The US lumber industry has been boosted by a World Trade Organisation (WTO) appeals panel ruling which backs its right to impose countervailing duties on Canadian softwood imports.

The ruling, which reverses an earlier WTO decision that said US duties on Canadian timber were illegal, said timber from Canadian state-owned land could be unfairly subsidised if provincial governments sold it at below market price.

But it said Washington needed to conduct further investigations before it could justify duties on some log imports.

The ruling is the second success for America’s lumber lobby in less than a week. US officials claim a confidential WTO ruling also upheld the anti-dumping duties on Canadian softwood imports.