The Bush administration defended continued tariffs on Canadian softwood lumber imports last week, but said the United States remains committed to a negotiated settlement to end the decades-long dispute.

At a hearing before a Senate subcommittee, US officials said tariffs are necessary to protect US businesses hurt by what they called unfair subsidies from Canada’s provincial governments.

Canada accounts for about one-third of the US market for softwood, which is easily sawed pine, spruce and other wood used in homebuilding.

The Commerce Department, responding to a complaint under the North American Free Trade Agreement, late last year reduced punitive duties from an average of 16% to less than nine percent. Separate antidumping tariffs averaging about four percent were not affected.

US officials took the action under protest and have not ruled out an appeal before a special NAFTA dispute panel.

“The United States will continue to enforce our trade remedy laws vigorously to ensure that US industry is able to compete fairly,” Deputy US Trade Representative Susan Schwab told the Senate Commerce subcommittee on trade. “However, our strong preference is to get off the litigation track and reach a negotiated resolution.”

US Trade Representative Rob Portman called Canada’s new international trade minister, David Emerson, as a courtesy, but did not discuss details, Schwab said. Emerson was appointed earlier this month by newly elected Prime Minister Stephen Harper.

“We’ve stretched our hands” to Canada, Schwab said. “We’ve said we’re interested in negotiations. We’re waiting to hear from the Canadians.”

A spokeswoman for the Canadian embassy in Washington referred calls to the international trade office in Ottawa, which declined immediate comment.

Meanwhile, representatives of the US timber industry told the Senate panel that Canadian subsidies were crippling US businesses and forcing the closure of dozens of US mills.

A representative of the National Association of Home Builders called for an end to US tariffs, which he said have raised the price of a typical US house by at least $1,000.

Steve Swanson, head of The Swanson Group, an Oregon-based lumber company and president of the Coalition for Fair Lumber Imports, a US industry group, said cheap Canadian imports have resulted in the loss of thousands of American jobs.

Sen. Gordon Smith, R-OR, the subcommittee chairman, said mills in Oregon and other states can compete against anyone in the world, as long as there’s a level playing field.

“They can’t compete against the Canadian government,” he said.

Sen. Olympia Snowe, R-Maine, agreed. “Where we stand today is unacceptable,” she said. (Newswire)