Jacobi Carbons AB v. United States (222 F. Supp. 3d 1159, 2017)

OPINION

Barnett, Judge:

Plaintiffs Jacobi Carbons AB and Jacobi Carbons, Inc. (together, “Jacobi”), and Plaintiff-Intervenors (collectively, with Jacobi, “Plaintiffs”), move, pursuant to United States Court of International Trade (“USCIT”) Rule 56.2, for judgment on the agency record, challenging the United States Department of Commerce’s (“Defendant” or “Commerce”) Final Results in the seventh administrative review (“AR7”) of the antidumping duty order on certain activated carbon from the People’s Republic of China (“PRC”). See Certain Activated Carbon from the People’s Republic of China, 80 Fed. Reg. 61,172 (Dep’t Commerce Oct. 9, 2015) (final results of antidumping duty administrative review; 2013-2014) (“Final Results”), PJA Tab 42, PR 414, ECF No. 85-4, and accompanying Issues and Decision Memorandum, A-570-904 (Oct. 2, 2015) (“Final I & D Mem.”), PJA Tab 39, PR 407, ECF No. 85-4.

Plaintiffs argue that Commerce erred in (1) rejecting the Philippines and selecting Thailand as the primary surrogate country, (2) using Thai import data as the surrogate value for carbonized material, and (3) reducing Jacobi’s constructed export price (“CEP”) by an amount for Chinese value added tax (“VAT”). See generally Confidential Pls. Jacobi Carbons AB and Jacobi Carbons, Inc.’s Mot. for J. on the Agency R. and Pls.’ Br. in Supp. of their Mot. for J. on the Agency R. (“Jacobi Mem.”), ECF No. 51; Pls. Carbon Activated Tianjin Co., Ltd., Jilin Bright Future Chemicals Company, Ltd., Ningxia Mineral and Chemical Limited, Shanxi DMD Corporation, Shanxi Industry Technology Trading Co., Ltd., Shanxi Sincere Industrial Co., Ltd., Tancarb Activated Co., Ltd., and Tianjin Maijin Industries Co., Ltd. Mot. for J. on the Agency R., ECF No. 59; Pis. Carbon Activated Tianjin Co., Ltd., Jilin Bright Future Chemicals Company, Ltd., Ningxia Mineral and Chemical Limited, Shanxi DMD Corporation, Shanxi Industry Technology Trading Co., Ltd., Shanxi Sincere Industrial Co., Ltd., Tancarb Activated Co., Ltd., and Tianjin Maijin Industries Co., Ltd. Mem. in Supp. of Mot. for J. on the Agency R. (“CATC Mem.”), ECF No. 59-2 (incorporating Jacobi’s arguments and providing additional arguments on all issues); Pl.-Intervenor Ningxia Huahui Activated Carbon Co., Ltd.’s Rule 56.2 Mot. for J. on the Agency R. (“Huahui Mem.”), ECF No. 58 (incorporating Jacobi’s arguments regarding surrogate country and surrogate value selection, adopting Jacobi’s arguments regarding VAT and making additional arguments thereto); Mot. of GDLSK Pl.-Intervenors for J. on the Agency R. under USCIT Rule 56.2 and Mem. of Law in Supp. of GDLSK Pis.’ Rule 56.2 Mot. for J. on the Agency R. (“GDLSK Mem.”), ECF No. 60 (adopting all arguments made by Jacobi and providing additional argument regarding the VAT). For the following reasons, the court remands the determination to Commerce to clarify and, if necessary, revise its findings on the issues of the economic comparability and significant production of Thailand, and the irrecoverable VAT calculation. The court defers ruling on Plaintiffs’ challenges to Commerce’s surrogate value selections pending the results of the redetermination.

Background

I. Preliminary Proceedings

On May 29, 2014, Commerce initiated AR7 on certain activated carbon from China for the period of review (“POR”) April 1, 2013 to March 1, 2014. Initiation of Antidumping and Countervailing Duty Administrative Reviews, 79 Fed. Reg. 30,-809 (Dep’t Commerce May 29, 2014), PJA Tab 6, PR 18, ECF No. 85-1. Commerce selected Jacobi and Datong Juqiang Activated Carbon Co., Ltd. (“DJAC”) as mandatory respondents for individual examination for AR7 “because they constitute the PRC exporters accounting for the largest volume of U.S. imports of subject merchandise that can reasonably be examined.” Selection of Respondents for Individual Review (June 26, 2014) at 1, CJA Tab 10, CR 6, ECF No. 86.

On July 25, 2014, Commerce invited interested parties to comment on surrogate country selection and surrogate value data. See Request for Surrogate Country and Surrogate Value Comments and Information (July 25, 2014) (“Commerce SC Letter”), PJA Tab 43, PR 64, ECF No. 85-4. Commerce provided interested parties with a “non-exhaustive list of countries” that, based on 2012 per capita gross national income (“GNI”), Commerce’s Office of Policy (“OP”) considered economically comparable to the PRC. Id. at 1; see also id., Attach. 1 (“OP SC List for AR7”) (listing South Africa, Colombia, Bulgaria, Thailand, Ecuador, and Indonesia as economically comparable countries). Commerce invited interested parties to propose additional countries. Id. at 1.

On November 12, 2014, Jacobi submitted surrogate country comments. See Jacobi’s Initial Comments on Surrogate County Selection (Nov. 12, 2014) (“Jacobi SC Comments”), PJA Tab 4, PR 178, ECF No. 85-1. Jacobi urged Commerce to rely on 2013 GNI data from the World Bank’s “World Development Indicators Database,” and asserted that data therein demonstrates the Philippines’ economic comparability to China. Id. at 3. On March 31, 2015, DJAC submitted surrogate value information proposing Thai Harmonized System (“HS”) code 4402.90.1000, “Of Coconut Shell,” to value carbonized material. Second Surrogate Value Submission by Datong Juqiang Activated Carbon Co., Ltd. (March 31, 2015) (“DJAC Second SV Submission”), Ex. 2A (“Thai Import Statistics”), PJA Tab 15, PR 322, ECF No. 85-3.

On May 5, 2015, Commerce published its Preliminary Results. See Certain Activated Carbon from the People’s Republic of China, 80 Fed. Reg. 25,669 (Dep’t Commerce May 5, 2015) (prelim, results of antidumping duty admin, review: 2013-2014) (“Prelim. Results”), PJA Tab 23, PR 351, ECF No. 85-3, and accompanying Issues and Decision Memorandum, A-570-904 (Apr. 29, 2015) (“Prelim. I & D Mem.”), PJA Tab 17, PR 335, ECF No. 85-3. Commerce selected Thailand as the primary surrogate country. Id. at 17. Commerce explained that Bulgaria, Ecuador, Romania, South Africa, Thailand, and Ukraine are economically comparable to the PRC on the basis of 2013 GNI data; the Philippines are Indonesia are not. Id. at 14-15. Of the economically comparable countries, Commerce relied on Global Trade Atlas export data to find that Ecuador, Thailand, and South Africa are significant producers of comparable merchandise. Id. at 16; see also Surrogate Values for the Preliminary Results (Apr. 29, 2015) (“Prelim. SV Mem.”), Attach. 1 (“Global Trade Atlas Reporting Country Export Statistics”), PJA Tab 18, PR 336-39, ECF No. 85-3.

Interested parties had placed Indonesian, Thai, Philippine, and Ukrainian surrogate value data on the record for Commerce’s consideration. Prelim. I & D Mem. at 16. Commerce rejected the Philippine and Indonesian data because it did not find those countries to be economically comparable, and it determined it had “sufficiently reliable and useable [surrogate value] data” from a comparable country, Thailand. Id. at 16-17, 27. Relevant here, Commerce selected the 2010 audited financial statement of Carbokarn Co., Ltd. (“Carbokarn”), a Thai activated carbon company, to value factory overhead, selling, general, and administrative expenses, and profit. Id. at 26. Commerce selected Thai HS code 4402.90.9000, “Wood Charcoal (Including Shell Or Nut Charcoal), Excluding That Of Bamboo, Other,” to value carbonized material. Prelim. SV Mem. at 5, Attach. 3a (Global Trade Atlas surrogate values for AR7); see also Prelim I & D Mem. at 24 (noting Commerce’s reliance on Thai import data to value raw materials).

Finally, Commerce noted that, in non-market economy (“NME”) cases, its practice “is to subtract from [export price] or the [constructed export price] the amount of any unrefunded (i.e., irrecoverable) VAT [“Value Added Tax”]”., Prelim. I & D Mem. at 23. After considering the Chinese VAT regulation placed on the record, Commerce reduced Jacobi’s U.S. sales price “by the irrecoverable VAT rate of 17[%] of entered value.” Id. at 23. Commerce calculated an estimated weighted-average dumping margin of 0.0 USD/kg for DJAC and a 0.53 USD/kg margin for Jacobi. Prelim. Results, 80 Fed. Reg. at 25,669. As the only non-zero or non-de minimis dumping margin, Commerce assigned Jacobi’s rate to the separate rate-eligible companies. Id.; Prelim. I & D Mem. at 11.

II. Post-Preliminary Proceedings

In light of DuPont Teijin Films v. United States, 37 CIT -, 931 F.Supp.2d 1297 (2013), and Jacobi’s placement of 2013 GNI data on the record of this proceeding, Commerce placed on the record surrogate country lists from other proceedings using 2013 per capita GNI data. Id. at 13-14 (citing Prelim. SV Mem.). Commerce gave interested parties additional time to comment on the surrogate country lists and submit additional surrogate value data for consideration. Id. at 13-14; see also Clarification of Deadline to Submit SV Information (June 3, 2015), PJA 31, PR 372, ECP No. 85-4.

III. Final Results

On October 9, 2015, Commerce published the Final Results. See Final Results. Commerce affirmed its preliminary selection of Thailand as the primary surrogate country. Final I & D Mem. at 5-8. Commerce selected Carbokarn’s 2011 financial statement to value financial ratios, which had been placed on the record during post-preliminary proceedings and which was more contemporaneous with the relevant POR than the 2010 Carbokarn statement used in the Preliminary Results. Final I & D Mem. at 13. Commerce selected Thai HS code 4402.90.1000 (“Of Coconut Shell”) as the surrogate value for carbonized material because it is more specific to Jacobi’s inputs than is Thai HS 4402.9000 (“Wood Charcoal”). Id. at 25, 26. As it did in the Preliminary Results, Commerce deducted 17 percent irrecoverable VAT from the U.S. price of Jacobi’s CEP sales. Id. at 16-20. Commerce calculated a weighted-average dumping margin of $1.05 USD/kg for Jacobi and $0.00 USD/kg for DJAC. Final Results, 80 Fed. Reg. at 61,174. Because Jacobi’s rate is not zero, de minimis, or based on facts available, it was assigned to the separate rate companies. Id.

Before this court is Plaintiffs’ challenge to Commerce’s Final Results. The arguments are fully briefed, and the court heard oral argument on December 21, 2016. See Docket Entry, ECF No. 93. For the reasons discussed below, the Final Results are remanded for further explanation and reconsideration, if necessary, of Commerce’s determination of the economic comparability of Thailand and the Philippines, Commerce’s determination that Thailand is a significant producer of activated carbon, and Commerce’s calculation of the irrecoverable VAT. The court defers resolution of Plaintiffs’ challenges to Commerce’s particular surrogate values pending the results of the redetermination.

Jurisdiction and Standard op Review

The court has jurisdiction pursuant to § 516A(a)(2)(B)(iii) of the Tariff Act of 1930, as amended, 19 U.S.C. § 1516a(a)(2)(B)(iii) (2012), and 28 U.S.C. § 1581(c) (2012).

The court will uphold an agency determination that is supported by substantial evidence and otherwise in accordance with law. 19 U.S.C. § 1516a(b)(1)(B)(i). “Substantial evidence is ‘such relevant evidence as a reasonable mind might accept as adequate to support a conclusion.’” Huaiyin Foreign Trade Corp. (30) v. United States, 322 F.3d 1369, 1374 (Fed. Cir. 2003) (quoting Consol. Edison Co. v. NLRB, 305 U.S. 197, 229, 59 S.Ct. 206, 83 L.Ed. 126 (1938)). It ‘“requires more than a mere scintilla,” but “less than the weight of the evidence.” Nucor Corp. v. United States, 34 C.I.T. 70, 72, 675 F.Supp.2d 1340, 1345 (2010) (quoting Altx, Inc. v. United States, 370 F.3d 1108, 1116 (Fed. Cir. 2004)). In determining whether substantial evidence supports Commerce’s determination, the court must consider “the record as a whole, including evidence that supports as well as evidence that ‘fairly detracts from the substantiality of the evidence.’ ” Nippon Steel Corp. v. United States, 337 F.3d 1373, 1379 (Fed. Cir. 2003) (quoting Atl. Sugar, Ltd. v. United States, 744 F.2d 1556, 1562 (Fed. Cir. 1984)). However, that a plaintiff can point to evidence that detracts from the agency’s conclusion or that there is a possibility of drawing two inconsistent conclusions from the evidence does not preclude the agency’s finding from being supported by substantial evidence. Matsushita Elec. Indus. Co. v. United States, 750 F.2d 927, 933 (Fed. Cir. 1984) (citing Consolo v. Fed. Mar. Comm’n, 383 U.S. 607, 619-20, 86 S.Ct. 1018, 16 L.Ed.2d 131 (1966)). The court may not “reweigh the evidence or ... reconsider questions of fact anew.” Downhole Pipe & Equip., L.P. v. United States, 776 F.3d 1369, 1377 (Fed. Cir. 2015) (quoting Trent Tube Div., Crucible Materials Corp. v. Avesta Sandvik Tube AB, 975 F.2d 807, 815 (Fed. Cir. 1992)); see also Usinor v. United States, 28 C.I.T. 1107, 1111, 342 F.Supp.2d 1267, 1272 (2004) (citation omitted) (the court “may not reweigh the evidence or substitute its own judgment for that of the agency”).

Separately, the two-step framework provided in Chevron, U.S.A., Inc. v. Natural Resources Defense Council, Inc., 467 U.S. 837, 842-45, 104 S.Ct. 2778, 81 L.Ed.2d 694 (1984), guides judicial review of the Department’s interpretation of the antidumping and countervailing duty statutes. See Nucor Corp. v. United States, 414 F.3d 1331, 1336 (Fed. Cir. 2005). First, the Court “must determine whether Congress has directly spoken to the precise question at issue.” Heino v. Shinseki, 683 F.3d 1372, 1377 (Fed. Cir. 2012) (quoting Chevron, 467 U.S. at 842, 104 S.Ct. 2778). If Congress’s intent is clear, “that is the end of the matter.” Id. (quoting Chevron, 467 U.S. at 842-43, 104 S.Ct. 2778). However, “[i]f the statute is silent or ambiguous,” the Court must determine “whether the agency’s [action] is based on a permissible construction of the statute.” Dominion Res., Inc. v. United States, 681 F.3d 1313, 1317 (Fed. Cir. 2012) (citing Chevron, 467 U.S. at 842-43, 104 S.Ct. 2778).

Discussion

I. Rule 56.2 Motions for Judgment on the Agency Record

A. Surrogate Country Selection

Plaintiffs contend that Commerce’s surrogate country analysis was unlawful, and its decision to reject the Philippines as the primary surrogate country in favor of Thailand was not supported by substantial evidence. Jacobi Mem. at 9-30; CATC Mem. at 2-9. Commerce and Defendant-Intervenors Calgon Carbon Corp. and Cabot Norit Americas Inc. (together, “Calgon”) argue that Commerce’s selection of Thailand was lawful and supported by substantial evidence. Def.’s Resp. to Pls.’ Rule 56.2 Mots. For J. Upon the Agency R. (“Gov. Resp.”) at 15-43, ECF No. 92; Confidential Def.-Intervenors’ Resp. in Opp’n to Consolidated Pls.’ Mots. For J. Upon the Agency R. (“Calgon Resp.”) at 10-33, ECF No. 73.

i. Legal Framework for Surrogate Country Selection

a. Statutory and Regulatory Framework

An antidumping duty is “the amount by which the normal value exceeds the export price (or the constructed export price) for the merchandise.” 19 U.S.C. § 1673. When, as here, “the subject merchandise is exported from a nonmarket economy country,” Commerce determines “normal value” by valuing the “factors of production” used in producing the subject merchandise, and “an amount for general expenses and profit plus the cost of containers, coverings, and other expenses” in a surrogate market economy country. 19 U.S.C. § 1677b(c)(1).

Commerce values the factors of production using “the best available information regarding the values of such factors” in an “appropriate” market economy country or countries. 19 U.S.C. § 1677b(c)(1)(B). In deciding what is an “appropriate” market economy country, Commerce must utilize, “to the extent possible, the prices or costs of factors of production” in a market economy country that is at “a level of economic development comparable to that of the [NME] country,” and is a “significant produced] of comparable merchandise.” 19 U.S.C. § 1677b(c)(4). “The process of choosing a market economy country to value the factors of production is known as surrogate country selection.” Jiaxing Bro. Fastener Co., Ltd. v. United States, 822 F.3d 1289, 1293 (Fed. Cir. 2016) (citing Dorbest Ltd. v. United States, 604 F.3d 1363, 1368 (Fed. Cir. 2010)). Commerce generally values all factors of production in a single surrogate country. See 19 C.F.R. § 351.408(c)(2) (excepting labor). But see Antidumping Methodologies in Proceedings Involving Non-Market Economies: Valuing the Factor of Production: Labor, 76 Fed. Reg. 36,092 (Dep’t Commerce June 21, 2011) (expressing a preference to value labor based on industry-specific labor rates from the primary surrogate country).

b. Commerce Policy Bulletin 04.1

Commerce has adopted a four-step approach to implement the above-described statutory and regulatory framework. See Import Admin., U.S. Dep’t of Commerce, Non-Market Economy Surrogate Country Selection Process, Policy Bulletin 04.1 (2004), http://enforcement.trade.gov/policy/ bull04-l.html (last visited March 31, 2017) [hereinafter “Policy Bulletin 04.1”]. First, OP compiles a list of potential surrogate countries that are economically comparable to the NME based on per capita GNI as reported by the World Bank. Policy Bulletin 04,1 at 2. Potential surrogate countries “are not ranked” and are “considered equivalent in terms of economic comparability.” Id. Second, among the potential surrogates, Commerce identifies countries that produce comparable merchandise. Id. Third, Commerce determines whether any of the potential surrogates identified in step two are significant producers of comparable merchandise. Id. at 3. Whether production is “significant” is generally determined in relation to “world production of, and trade in, comparable merchandise.” Id. Finally, if two or more countries fulfill the first three criteria, Commerce selects as the primary surrogate the country with the best surrogate value data. Id. at 4; see also Jiaxing Bro. Fastener Co., Ltd., 822 F.3d at 1293 (citation omitted) (describing the four-step process).

ii. Commerce’s Sequential Approach to Surrogate Country Selection

a. Parties’ Contentions

Jacobi contends that Commerce erred when it excluded the Philippines as a potential surrogate country solely on the basis of economic comparability and declined to consider its significant production of comparable merchandise and its data quality. See Jacobi Mem. at 9-13; see also CATO Mem. at 5 (asserting that “[Commerce] cannot lawfully make one criterion a threshold requirement ....”). CATC argues that the statutory mandate to use the “best available information” elevates Commerce’s data criterion such that it “is, at a minimum, equally as critical” as the economic comparability and significant comparable production criteria. CATC Mem. at 3. Jacobi and CATC point to several decisions from this court as support for the proposition that “economic comparability alone cannot be used to determine a reasonable primary surrogate country.” Jacobi Mem. at 11-12 (citing Vinh Hoan Corp. v. United States, 39 CIT -, 49 F.Supp.3d 1285, 1303 (2015), Ad Hoc Shrimp Trade Action Committee v. United States, 36 CIT -, 882 F.Supp.2d 1366, 1374-75 (2012), and Allied Pac. Food (Dalian) Co. Ltd. v. United States, 32 C.I.T. 1328, 587 F.Supp.2d 1330, 1357 (2008)); CATC Mem. at 3-4 (citing Ad Hoc Shrimp, 882 F.Supp.2d at 1374, and Amanda Foods (Vietnam) Ltd. v. United States (“Amanda Foods”), 33 C.I.T. 1407, 1413, 647 F.Supp.2d 1368, 1376-78 (2009)).

Commerce contends that Plaintiffs failed to raise arguments related to its surrogate country methodology in the underlying administrative proceeding, and, thus, failed to exhaust their administrative remedies. Gov. Resp. at 20-23. Commerce further contends that it properly applied Policy Bulletin 04.1 in selecting Thailand as the primary surrogate country. Gov. Resp. at 18-20, 23-28.

b. Administrative Exhaustion

1. Legal Standard

“[T]he Court of International Trade shall, where appropriate, require the exhaustion of administrative remedies.” 28 U.S.C. § 2637(d). Exhaustion of administrative remedies is a doctrine that holds “that no one is entitled to judicial relief for a supposed or threatened injury until the prescribed administrative remedy has been exhausted.” Consol. Bearings Co. v. United States, 348 F.3d 997, 1003 (Fed. Cir. 2003) (internal quotation marks and citation omitted). Commerce regulations require parties to raise all arguments they wish to preserve in their case briefs to the agency. See 19 C.F.R.§ 351.309. This requirement permits the agency to address the issue in the first instance, in its final results, prior to being considered by the courts and the Court of Appeals for the Federal Circuit (“Federal Circuit”) has confirmed the reasonableness of this approach. See Qingdao Sear-Line Trading Co. Ltd. v. United States, 766 F.3d 1378, 1388 (Fed. Cir. 2014) (“Commerce regulations require presentation of all issues and arguments in a party’s administrative case brief’); Dorbest Ltd. 604 F.3d at 1375 (insufficient for party to have raised an issue in a footnote in the rebuttal brief or during the ministerial comment period when the issue was not raised in the party’s case brief). Issues not raised before the agency in case and rebuttal briefs are waived for failure to exhaust and cannot be raised on appeal before this court. 28 U.S.C. § 2637(d). There are exceptions to the requirement of exhaustion, which may be applied at the court’s discretion.

2. Plaintiffs Adequately Exhausted Their Remedies

A careful review of the case briefs filed in the underlying administrative proceeding show that Plaintiffs sufficiently raised Commerce’s sequential approach to surrogate country selection. See Trust Chem Co. Ltd. v. United States, 35 CIT -. -, 791 F.Supp.2d 1257, 1268 & n.27 (2011) (“The determinative question [regarding administrative exhaustion] is whether Commerce was put on notice of the issue .... ”). CATC squarely raised the issue in its case brief, asserting that:

As demonstrated by [Commerce’s] Preliminary Results, [Commerce] has treated the economic comparability criteria of its surrogate country analysis as a threshold. [Commerce] did not consider the relative quality of data in countries outside of the [per capita] GNI band nor did [Commerce] consider the relative significant production of countries outside of the GNI band. After determining the Philippines and Indonesia were not at the same level of economic comparability, [Commerce] stopped its analysis of these countries. This approach cannot be reconciled with the relevant statutory mandate.

CATC Case Br. (June 22, 2015) at 6, PJA Tab 33, PR 375, ECF No. 85-4 (emphasis added). Likewise, DJAC asserted that Commerce must “weigh the economic comparability, significant production and data quality considerations conjunctively, rather than disjunctively.” Case Br. of Datong Juqiang Activated Carbon Co., Ltd. (June 22, 2015) at 4-5, PJA Tab 32, PR 374, ECF No. 85-4. For its part, Jacobi asserted that Commerce should select the Philippines because it “best meets all of the criteria outlined in [Commerce’s] policy bulletin,” and that Commerce has previously “conducted a broader analysis of what constitutes the best available surrogate country,” and has “relied upon the totality of facts rather than the proximity of the GNI for the potential surrogate country.” Jacobi’s Case Br. for POR 7 (June 22, 2015) (“Jacobi Case Br.”) at 5, 7, PJA Tab 34, PR 381, ECF No. 85-4 (second emphasis added). Accordingly, Commerce’s exhaustion argument lacks merit.

c. Commerce’s Sequential Surrogate Country Selection Methodology is Lawful

Plaintiffs argue that Commerce erred when it excluded the Philippines as a potential surrogate country on the basis of lack of economic comparability; instead, Plaintiffs contend, Commerce should have considered the degree to which the Philippines fulfilled all three statutory criteria before making its determination. The Federal Circuit, however, has rejected this same argument by parties in Jiaxing Brother Fastener Co., Ltd. Therein, the Federal Circuit addressed whether Commerce’s decision to exclude India from consideration as a potential surrogate country on the basis of its lack of economic comparability conflicted with the express terms of 19 U.S.C. § 1677b. Jiaxing Bro. Fastener Co., Ltd., 822 F.3d at 1298. Finding that it did not, the Federal Circuit reasoned that “nothing in the statute ... requires Commerce to consider any particular country as a surrogate country.” Id. The Federal Circuit noted that “[w]hen Congress does not mandate a procedure or methodology for applying a statutory test, ‘Commerce may perform its duties in the way it believes most suitable.’ ” Id. (quoting JBF RAK LLC v. United States, 790 F.3d 1358, 1364 (Fed. Cir. 2015)).

Further, this court has affirmed Commerce’s discretion to exclude countries from consideration on the basis of economic comparability. See Fresh Garlic Producers Ass’n v. United States (“Fresh Garlic I”), 39 CIT -, -, 121 F.Supp.3d 1313, 1341 (2015) (recognizing that beginning its analysis with economically comparable countries, in normal cases, better enables Commerce to calculate normal value in a hypothetical market economy country; however, economic comparability should not be a first step when the subject merchandise is unusual or unique, is produced in only a few countries, or the major inputs are not widely traded); Jiaxing Bro. Fastener Co., Ltd. v. United States, 39 CIT -, -, 961 F.Supp.2d 1323, 1331 (2014) (“India though cannot be a suitable primary surrogate country on this administrative record because it is not economically comparable to the PRC.”); Foshan Shunde Yongjian Housewares & Hardwares Co. v. United States, 37 CIT -, -, 896 F.Supp.2d 1313, 1321-22 (2013) (affirming Commerce’s decision to exclude India from its surrogate country list when it had the lowest GNI relative to China as compared to other countries under consideration); Clearon Corp. v. United States (“Clearon I”), 38 CIT -, -, 2014 WL 3643332 at *11-*12, *15 (2014) (rejecting argument that Commerce wrongfully applied per capita GNI as a threshold consideration in rejecting India as a potential surrogate country; remanding for further explanation of how Commerce determined the range of GNIs reflected on OP’s list of potential surrogate countries).

In asserting that Commerce should have weighed the Philippines’ fulfillment of all three statutory criteria, Jacobi and CATC would misapply several opinions from this court addressing Commerce’s selection of a surrogate country from among two countries on OP’s list. For example, Jacobi relies on the following passage from Ad Hoc Shrimp:

Because none of Commerce’s three surrogate country eligibility criteria is preeminent, it follows that relative strengths and weaknesses among potential surrogates must be weighed by evaluating the extent to which the potential surrogates satisfy each of the three criteria.

Jacobi Mem. at 12 (citing Ad Hoc Shrimp, 882 F.Supp.2d at 1371, 1374-75) (emphasis omitted); see also CATC Mem. at 4. However, Ad Hoc Shrimp addresses Commerce’s policy of treating all countries on OP’s list as equally economically comparable. 882 F.Supp.2d at 1374. The passage Jacobi relies on reflects the court’s finding that Commerce may not ignore relative differences in economic comparability and data quality when deciding which of the listed countries to select as the primary surrogate country. Id. at 1375 (“Because Commerce has provided no reasonable explanation as to why potentially slight differences in data quality necessarily outweigh potentially large differences in economic comparability, a blanket policy of simply refusing to engage in this inquiry does not amount to reasoned decision-making.”).

CATC’s reliance on a similar passage from Amanda Foods is also misplaced. See CATC Mem. at 4 (quoting Amanda Foods, 33 C.I.T. at 1413, 647 F.Supp.2d at 1376 (“Nor has Commerce explained why the difference between Bangladesh and Vietnam, in per capita GDP, is not relevant in this case or why the difference in economic similarity to Vietnam is outweighed by the differences in quality of data between Bangladesh and India.”)). CATC omits the next sentence, however, in which the court admonishes Commerce for “adopting] a policy of treating all countries on the surrogate countnj list as being equally comparable to Vietnam.” Amanda Foods, 33 C.I.T. at 1413, 647 F.Supp.2d at 1376 (emphasis added). Ad Hoc Shrimp and Amanda Foods are inapposite when, as here, Plaintiffs are advocating for the selection of a country that OP did not include on its list.

Allied Pac., another case relied on by Jacobi, addresses the conjunctive nature of the statutory selection criteria. In particular, Allied Pac. considers whether Commerce’s use of “regression analysis [pursuant to 19 C.F.R. § 351.408(c)(3)] based on a basket of countries not economically comparable to China” to determine the surrogate labor rate complies with Congress’s instruction to value, “to the extent possible,” factors of production in market economy countries that are economically comparable and significant producers of comparable merchandise. Allied Pac., 32 C.I.T. at 1352, 1357, 587 F.Supp.2d at 1351, 1355 (“Congress’s use of the conjunctive in § 1677b(c)(4)(A) to join the two criteria signifies congressional intent that, to the extent possible, Commerce must use prices or costs that satisfy the two criteria simultaneously.”)- After extensive analysis, the court held that 19 C.F.R. § 351.408(c)(3) conflicted with 19 U.S.C. § 1677b(c) and, thus, was invalid. Allied Pac., 32 C.I.T. at 1364, 587 F.Supp.2d at 1361. Allied Pac. did not speak to the instant issue—whether Commerce must consider a country’s fulfillment of each of the statutory criteria before excluding it from consideration.

Jacobi also attempts to rely on an opinion from this court analyzing whether Commerce must, in the event an “off-list” country is proposed, determine whether that country’s data quality outweighs its lack of economic comparability. See Jacobi Mem. at 12-13 (citing Clearon Corp. v. United States (“Clearon II”), 39 CIT -, -, 2015 WL 4978995, at *4 (2015)). In Olearon II, the court stated that

[o]n the one hand, it is unreasonable for Commerce to acknowledge that the level of economic comparability and the quality of a country’s data are two separate considerations, and then refuse to undertake a comparative analysis, of the type Commerce here implies it must undertake, in order to determine whether data quality outweighs the fact that a country is not on the surrogate country list.

2015 WL 4978995, at *4; see also Jacobi Mem. at 12-13. However, in Olearon II, the court further explained that “the party proposing a non-listed country [must first demonstrate] that no country on the surrogate country list provides the scope of ‘quality’ data that [Commerce] requires in order to make a primary surrogate country selection” before Commerce must consider the data quality of the non-listed country. Clearon II, 2015 WL 4978995, at *4. Jacobi’s reliance on Clearon II is misplaced for several reasons.

First, the above-quoted passages essentially restate Commerce’s policy to select a country on OP’s list unless none are usable because “(a) they either are not significant producers of comparable merchandise, (b) do not provide sufficiently reliable sources of publicly available SV data, or (c) are not suitable for use based on other reasons.” Final I & D Mem. at 6; see also Clearon Corp. v. United States (“Clearon III”), 40 CIT -, -, 2016 WL 6892556, at *3 (2016) (characterizing its statement in Olearon II as an examination of how Commerce “typically” approaches surrogate country selection). The Olearon II court did not conclude, as Plaintiffs here assert, that Commerce’s sequential approach to surrogate country selection is unlawful.

Second, Jacobi’s reliance on Clearon II appears to interject a “substantial evidence” issue into its argument that Commerce’s surrogate country analysis was “not in accordance with law” by urging the court to consider the sufficiency of Thai data for valuing factors of production as part of its consideration whether Commerce’s sequential approach to surrogate country selection is lawful. See Jacobi Mem. at 9 (capitalization omitted). However, whether Commerce’s method of selecting the primary surrogate country is lawful is an issue distinct from whether the results Commerce obtained are supported by substantial evidence. The court will not conflate the two.

Relatedly, and finally, it bears repeating that the issue Plaintiffs raise here is whether Commerce permissibly excluded the Philippines on the basis of lack of economic comparability, or whether Commerce should have considered the Philippines’ fulfilment of the other statutory criteria—irrespective of the quality of Thai data—before excluding it. Clearon II is, thus, unsupportive of Plaintiffs’ argument.

In sum, Commerce has discretion to develop a reasonable methodology to implement its surrogate country selection criteria. Jiaxing Bro. Fastener Co., Ltd., 822 F.3d at 1298. This court has consistently rejected challenges to Commerce’s exclusion of particular countries as potential surrogate countries based on their lack of economic comparability. See Clearon I, 2014 WL 3648332, at *11 (noting this court’s consistent “approach [to] the selection process [that treats] per capita GNI ranking as a threshold statutory criterion that must be met before the other criteria are considered”). Plaintiffs offer nothing new that merits a different outcome here.

iii. Whether Substantial Evidence Supports Commerce’s Selection of Thailand as the Primary Surrogate Country

a. Parties’ Contentions

Jacobi contends that “Commerce’s determination that Thailand was a better surrogate country than the Philippines” rests on unsupported factual findings regarding the Philippines’ economic comparability, Thailand’s status as a significant producer, and the quality of Thai data. Jacobi Mem. at 13. CATC asserts that Commerce should have selected the Philippines as the primary surrogate country because it “is the most significant producer of comparable merchandise” and has “critically superior” data than does Thailand. CATC Mem. at 2, 6, 7. Jacobi and CATC also contend that Commerce wrongly interpreted the term “significant producer.” Jacobi Mem. at 13; CATC Mem. at 5-6.

Commerce argues that (1) its determination that the Philippines is not economically comparable to China is supported by substantial evidence, (2) its determination that Thailand is a significant producer is adequately supported and rests on a sound interpretation of the term, and (3) it reasonably relied on Thai data. Gov. Resp. at 28-43. Calgon asserts that record evidence establishes that Thailand meets each of the statutory criteria and, thus, Commerce need not have considered the Philippines. Calgon Resp. at 16, 29. The court addresses Parties’ arguments as to each of the statutory criteria, in turn.

b. Economic Comparability

Jacobi contends that Commerce’s determination that the Philippines’ per capita GNI falls outside the range of countries economically comparable to China “is factually incorrect.” Jacobi Mem. at 14. According to Jacobi, “the 2013 GNI data demonstrate that the Philippines is as economically comparable to China as in previous years when Commerce found the Philippines to be economically comparable”; that, in fact, the Philippines’ 2013 per capita GNI “was even closer to China’s than ... in previous years.” Jacobi Mem. at 14,15. In light of Commerce’s previous selection of the Philippines as the primary surrogate country, Jacobi argues that Commerce’s determination that it lacked economic comparability for this POR was “arbitrary and capricious.” Jacobi Mem. at 15 (citing Juancheng Kangtai Chem. Co. v. United States, 39 CIT -, 2015 WL 4999476 (2015)).

Commerce contends that it “is not required ... to use the same surrogate country that it used in previous reviews,” and it “selects the primary surrogate country for each segment of a proceeding based on the record of that particular segment.” Gov. Resp. at 29. Commerce further contends that it “dropped the Philippines from its surrogate country list” because 2013 GNI data demonstrated that it had become “less economically comparable to China over time,” such that “the Philippines’ and China’s per capita GNI rankings had moved further apart.” Gov. Resp. at 31.

While Jacobi acknowledges that Commerce must make its surrogate country determination on the basis of data submitted for this POR; it argues that “Commerce never explained why a permissible difference [from China’s GNI] suddenly became impermissible.” Pls.’ Reply Br. (“Jacobi Reply”) at 10, ECF No. 81.

1. Legal Framework

Section 1677b(e)(4)(A) does not define the phrase “economic comparability” or require a particular methodology to determine which countries are economically comparable. See 19 U.S.C. § 1677b(4); Jiaxing Bro. Fastener Co., Ltd., 961 F.Supp.2d at 1328. Thus, “Commerce may perform its duties in the way it believes most suitable.’ ” Jiaxing Bro. Fastener Co., Ltd., 822 F.3d at 1298 (internal quotation marks and citation omitted). Commerce’s regulations “emphasi[ze] ... per capita GDP as the measure of economic comparability.” 19 C.F.R. § 351.408(b). However, because per capita GNI is a ‘consistent, transparent, and objective measure to determine economic comparability,’” Jiaxing Bro. Fastener Co., Ltd., 961 F.Supp.2d at 1328, Commerce’s reliance on per capita GNI “is a reasonable interpretation of the statutory mandate to identify and select a primary surrogate country at a ‘level of economic development comparable’ to the nonmarket economy country,” Id. at 1330 (quoting 19 U.S.C. § 1677b(c)(4)(A)); see also Fresh Garlic I, 121 F.Supp.3d at 1337.

2. Commerce’s Economic Comparability Determination Lacks Reasoned Analysis

Commerce is correct that “nothing in the statute [ ] requires [it] to consider any particular country as a surrogate country.” Jiaxing Bro. Fastener Co., Ltd., 822 F.3d at 1298. “[E]ach administrative review is a separate exercise of Commerce’s authority that allows for different conclusions based on different facts in the record.” Id. at 1299 (quoting Qingdao Sea-Line Trading Co. Ltd., 766 F.3d at 1387). Accordingly, the validity of Commerce’s decision to exclude the Philippines from its list of potential surrogate countries for AR7 depends on the validity of Commerce’s compilation of the list generally. See Juancheng Kangtai Chem. Co., 2015 WL 4999476, at *18-*20 & n.29 (“ ‘[A]gency action is arbitrary when the agency offers insufficient reasons for treating similar situations differently”’; however, the validity of Commerce’s “departure from prior determinations finding that the high costs associated with transport of hazardous chemicals like chlorine makes import statistics therefor suspect” depends on “the validity of Commerce’s ultimate conclusion” to rely on import data as the surrogate value for chlorine) (quoting Dongbu Steel Co., Ltd. v. United States, 635 F.3d 1363, 1371 (Fed. Cir. 2011)).

To that end, the court will uphold Commerce’s determination when the path to that determination is reasonably discemable from the determination itself. See NMB Singapore Ltd. v. United States, 557 F.3d 1316, 1319 (Fed. Cir. 2009) (“Commerce must explain the basis for its decisions; while its explanations do not have to be perfect, the path of Commerce’s decision must be reasonably discernable to a reviewing court.”) (internal citations omitted). Although the agency is not required to “make an explicit response to every argument made by a party,” it is required to discuss “issues material to the agency’s determination.” Timken U.S. Corp. v. United States, 421 F.3d 1350, 1354 (Fed. Cir. 2005).

The path explaining the basis for OP’s list of potential surrogate countries is not discernible to the court. In July 2014, Commerce sent interested parties a “non-exhaustive list of countries” that, based on 2012 per capita GNI, were deemed economically comparable to the PRC. Commerce SC Letter at 1; OP SC List for AR7 at 2. Thereafter, Commerce preliminarily selected Thailand as the primary surrogate country. Prelim. I & D Mem. at 17. Commerce explained that it selected Thailand on the basis of 2013 per capita GNI data that Jacobi had placed on the record; Commerce further explained that “none of the surrogate country lists ... based on 2013 GNI data list ... the Philippines as being [economically comparable] to the PRC.” Id. at 13-15 (citing Prelim. SV Mem.). In the Final Results, Commerce again selected Thailand as the primary surrogate country. Final I & D Mem. at 5. Commerce responded to arguments favoring the Philippines by reiterating that “[a]s stated in the Preliminary Results, the Philippines[’] GNI falls outside the range of GNI data represented by the countries on the surrogate country lists and is therefore not at the same level of economic development as the PRC.” Id. Commerce further reiterated that “none of the surrogate country lists issued by the Department based on 2013 GNI data that are on the record of this review list the Philippines as being at the same level of economic development as the PRC.” Id. at 6.

Commerce’s conclusory assertions fail to enable the “court [to] consider whether [its compilation of the list] was based on a consideration of the relevant factors” because the Final Results did not explain what factors OP considered when it compiled the list. Bowman Transp., Inc. v. Arkansas-Best Freight System, Inc., 419 U.S. 281, 285, 95 S.Ct. 438, 42 L.Ed.2d 447 (1974) (internal citations omitted) (“The agency must articulate a rational connection between the facts found and the choice made.”). At oral argument, Defendant explained that OP relied on absolute percentage differences from China’s GNI to determine the GNI range; Ukraine, at 39.7% of China’s GNI represented the low end of the range; and the Philippines’ GNI, which was “less than 50[%]” of China’s GNI, thus fell outside the range. Oral Arg. at 46:51-47:40. However, nowhere in the Final Results does Commerce discuss OP’s reliance on absolute difference or mention the Philippines’ actual GNI or its difference from China’s GNI. See Id. at 42:44-43:30 (referring the court to page 5 of the Final Results for Commerce’s explanation of the parameters upon which it relied to determine economic comparability, wherein it simply states that “the Phil-ippines['] GNI falls outside the range of GNI data represented by the countries on the surrogate country lists”); Final I & D Mem. at 5.

In its briefing to the court, Commerce explains that OP compiles the list by “com-parting] the change in China’s per capita GNI to the changes in the per capita GNIs of the existing set of surrogate countries,” and “then determin[ing] whether it is necessary to re-center the GNI range in light of the year-to-year GNI changes, looking for GNI ranges that are “evenly distributed around [ ] [China’s] GNI.” Gov. Resp. at 30 (citing, inter alia, Remand Results, Clearon Corp. v. United States, Court No. 13-00073, at 9 (Ct. Int’l Trade Dec. 11, 2014), ECF No. 69 (final alteration original). “After centering the GNI range, Commerce searches for countries within that range that are suitable candidates for inclusion on the list.” Id. at 30. Commerce further explains that, in AR7, “the 2013 per capita GNI difference between the Philippines and China is greater than all the countries on the surrogate country list.” Id. at 31.

The inadequacy of Commerce’s explanation for its determination of the GNI range is demonstrated by its citation not to the Issues and Decision Memorandum or record evidence, but to its explanation in another case, post-remand. See Id. at 30; Clearon I, 2014 WL 3643332, at *13 (remanding for Commerce to “provide a reasoned explanation which permits the court to determine the process by which it [developed its potential surrogate country list] was logical and rational, and ... supported by the administrative record” when “Commerce created the potential surrogate country list for the segment of the review at issue without explanation”). In any event, the court may not accept “post hoc rationalizations for agency action,” and may only sustain the agency’s decision “on the same basis articulated in the order by the agency itself.” Burlington Truck Lines, Inc. v. United States, 371 U.S. 156, 168-69, 83 S.Ct. 239, 9 L.Ed.2d 207 (1962). Thus, reasoning that is offered post hoc, in briefing to the court or during oral argument, is not properly part of this court’s review of the agency’s underlying determination when such reasoning is not diseernable from the record itself. Although the record contains the raw data Commerce relied on to compile the list of countries it considers economically comparable to the PRC, see Surrogate Country Memos, Attach. 1 (identifying the 2014 World Bank Development Indicators database as the source for potential surrogate country GNIs); Jacobi SC Comments, Attach. B (2014 World Bank Development Indicators), OP’s determinations regarding what constitutes “economic comparability” on the basis of that data is not discernible. Because Commerce’s determination regarding economic comparability lacks reasoned analysis, the court remands this issue for Commerce to provide a reasoned explanation as to why the range of GNI data reflected on OP’s list demonstrates economic comparability to the PRC, including why the Philippines’ GNI does not. See Timken U.S. Corp., 421 F.3d at 1354 (agency must discuss “issues material to [its] determination”).

c. Significant Production

Jacobi contends that “Global Trade Atlas data for this POR demonstrate that the Philippines is, by far, the ldrgest producer of activated carbon,” and is “about eight times greater than the production volume of Thailand.” Jacobi Mem. at 18-19 (emphasis omitted). Jacobi further argues that “Thailand does not meet the statutory definition of ‘significant producer,’ ” and Commerce has impermissibly found that “any country with non-zero production” is a significant producer. Id. at 19, 21 (citing Fresh Garlic I, 121 F.Supp.3d at 1338-40 (rejecting the proposition that “significant producer” means “any country with nonzero production”)) (emphasis omitted); see also CATC Mem. at 6 (“[Commerce] found that countries with any amount of exports of activated carbon are presumed to be equally significant producers. ‘Any’ is a very broad interpretation of the term ‘significant.’ ”).

According to Jacobi, Commerce has previously relied on “significant net exports (exports minus imports)” and “significant exports to the United States when there was no information showing worldwide production of subject merchandise or production figures in potential surrogate countries.” Jacobi Mem. at 19 (citation omitted). Jacobi points to the statute’s legislative history, which states that “[t]he term ‘significant producer’ includes any country that is a significant net exporter and, if appropriate, Commerce may use a significant net exporting country in valuing factors.” Id. at 19 (quoting Conference Report to the 1988 Omnibus Trade & Competitiveness Act, H. R. Conf. Rep. No. 100-576 at 590). Jacobi asserts that Thailand is not a significant producer because it had insignificant net exports in terms of quantity, negative net exports in terms of value, and insignificant exports to the United States. Id. at 20; see also Jacobi Reply at 12 (had Commerce relied on net exports, “Thailand would have failed the ‘significant producer’ requirement”).

Commerce responds that it need not select “the most significant producer.” Gov. Resp. at 32. Commerce asserts that although “ ‘significant producer’ includes any country that is a significant net exporter,” the term is not limited to net exporting countries. Id. at 32. Moreover, because the legislative history does not define “net exporter” in terms of quantity, value, or both, Commerce argues, pursuant to Chevron the court must “defer to Commerce’s reasonable interpretation of the statutory provision.” Id. at 33 (citing Fresh Garlic I, 121 F.Supp.3d at 1338). Commerce contends it “exercised its discretion to define ‘significant producer’ based on export quantity rather than value,” and notes that Thailand ranks ninth out of 27 activated carbon exporting countries. Id. at 34 (citing Global Trade Atlas Reporting Country Export Statistics).

Calgon argues that of the countries OP considered economically comparable to the PRC, Thailand is the largest exporter of activated carbon. Calgon Resp. at 16-17 (citing Prelim. I & D Mem. at 16 and Pet’rs’ Comments on Surrogate Country Selection (Nov. 12, 2014) (“Pet’rs’ SC Comments”) at 3, PJA Tab 5, PR 179, ECF No. 85-1). Calgon further argues there is record evidence of significant production of activated carbon by Gigantic and Carbokarn. Calgon Resp. at 17-18.

1. Legal Framework

Neither the statute nor Commerce’s regulations define “significant producer.” See 19 U.S.C. § 1677b; 19 C.F.R. § 351.408; Policy Bulletin 04.1 at 3. Because the term “is not statutorily defined, and is inherently ambiguous,” the court must assess “whether Commerce’s definition of significant producer is based on a permissible construction of the statute.” Fresh Garlic I, 121 F.Supp.3d at 1338 (internal quotation marks and citation omitted); see also United States v. Eurodif S.A., 555 U.S. 305, 316, 129 S.Ct. 878, 172 L.Ed.2d 679 (2009) (“[W]hen the Department exercises [its authority pursuant to § 1677(1) ] in the course of adjudication, its interpretation governs in the absence of unambiguous statutory language to the contrary or unreasonable resolution of language that is ambiguous.”) (citation omitted).

In Fresh Garlic I, the court opined that an interpretation of ‘significant producer’ countries as those whose domestic production could influence or affect world trade would be a permissible construction of the statute. This follows from the plain meaning of the word ‘significant’ as something ‘having or likely to have influence or effect.’ This definition, however, necessarily requires comparing potential surrogate countries’ production to world production of the subject merchandise.

121 F.Supp.3d at 1338-39 (citation omitted). Agency policy is consistent with Fresh Garlic I. See Policy Bulletin 04.1 at 3 (“[A] judgement [sic] should be made consistent with the characteristics of work production of, and trade in, comparable merchandise.”). Accordingly, whether production is “significant” is a case-specific determination based on the “totality of the circumstances.” See Dorbest Ltd. v. United States, 30 C.I.T. 1671, 1683, 462 F.Supp.2d 1262, 1274 (2006); Policy Bulletin 04.1 at 3.

2. Commerce’s Determination that Thailand is a Significant Producer Lacks Substantial Evidence

In the Issues and Decision Memorandum, Commerce identified Thailand as a significant producer on the basis of its total export quantities. Final I & D Mem at 7 (citing Global Trade Atlas Reporting Country Export Statistics). Commerce explained that it “prefer[s] to consider quantity, rather than value, in determining whether a country is a significant producer” because “the fact that a country is not a net exporter of a particular product, in value terms, does not necessarily mean that the country is not a significant producer of that good, given that the country could import more higher-valued products than it exports.” Id. at 7 (emphasis added).

Commerce’s reasoning falls short for several reasons. First, Commerce does not explain whether Thailand actually imports more higher-valued goods than it exports. Second, Commerce relied on Thailand’s total exports—not net exports—to find that it is a “significant producer.” Thus, Commerce’s rationale for disfavoring net value as a measure of significant production does little to support (or explain) its preference for considering total export quantities. Finally, Commerce’s reasoning fails to persuade that reliance on total exports, devoid of evidence of influence on world trade, is a permissible method of interpreting the term “significant producer,” and, thus, identifying significant producer countries. See Chevron, 467 U.S. at 843, 104 S.Ct. 2778; Fresh Garlic I, 121 F.Supp.3d at 1338-39. The record evidence Commerce relies on demonstrates the inadequacy of its justification.

In 2013, Thailand exported 7,871,321 kilograms of activated carbon. See Global Trade Atlas Reporting Country Export Statistics; Final I & D Mem. at 7 n.24. However, the court’s calculations show that Thailand’s proportion of 2013 global exports (which collectively equaled 554,263,223 kilograms) was just 1.4% including the PRC, and 2.6% excluding the PRC. See Global Trade Atlas Reporting Country Export Statistics. Commerce has not explained the significance of Thailand’s contribution to global exports sufficiently well so as to enable the court to conclude that its determination that Thailand is a “significant producer” is supported by substantial evidence. See generally Final I & D Mem. at 7-8; cf. Fresh Garlic Producers Ass’n v. United States (“Fresh Garlic II’), 40 CIT -, -, 180 F.Supp.3d 1233, 1244 (2016) (noting the Philippines represented 0.2% of fresh garlic exports excluding the PRC, and Commerce’s failure to explain how “such data [was] suitable for a fair comparison between export price and normal value”).

Nor is Commerce’s post hoc argument that Thailand ranks ninth out of the 27 activated carbon exporting countries included in its data set sufficient. See Gov. Resp. at 33-34 (citing Global Trade Atlas Reporting Country Export Statistics); Burlington Truck Lines, Inc., 371 U.S. at 168-69, 83 S.Ct. 239. Although Policy Bulletin 04.1 contemplates that in the event there are “ten large producers and a variety of small producers, ‘significant producer’ could be interpreted to mean one of the top ten,” Policy Bulletin 04.1 at 3, Commerce has not established that that is the situation here. In fact, there appears to be no clear delineation between the top ten and remaining exporters; rather, the top five exporters (China, India, United States, the Philippines, and Indonesia) collectively account for more than 90% of global exports. See Global Trade Atlas Reporting Country Export Statistics. Thereafter, listed countries contribute relatively little to global exports. See id. (Canada, for example, is the sixth largest exporter and is responsible for just 1.8% of global exports). Further, the mere fact of Thailand’s ranking on a list of exporters does not override Commerce’s responsibility to explain, with substantial supporting evidence, the significance of that ranking in terms of its effect on global trade. Cf. Fresh Garlic II, 180 F.Supp.3d at 1243 (“Determining that because the Philippines is in the top half of fresh garlic producers it is a significant producer is arbitrary and unreasonable.”). Accordingly, the court remands this issue for reconsideration and further explanation.

d. Data Quality/Surrogate Value Selections

Plaintiffs present several challenges to Commerce’s selection of a Thai financial statement to value financial ratios and Thai HS code 4402.90.1000 to value carbonized material. See Jacobi Mem. at 24-30, 34—44; CATC Mem. at 7, 9-18.

To value the NME respondent’s factors of production, Commerce must select the “best available information” from one or more market economy countries that are economically comparable to the NME country and are significant producers of comparable merchandise. 19 U.S.C. § 1677b(c)(1)(B), (c)(4). Because the court is remanding the issues of economic comparability and significant production to the agency, on remand, Commerce may decide to select a different country as the primary surrogate country and, thus, may need to reconsider its surrogate value selections. This is particularly true given Commerce’s regulatory preference for using data from a single surrogate country. See 19 C.F.R. § 351.408(c)(2). Accordingly, to avoid rendering an essentially advisory opinion, the court defers consideration of Plaintiffs’ surrogate value challenges pending the results of the redetermination.

B. Adjustment for Chinese Value Added Tax

Plaintiffs contend that Commerce lacks authority to deduct irrecoverable VAT from Jacobi’s U.S. sales price, and Commerce’s method of calculating the VAT adjustment is not supported by substantial evidence. Jacobi Mem. at 44; CATC Mem. at 18; Huahui Mem. at 2; GDLSK Mem. at 7. Commerce contends its deduction of irrecoverable VAT from Jacobi’s CEP was lawful and supported by substantial evidence. Gov. Resp. at 54; see also Calgon Resp. at 44.

i. Overview of Commerce’s VAT Adjustment

Pursuant to 19 C.F.R. § 351.401 and a 2012 change in methodology for calculating export price or CEP, Commerce generally will deduct price adjustments “that are reasonably attributable to the subject merchandise.” 19 C.F.R. § 351.401(c); Methodological Change for Implementation of Section 772(c)(2)(B) of the Tariff Act of 1930, as Amended, In Certain Non-Market Economy Antidumping Proceedings, 77 Fed. Reg. 36,481 (Dep’t Commerce June 19, 2012) (“Methodological Change”); Final I & D Mem. at 17. Finding that “[t]he PRC’s VAT regime is product-specific [and, thus, ‘attributable to the subject merchandise’], with VAT schedules that vary by industry and even across products within the same industry,” Commerce applied a 17% “irrecoverable VAT” adjustment to Jacobi’s CEP for activated carbon. Final I & D Mem. at 16-17 & n.67 (citing Jacobi’s Suppl. Sect. C Resp. (Oct. 21, 2014) (“Jacobi Suppl. Sect. C Resp.”), Ex. SC-54 (“Chinese VAT Regulations”), CJA Tab 2, CR 124, CR 133, ECF No. 86.).

Commerce’s adjustment for irrecoverable VAT consists of two steps: “(1) determining the irrecoverable VAT on subject merchandise, and (2) reducing U.S. price by the amount determined in step one.” Final I & D Mem. at 17. Commerce defines “irrecoverable VAT” as “(1) the FOB [‘free on board’] value of the exported good, applied to the difference between (2) the standard VAT levy rate and (3) the VAT rebate rate applicable to exported goods.” Id. “The first variable, export value, is unique to each respondent while the rates in (2) and (3), as well as the formula for determining irrecoverable VAT, are each explicitly set forth in Chinese law and regulations.” Id. Here, the PRC levies a 17% VAT on inputs and raw materials used in the production of activated carbon, for which there is no VAT rebate. Id. at 17 & n.68 (citing Chinese VAT Regulations). Thus, Commerce concluded, “the irrecoverable rate is equal to the full VAT percentage.” Id. at 17.

ii. Parties’ Contentions

Jacobi argues the Chinese VAT is not a statutory “export tax or other charge” and, thus, Commerce lacked authority to reduce Jacobi’s U.S. sales price by the amount of VAT Jacobi paid and was not refunded. Jacobi Mem. at 45-47. Assuming Commerce had such authority, Jacobi contends that Commerce erroneously applied the VAT adjustment to a “fictitious entered value.” Id. at 45, 47-55. CATC adopts Jacobi’s argument, and further contends that a recent case in this court affirming Commerce’s adjustment methodology, Fushun Jinly Petrochemical Carbon Co. v. United States ("Fushun Jinly”), 40 CIT -, 2016 WL 1170876 (2016), did not resolve the issue. CATC Mem. at 18-19; see also Huahui Mem. at 2-3 (Fushun Jinly does not resolve the matter and “was predicated on the particular facts of that case”); GDLSK Mem. at 8 (Fushun Jinly was wrongly decided and did not examine the relevant Chinese regulation). CATC also contends that Commerce erroneously applied the VAT adjustment to Jacobi’s U.S. price, and not the lesser cost of the raw materials upon which Jacobi paid the VAT. CATC Mem. at 21-22.

Commerce argues that it reasonably interpreted an ambiguous statutory pro