(b) the expression "a reasonable amount for profits", in relation to any goods, means an amount equal to

(i) where the exporter has made in the country of export a number of sales of like goods for use in the country of export, and where those sales when taken together produce a profit and are such as to permit a proper comparison, the weighted average profit made on the sales, …

Section 13 of the SIMR clarifies the scope of the “like” goods to be considered by the Commissioner in making its calculations under paragraph 11(1)(b) of the SIMR. Section 13 of the SIMR reads as follows:

13. For the purposes of paragraph 11(1)(b),
 
(a) sales that are such as to permit a proper comparison are sales, other than sales referred to in paragraph 16(2)(a) or (b) of the Act, that satisfy the greatest number of the conditions set out in paragraphs 15(a) to (e) of the Act, taking into account subsection 16(1) of the Act;
 
(b) the price of like goods shall be adjusted in the manner provided for in sections 3 to 10; and
 
(c) the price of goods of the same general category or of goods of the group or range of goods that is next largest to the category referred to in subparagraph 11(1)(b)(iv) shall be adjusted in the manner provided for in sections 3 to 10, and for that purpose the expression "like goods" shall be read as "goods of the same general category" or "goods of the group or range of goods that is next largest to the category referred to in subparagraph 11(1)(b)(iv)", as the case may be, wherever that expression occurs in those sections.

Paragraph 13(a) of the SIMR identifies categories of sales of the exporter in the domestic market that the Commissioner is required to disregard in calculating “amounts for profits”. In this instance, the Commissioner excluded from its profit calculations categories of sales covered in paragraphs 16(2)(a) and 16(2)(b) of the SIMA, notably sales to a single purchaser and sales at below cost.
 
Using the same methodology for all three categories, the Commissioner calculated “an amount for profit” separately for subject refrigerators, dishwashers and dryers. The amounts calculated were, in the case of Whirlpool, significantly higher for dishwashers and dryers than for refrigerators.
 
The Commissioner argues that its approach was appropriate and entirely consistent with the legislation. The Commissioner explained the basis of its calculations under subparagraph 11(1)(b)(i) of the SIMR as follows:

(i) The Commissioner accepted as reasonable, the costs and sales data provided by Whirlpool in its response to the “Request for Information” for a selected group of major domestic customers;
 
(ii) The Commissioner then conducted the profitability test called for under paragraph 16(2)(b) of the SIMA and excluded those sales that were found “below cost”;
 
(iii) The Commissioner next excluded certain sales made to a single purchaser as provided for in paragraph 16(2)(a) of the SIMA; and
 
(iv) The remaining sales met the requirements of sub-paragraph 11(1)(b)(i) of the SIMR and were used to determine a “reasonable amount for profit”.

In their written and oral representations to the Panel, Camco and WCI supported the position of the Commissioner.
 
In its essence, the complaint of Whirlpool and Inglis is that the “amount for profits” derived by the Commissioner as a result of the application of the methodology prescribed in the SIMR manifestly failed to meet a standard of “reasonable” as incorporated in the SIMA itself.
 
Whirlpool and Inglis argue that if the calculations conducted under paragraph 11(1)(b) of the SIMR result in a manifestly “unreasonable” amount, the Commissioner is obliged to use some alternative method of calculating profit to achieve the purposes of the reasonableness requirement of paragraph 19(b) of the SIMA. In oral argument, counsel for Whirlpool and Inglis argued that subparagraph 11(b)(i) of the SIMR constitutes a guideline to follow and that it does not take away the basic obligation that the result be reasonable. In other words, subparagraph 11(b)(i) provides the Commissioner with a methodology to follow to develop a reasonable number, but the number still has to be reasonable given the ordinary meaning of the word.
 
Whirlpool and Inglis base their arguments, in part, on the doctrine that regulations are subordinate to and must be applied in a manner consistent with the purposes of their enabling statute. In accordance with this view, if the application of methodology permissible under a regulation results in a determination that, on its face, conflicts with the provisions of the enabling statute, the latter must prevail. In the present case, Whirlpool and Inglis would argue, if the SIMR calculations result in an amount for profit that is not reasonable, the provisions of the SIMA that require a “reasonable” amount must override the mechanical calculations set out in the SIMR. Camco disputes the representation of the relationship between the SIMA and the SIMR put forward by Whirlpool and Inglis. This Panel does not find it necessary in this context to enter a discussion on the hierarchical relationship between SIMA and the SIMR. The Panel has instead addressed the merits of the argument in the context of the total statutory organization and finds the following features of the SIMA and the SIMR relevant:

(i) Paragraph 97(1)(e) of the SIMA empowers the Governor in Council to make regulations defining the expression “a reasonable amount for profits” for the purpose of paragraph 19(b) of the SIMA;
 
(ii) Subsection 11(1) of the SIMR reads, in part, as follows:

11. (1) For the purposes of paragraph 19(b) and subparagraph 20 (1)(c)(ii) of the [SIMA],
 
…
 
(b) the expression “a reasonable amount of profits”, in relation to any goods, means the amount equal to ….
 
[emphasis added];

(iii) Neither the SIMA nor the SIMR identify any other standards of reasonableness that could constitute a yardstick for assessing the correctness of a determination under subparagraph 11(1)(b)(i) of the SIMR; and
 
(iv) No alternative method for determining “a reasonable amount for profits” appears in either the SIMA or the SIMR.

From the legislative organization, it is clear that the only possible meaning of “reasonable amount for profits” for the purposes of the SIMA is the amount derived from the proper application of the statutorily prescribed methodology itself.
 
Having been left unconvinced by the arguments of Whirlpool and Inglis, the Panel declines to remand on this issue.

(f) Consideration of Inappropriate Costs in Calculating Export Prices under Section 25 of SIMA.

As discussed in the preceding section, the Commissioner computed the export price of subject goods according to the constructed price method prescribed in section 25 of the SIMA. Because subject goods were sold by importer Inglis to arms-length purchasers in the same state as they were imported, the Commissioner employed the methodology of paragraph 25(1)(c). Under this provision, the Commissioner determines a “constructed” price for exports by deducting from the arms-length sales prices of the importer, those costs incurred by the exporter and importer that are additional to those incurred in sales of like products in the domestic market of the exporter.  
 
Whirlpool and Inglis, raise two distinct issues in relation to the “constructed” “sales price minus” methodology employed by the Commissioner. Whirlpool and Inglis argue that:

(i) The Commissioner exceeded its statutory jurisdiction in deducting general selling and administrative expenses incurred by Inglis; and
 
(ii) The Commissioner incorrectly applied the law in the allocation of general selling and administrative expenses of Inglis to ”subject” goods.

Whirlpool and Inglis argue that, because general selling and administrative expenses are not identified in the list of costs enumerated in paragraph 25(1)(c) of the SIMA, the Commissioner erred in including them in the aggregate amount of costs.
 
Whirlpool and Inglis contrast the wording of paragraph 25(1)(c) of the SIMA, which applies to goods which are sold in Canada in the same condition in which they are imported and which does not explicitly refer to selling and administrative costs, with the wording of paragraph 25(1)(d) applying to goods that are further processed in some way after importation and which explicitly refers to selling and administration costs. Whirlpool and Inglis argue that, according to the rules of statutory interpretation, the textual differences between paragraphs 25(1)(c) and 25(1)(d) must reflect an intention of Parliament to allow for the deduction of general selling and administrative expenses when conducting the analysis prescribed in paragraph 25(1)(d), but not when conducting the analysis prescribed in 25(1)(c). At the very least this difference in wording would, in the view of Whirlpool and Inglis, suggest that not all selling and administrative costs should be deducted.
 
The Commissioner, supported in this instance by Camco, argues that the deduction of Inglis’ general selling and administrative costs is implicitly contemplated in the language of subparagraph 25(1)(c)(i) of the SIMA which refers to “all costs” incurred on or after importation of the goods and on or before their sale by the importer, or resulting from their sale by the importer.
 
The Panel considered the argument by Whirlpool and Inglis that the textual differences between paragraphs 25(1)(c) and 25(1)(d) of the SIMA indicated Parliamentary intention to prescribe distinct methodologies for constructing an “export sales price” for products sold in the same condition in which they were imported and those that had been processed in some way before sale to an arms-length purchaser. The Panel notes that because they deal with different situations, it is to be expected that the wording of paragraphs 25(1)(c) and 25(1)(d) would differ. Cost deductions made under paragraph 25(1)(d) would need to capture the additional costs incurred and profit realized by the vendor in the processing of the imported goods. These additional costs and this profit are covered in subparagraphs 25(1)(d)(i) and 25(1)(d)(ii) which reflect the fact that the vendor would incur distinctive sales and administrative costs arising from processing and, consequently, derive profits therefrom. Aside from those differences, the additional costs incurred by the exporter in exporting and the general selling and administrative costs arising for the importer should be the same and are covered in almost identical terms in paragraphs 25(1)(c) and 25(1)(d).
 
Whirlpool and Inglis suggest that an interpretation that allows for an all inclusive nature of the costs referred to in subparagraph 25(1)(c)(i) of the SIMA would have the effect of reading out all the words in clauses 25(1)(c)(i)(A) and 25(1)(c)(i)(B) and that this would be contrary to the intent of Parliament which chose to add the limiting language of clauses 25(1)(c)(i)(A) and 25(1)(c)(i)(B). This Panel is not convinced of this conclusion. In its arguments, Camco does not rely uniquely on the term “all costs” to support the inclusion of selling and administrative costs. Camco explicitly incorporates the qualifying language of 25(1)(c)(i)(A) and 25(1)(c)(i)(B) in the statutory references that it relies on to justify the Commissioner’s deduction of the importer’s selling and administrative costs. This Panel likewise considers that the Commissioner’s inclusion of importer’s selling and administrative costs in the deductions to be made under 25(1)(c)(i) is fully consistent with a deduction of “all costs” even when this is qualified by the text of clauses 25(1)(c)(i)(A) and 25(1)(c)(i)(B) of the SIMA.
 
In summary, this Panel is not convinced by the arguments of Whirlpool and Inglis regarding the deductibility of selling and administrative costs under paragraph 25(1)(c) of SIMA. This Panel finds no reason to remand on this issue.
 
In their reply brief and in oral proceedings, Whirlpool and Inglis, argued in the alternative that certain of Inglis’ general selling and administrative costs were unrelated to importation and should not have been considered by the Commissioner in calculating a constructed export price for subject goods, and even where such attribution was permissible, the Commissioner erred in the proportion of costs actually attributed to subject goods. Counsel for Whirlpool and Inglis suggested that the expense of carrying costs for Inglis’ headquarters in Mississauga, Ontario, depreciation on that building, the salary of the company’s President and costs related to the employee cafeteria were included and should not have been.
 
Whirlpool and Inglis argued that the Commissioner should have limited deductions under paragraph 25(1)(c) of the SIMA to those costs of importers that confer a benefit on the arm’s length purchaser. Such “benefit” being defined as the saving to the purchaser of expenditures that it would incur in importing directly from the exporter Whirlpool rather than purchasing imported Whirlpool products from the importer Inglis. The argument here implies that the arm’s length purchaser enjoys no cost savings when purchasing from Inglis at prices that reflect Inglis’ selling and administrative costs that, accordingly, should be disregarded by the Commissioner in its “re-sale price minus” analysis.
 
The Commissioner indicates that it verified and accepted data provided by Inglis in allocating general selling and administrative expenses to the subject goods. Whirlpool and Inglis suggest that the Commissioner relied only upon the information provided by Inglis in response to the Commissioner’s initial request for information and should have sought further information in a format more amenable to precise allocation of costs between subject goods and other products handled by Inglis. Whirlpool and Inglis do not however point to any evidence in the record to support their allegations that the cost data provided in the initial request for information failed to meet the needs of the Commissioner in conducting the analysis required under paragraph 25(1)(c) of the SIMA, or that the actual allocation of selling and administrative costs by the Commissioner to subject goods was unreasonable or resulted in prejudice to Whirlpool and Inglis.
 
In considering this issue, this Panel accepted that as Inglis sells a wide range of appliances and manufactures certain cooking products, subject goods represent only a portion of total sales and that it is incumbent upon the Commissioner to ensure that deductions for general selling and administration costs result from a proper attribution of these costs to subject goods. The Panel finds unconvincing the economic rationale for the “benefit to purchaser” line of reasoning. Inglis’ selling and administrative costs are incurred on activities of Inglis that, if profitable, will be incorporated in the sales price to an arm’s length purchaser. Moreover, this Panel has been provided with no authority which supports the argument that the Commissioner undertake a “benefit to purchaser” analysis when determining costs to be deducted under paragraph 25(1)(c) of the SIMA.
 
Having said that, this Panel was not directed to any evidence on the record that the Commissioner actually attributed improper costs to subject goods, or that anything other than a de minimis result occurred if the Commissioner did so. Accordingly this Panel is not convinced of the need for a remand on this issue.
 
(g) Consideration of Undumped Goods – the “Zeroing Issue” 

Whirlpool and Inglis, in their complainants’ brief and in oral argument before this Panel, alleged that the Commissioner committed errors in calculating the margins of dumping for the subject goods. Subsection 30.2(1) of the SIMA reads as follows:

30.2 (1) Subject to subsection (2), the margin of dumping in relation to any goods of a particular exporter is zero or the amount determined by subtracting the weighted average export price of the goods from the weighted average normal value of the goods, whichever is greater.

Whirlpool and Inglis argue that the Commissioner erred when it, according to their submissions, calculated the margin of dumping for each subject product without offsetting transactions where export price was greater than normal value against those transactions where export price was less than normal value. Whirlpool and Inglis assert that the sales where the export price was greater than normal value should have been included in calculating the margin of dumping in respect of the category of subject goods as a whole. They argue that the “zeroing” called for by subsection 30.2(1) of the SIMA only occurs if the aggregate margin of dumping determined for the category of subject goods as a whole is less than zero.
 
During oral hearings, counsel for Camco pointed out to this Panel that Whirlpool and Inglis had not raised the “zeroing” issue in their complaint filed on September 11, 2000, and that the first reference to the issue appeared in the complainants’ brief filed by Whirlpool and Inglis on or about March 29, 2001. Pursuant to section 7 of the Rules of Procedure, this Panel’s review of the Final Determination shall be limited to the allegations of error of fact or law, including challenges to the jurisdiction of the Commissioner, that are set out in the complaints filed in the panel review and procedural and substantive defenses raised in the panel review. During oral hearings, the Panel reserved judgment as to whether this matter was properly before it and heard oral arguments on the issue from all parties.
 
On an in depth review of the complaint filed by Whirlpool and Inglis on September 11, 2000 and of the Rules of Procedure, the Panel has decided that the “zeroing” issue was not raised by Whirlpool and Inglis prior to the filing of their complainant’s brief with this Panel. Moreover, there does not appear to be any method under the Rules of Procedure or otherwise that would permit Whirlpool and Inglis to amend their complaint.
 
The Panel has decided that, despite its receiving thorough written and oral argument on the matter, the “zeroing” issue was not properly before it as it was not raised in the original complaint filed by Whirlpool and Inglis and, consequently, this Panel will not deliver a decision on the issue.
  
(h) Conclusion 

This Panel has carefully reviewed the complaint and written briefs filed by Whirlpool and Inglis in respect of the Final Determination, and has heard oral arguments on behalf of Whirlpool and Inglis. Having carefully considered each of the arguments raised by Whirlpool and Inglis in their complaint with respect to the Final Determination, and having determined that, with respect to each, no remand was required, this Panel dismisses the complaint filed by Whirlpool and Inglis on September 11, 2000.

VI. DECISION OF THE PANEL

In light of the conclusions of this Panel, made in respect of each of the issues set out above, the Panel hereby dismisses the complaints filed by each of Camco and Whirlpool and Inglis, and declines to order a remand in respect of any aspect of the Final Determination. The Panel directs the Canadian Secretary of the NAFTA Secretariat to issue a Notice of Final Panel Action pursuant to Rule 77 of the NAFTA Rules of Procedure for Article 1904.
 

SIGNED IN THE ORIGINAL BY: