The United States Tuesday announced that it will cut its duties on imports of Canadian softwood lumber in line with a ruling by a North America Free Trade Agreement (NAFTA) panel.

Earlier this year, the NAFTA panel ruled that imports of Canadian softwood lumber had not harmed the US lumber industry and the United States should calculate the duty on softwood lumber from Canada at a rate of 0.8 percent.

"We have serious concerns about the panel's decision. However, consistent with our NAFTA obligations, we have complied with the panel's instructions," said US Secretary of Commerce Carlos Gutierrez.

The announcement means that the United States will reduce its punitive duties, which have been imposed since May 2002 and averaged at about 16 percent, to less than one percent.

However, the United States at the same time said that it will keep collecting punitive tariffs on Canadian softwood lumber until a "final" decision on the trade dispute by the NAFTA panel. There will be a public comment period of up to 45 days before a final ruling.

The United States also said it retains the right to appeal the NAFTA ruling.

"We will continue to enforce our trade laws to ensure that US industry receives relief from unfair imports and we are reviewing all options to do so," Gutierrez said.

The NAFTA groups Canada, Mexico and the United States. Canadian softwood accounts for about one-third of the US market. Accusing Canada of subsidizing its lumber industry, the United States imposed the punitive tariffs more than three year ago.

Source: Xinhua