The latest World Trade Organization (WTO) softwood lumber ruling opens the door for Canada to retaliate against the United States, the country's Department of International Trade said Monday.

A WTO appellate body decided Monday to uphold Canada's position that US procedures used to establish countervailing duties on Canadian softwood lumber imports are inconsistent with trade organization's rules.

As a result, the case now will go to arbitration to determine the amount of retaliation Canada is entitled to in the event the United States does not bring itself into conformity with its WTO obligations, the department said in a news release.

Canada is requesting authorization to retaliate against 200 million Canadian dollars (170 million US dollars) in US goods. Arbitration will begin in early next year, following WTO adoption of the appellate body report.

The ruling is the latest in a see-saw battle of trade litigation stretching back three years since the US Commerce Department slapped duties on Canadian lumber imports it determined were being subsidized mainly through low provincial timber-cutting fees, known as stumpage.

Canada has steadfastly denied the claim and both sides have claimed victories in the legal battle before WTO and North American Free Trade Agreement (NAFTA) panels.

"This is yet another win for Canada,'' International Trade Minister Jim Peterson said in a statement. "The United States must come to terms with the fact that we firmly expect that duties will be returned to Canadians.

Attempts to negotiate a long-term settlement to the dispute, which has been going on in one form or another for more than two decades, have been fruitless.

Canada walked away from talks last summer after the United States signalled it would not comply with a NAFTA ruling that found Canadian lumber posed no threat of injury to American producers.

Canada exports about 10 billion Canadian dollars (8.5 billion US dollars) worth of lumber to the US market annually, mostly for home construction and renovation. Exporters have paid more than 5 billion Canadian dollars (4.3 billion US dollars) in duties since May 2002.

Source: Xinhua