Canada is smoldering with anger over Washington's refusal to comply with a landmark ruling of the North American Free Trade Agreement (NAFTA) Wednesday that should have ended the punitive softwood duties on lumber from Canada.

Yet with the world's only superpower as its neighbor and largest trading partner, Canada quickly found itself with few choices but to accept the situation.

The country's premiers and territorial leaders, who are currently in Banff, Alberta for their annual meeting, gave new US ambassador David Wilkins a diplomatic earful on the issue Thursday.

They also signed a resolution, urging Ottawa to take all necessary measures to recover the softwood duties and force Washington to respect the ruling.

"It's time for the Americans to say they're going to live up to their obligations and return the dollars that have been illegally taken from Canadians," said Gordon Campbell, Premier of British Columbia, whose province is the hardest hit by the ongoing dispute.

"How would the Americans feel if we lost and then said, 'We're going to ignore that?'" asked Campbell, adding that it is time Prime Minister Paul Martin raises the issue with US President George W. Bush.

In response, US ambassador Wilkin said "I listened, I heard the concerns."

While pledging to take those concerns back to Washington, he left little hopes that the 5 billion Canadian dollars (about 4 billion US dollars) in penalties collected by Washington in countervail and anti-dumping duties will be returned anytime soon.

"Without a negotiated settlement there will continue to be a myriad of lawsuits as there has been," he said.

On Wednesday, an extraordinary challenge committee of the NAFTA, the final court of appeal under the trade pact, upheld a previous ruling that the US has no legitimate reasons to impose duties on Canadian softwood.

Considered as a binding decision that clearly eliminates the basis for US-imposed duties on Canadian softwood lumber, the ruling is hailed by Canadians as a major victory. But as it did before, Washington refused to honor the ruling, describing it as " largely irrelevant."

The two North American neighbors have been quarreling for years over about 10 billion Canadian dollars (about 8 billion US dollars) in softwood lumber that Canada exports to the United States.

The US government and American lumber industry claim that Canadian producers are unfairly subsidized, which Ottawa denies.

Canada has been fighting the US move through legal channels as well as via high-level negotiations since Washington began collecting the duties in 2002.

Although Canada has won many legal battles under the NAFTA, as well as at the World Trade Organization, the legal triumphs have so far had little real effect on the dispute. The US has insisted that it will only accept a negotiated settlement.

"To thumb its nose at unfavorable NAFTA decisions shows a callous disregard for the rule of law that not only makes a mockery of the pact but undermines the United States' moral authority with its NAFTA partners and international community," said Canada's major newspaper The Globe and Mail in an editorial Thursday.

"The sad fact is, there is not much Canada can do if the United States chooses to ignore the ruling. We lack the economic and political heft to force its hand," the editorial said.

Federal Trade Minister Jim Peterson acknowledged a negotiated deal was the only way to keep the US lumber lobby from triggering new trade complaints.

"Winning this dispute does not preclude them from bringing new lumber actions for subsequent periods," Peterson said Thursday in Ottawa.

Pat Binns, Premier of Prince Edward Island, views the issue from an interesting perspective. "When the elephant rolls over, the mouse gets squashed," he said.

Source: Xinhua