The panel reversed an earlier WTO ruling which said America had complied with international trade rules in setting duties on Canadian lumber imports.
The WTO said the earlier ruling had applied an “improper” standard of review in its assessment of US duties.
But the Canadian victory was tempered by the WTO’s failure to recommend Canada’s request to impose up to C$3.6bn in counter duties against US imports.
Canada has filed about six other lumber dispute cases before other trade panels and courts.