, well, import data is not good because we don't know what it's used for.

[00:49:11] Speaker 01:
It could be used for fertilizer.

[00:49:12] Speaker 01:
It could be used for industrial purposes.

[00:49:14] Speaker 01:
Well, in fact, we're looking at an industrial use here.

[00:49:17] Speaker 01:
And the BAS data is fertilizer sales at the retail level.

[00:49:22] Speaker 04:
Can I ask you a question?

[00:49:24] Speaker 04:
that I guess is prompted particularly by the discussion with Mr. Cannon.

[00:49:32] Speaker 04:
Did commerce rest its determination about using the domestic Philippines urea price entirely on a finding that there was domestic Philippines production of urea, or did it say in addition

[00:49:53] Speaker 04:
or independently, we would use the domestic Philippines urea price, even if every bit of it came into the Philippines from outside the Philippines.

[00:50:07] Speaker 01:
In the remand decisions, they've rested it totally on the possibility of domestic production.

[00:50:14] Speaker 01:
This concept that a domestic price is any price in the market, regardless of what the source of the input is,

[00:50:22] Speaker 01:
has come up only in the court litigation, not in the remand decision, but in subsequent briefing.

[00:50:31] Speaker 04:
Can I switch topics and ask you a question that probably I should have asked you before?

[00:50:36] Speaker 04:
Describe in a concrete way what capping is.

[00:50:42] Speaker 04:
Capping is when commerce determines that, because you're dealing with- Describe how capping would work with respect to these particular components.

[00:50:52] Speaker 01:
With these products, the way you would cap it under commerce's normal methodology would be to look at the surrogate value of the inputs into what becomes ammonia gas and sulfuric acid.

[00:51:06] Speaker 01:
In this case, the input is urea.

[00:51:10] Speaker 01:
Urea is converted to cyanuric acid producing byproducts of ammonia gas and recovered sulfuric acid.

[00:51:18] Speaker 01:
So you have to look to the urea surrogate value.

[00:51:22] Speaker 01:
Well, certainly if you're using the imported surrogate value, you're below the value of ammonium sulfate.

[00:51:31] Speaker 01:
So in capping, they would have capped it at the level of the surrogate value for urea.

[00:51:35] Speaker 01:
They would have just taken the volume produced of ammonia

[00:51:39] Speaker 01:
and the volume produced of recovered sulfuric acid and valued those using essentially the urea surrogate value.

[00:51:46] Speaker 01:
If you had more than one significant input in, you'd average the inputs values.

[00:51:52] Speaker 01:
Here, you only have the one.

[00:51:54] Speaker 01:
You have urea.

[00:51:57] Speaker 01:
OK, I hope that answered it.

[00:52:00] Speaker 01:
Good.

[00:52:01] Speaker 01:
To get back to continue with the byproduct,

[00:52:06] Speaker 01:
One of the things we said, well, yes, they use a chemical formula, but they don't really know.

[00:52:10] Speaker 01:
Well, they do know.

[00:52:11] Speaker 01:
The chemical formula, it's a molar-based, it's molecular.

[00:52:14] Speaker 01:
And Commerce has no problem with it, because they continue to use molecular formula to determine Jahang's other two byproducts, which also are not directly sold, but are used to produce other products.

[00:52:24] Speaker 01:
And with that, I'll conclude.

[00:52:26] Speaker 01:
Thank you.

[00:52:26] Speaker 04:
And thanks to all counsel.

[00:52:27] Speaker 04:
The case is submitted.