Canada strongly regrets the US delay in action on a ruling by the North American Trade Agreement (NAFTA) to cut duties on Canadian softwood lumber exports, International Trade Minister Jim Peterson said Friday.

"We strongly regret the delay but we are confident the NAFTA panel will act fairly and respond as soon as possible," Peterson said in a statement.

Washington said earlier the day that it needs more time to consider the NAFTA ruling that essentially orders it to eliminate a 16-percent countervail duties on Canada's softwood exports. It's the fifth time the United States has been ordered to cut the duties.

Canada will continue pressing the case through litigation, retaliation and advocacy and it will also continue to seek opportunities in markets elsewhere, said Peterson.

Some government officials responded angrily to the US decision, saying it sends a negative signal as to the prospects of the trade dispute while putting doubt on whether the United States is prepared to live by the NAFTA rules.

"The US has ignored an obvious opportunity to demonstrate good faith and-or indicate that they are prepared to live by the rules of NAFTA," the local media cited an official as saying.

Softwood exporters were dismayed. "I don't think this is the sort of clear signal that Paul Martin and his officials were looking for," said Carl Grenier of the Free Trade Lumber Council, which represents producers across Canada.

"Faced with consistent losses in front of NAFTA panels, the (Department of Commerce) has decided that rather than comply with the legal orders, they will simply use delay tactics to needlessly continue the case," John Allan, president of the British Colombia Lumber Trade Council, said in a news release.

Washington imposed countervailing and anti-dumping duties on Canadian softwood lumber exports in 2002, arguing that Canada unfairly subsidizes its softwood producers. A total of 5 billion Canadian dollars (4.3 billion US dollars) has been collected.

Canada has been fighting the US duties through several channels including NAFTA, which has ruled repeatedly in its favor. But Ottawa's demand for money back and elimination of the duties has all failed.

The increasingly heating dispute has plunged bilateral relations to a new low. Prime Minister Paul Martin called the US position "nonsense" and a "breach of faith," threatening to go to US courts and looking for new markets for Canadian energy.

The issue topped the agenda when US Secretary of State Condoleezza Rice visited Ottawa earlier this week. But it did not make any headway as Rice held firm on the US position that more negotiations are needed.

Source: Xinhua