WASHINGTON, July 27: A World Trade Organization panel has delivered a mixed ruling on a complicated dispute between the United States and Canada over softwood lumber trade, US and Canadian government officials said on Friday.

The ruling will have no immediate impact on punitive duties the United States has leveled against Canadian softwood lumber, which is used for home building and remodeling.

The decision marked another chapter in a decades-long fight between two major trading partners. The United States, with the backing of US timber mills and landowners, has found Canada guilty of exporting a flood of what it calls illegally subsidized wood at below-market prices.

Canada has countered that its lumber industry is merely more efficient and is providing wood varieties that are in short supply in the United States.

Canadian International Trade Minister Pierre Pettigrew called Friday’s decision on the US countervailing duty a “fundamental win for Canada.” He said the US position prevailed on only one “technical” point.

But Washington also boasted of a significant victory in a case involving $6 billion worth of softwood lumber shipped from Canada to the US annually.

A US government official, who asked not to be identified, said the WTO panel favored the United States in the most important respect. That, he said, was the finding that Canada made “financial contributions” to timber sold in the US, thus supporting the US industry claim that the foreign wood is subsidized.

The “confidential” WTO report was not made available to the public.

John Ragosta, a lawyer for the Coalition for Fair Lumber Imports, a US industry group, claimed the “technical” point Pettigrew referred to goes to the heart of the US case.

Canada claimed timber could never be subsidized because it is not a good or service; it’s a natural resource. The WTO said it can be a subsidized good; it can be priced in a manner that it is subsidized, Ragosta said.

The United States has imposed an 18.79 per cent average countervailing duty on Canada’s softwood lumber and an 8.43-per cent anti-dumping duty.

Ragosta indicated he would seek an appeal of the WTO ruling on this point if it is upheld in a final decision this fall. With appeals, the issue could stretch into 2004 or even 2005.

In late March, negotiations collapsed between Ottawa and Washington that were aimed at ending the dispute and the costly litigation both countries are enduring.

The US official said, The United States remains prepared to offer Canadian lumber producers unfettered access to the US market if the provinces implement market-based pricing for sales of timber from public lands.

British Columbia, which provides about half of the softwood lumber Canada exports to the United States, has long favored a negotiated settlement.

John Allan, president of the BC Lumber Trade Council, said in a prepared statement that the WTO ruling is another signal to the US administration to come back to the table with Canada and find a way to work out this dispute so we can repair the relations between our two countries.—Reuters