[JURIST] The US Court of International Trade [official website] ruled [opinion, PDF] Friday that the US must abide by a North American Free Trade Agreement [text] panel ruling that improper duties were levied on Canadian softwood lumber used in US housing construction jobs. The president of the British Columbia Lumber Trade Council [trade website], John Allan [profile], said $1.2 billion in duties collected by the US since November 2004 would need to be refunded as a result of the ruling. The court is still considering what action to take on the $3.4 billion in duties paid by Canada before November 2004.

The court's ruling is expected to have an effect on a softwood lumber trade agreement [PDF] that Canada and the US initialed [Canada PM press release] earlier this month, but which the Canadian lumber industry has been hesitant to approve. The 7-year deal intended to end the long-running softwood lumber dispute [CBC backgrounder] between the two countries would reimburse $4 billion to Canada but would allow US lumber producers to keep $1 billion. Canadian critics say their government was too lenient in drafting the deal and lumber industry members have specifically opposed a clause that would give the US the option to walk away and re-impose duties. Reuters has more.