WASHINGTON (AP) – The Commerce Department said Tuesday it will comply with a NAFTA panel’s order to drastically cut U.S. duties on imports of Canadian softwood lumber.

U.S. officials said they disagree with the rationale behind the ruling, but respect its authority.

The decision, announced late Tuesday, means the United States will reduce the punitive duties, which average about 16 percent, to less than 1 percent. Separate antidumping tariffs averaging about 4 percent will not be affected.

Despite its action, the Commerce Department said it retains its right to appeal the NAFTA ruling, which it considers unfair.

“We start off with a premise that Canada subsidizes lumber,” said John Sullivan, general counsel for the Commerce Department. “That’s been our department’s decision and we have been working off that” basis.

Sullivan said the U.S. would file a motion for clarification in an effort to get the NAFTA panel to better explain its decision.

Tariffs will continue to be collected while the motion is pending, he said.

The Bush administration imposed the tariffs in 2002, accusing Canada of subsidizing its lumber industry. Most U.S. timber is harvested from private land at market prices, while in Canada, the government owns 90 percent of timberlands.

AP-ES-11-22-05 1736EST