Geneva, August 16:

The WTO has reversed its ruling on in a longstanding US-Canadian lumber dispute, and said the United States failed to comply with international trade rules in its calculation of tariffs on lumber imports, according to a report.

The ruling, made public on Tuesday, could be rendered insignificant, however, by a pending agreement between Washington and Ottawa that would settle the trade battle over softwood lumber, a major home-building component.

The ruling by the three-member appeals panel overturned an April finding that found the US had not broken trade rules in calculating what it charges for the imports.

The appeals panel said the US method was inconsistent with the requirement in trade law that calculations be based on a “fair comparison.” “The Appellate Body recommends that the Dispute Settlement Body request the United States to bring its measure into conformity with its obligations under the Anti-Dumping Agreement,” the ruling said.

The WTO was already considering Canada’s appeal when the accord was signed July 1 in Geneva.

Canada has argued that the United States artificially inflated antidumping rates by using a different calculation method to avoid complying with an earlier World Trade Organization decision.

Washington imposed antidumping and countervailing duties totaling more than 27 per cent in May 2002, after accusing Canada of subsidizing its lumber industry.