The US commerce department has slashed duties on Canadian softwood lumber imports by nearly half, saving Canada about C$600m a year.
Canada hailed the move as a “positive step” and a sign that America was losing the argument in the long-running dispute, which has so far cost Canadian timber producers about C$5bn in duties.
The commerce department, which had earlier stated its intention to reduce countervailing duties following a recent North American Free Trade Agreement panel ruling, is cutting combined US duties to 10.8% from 20.2%.
Canadian timber producers will see the benefits when the new rate is published in the US Federal Register, expected to be soon.
However, US lumber industry lobby group the Coalition for Fair Lumber Imports suggested the rate was more to do with the effects of the strong Canadian dollar than any tacit admission of defeat by the American authorities.
The reduction in duties has no bearing on the fate of the C$5bn in duties already collected.
Meanwhile, the US suffered another setback after a World Trade Organisation panel rejected the country’s appeal against an earlier ruling that it had failed to comply with WTO decisions in 2003 and 2004.
