U.S. appeals at WTO to place Canada lumber case in legal void

BRUSSELS (Reuters) - The United States is appealing at the World Trade Organization against a ruling that largely favoured Canada in a long-running dispute over lumber, putting the case into a legal void.

A three-person WTO panel determined in August that U.S. duties, designed to counter Canadian subsidies on softwood lumber, breached global trading rules.

The United States notified the WTO on Monday that it had decided to appeal.

However, Washington has blocked appointment to the WTO's Appellate Body, leaving it with too few members to hear such appeals. The Canada case will consequently sit in a legal limbo.

The United States said the panel ruling was deeply flawed, adding it was open to discussions with Canada to resolve the dispute.

Canada said that the appeal to a body paralysed by Washington had denied Canada of its rights and compounded the unfair treatment accorded to Canadian softwood lumber producers.

"These duties have caused unjustified harm to Canadian industry and U.S. consumers alike, and are impeding economic recovery on both sides of the border," Canada's trade minister Mary Ng said in a statement, adding Canada would keep challenging the duties through all available avenues.

(Reporting by Philip Blenkinsop in Brussels, additional reporting by Steve Scherer in Ottawa, Editing by Angus MacSwan)