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UPDATE 1-Canada to appeal WTO finding in lumber dispute with U.S.

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OTTAWA, April 15 (Reuters) - Canada will appeal last week's decision by a World Trade Organization (WTO) panel to allow the United States to use "zeroing" to calculate lumber anti-dumping tariffs, Foreign Minister Chrystia Freeland said on Monday.

"We firmly believe that the U.S. duties on Canadian softwood lumber are unfair and unwarranted," Foreign Minister Chrystia Freeland said in a statement. "That is why we are challenging these duties at the WTO and under NAFTA."

Canada had launched the technical dispute with the WTO in 2017, saying it would forcefully defend its lumber industry, but last week's long-awaited decision sided with the United States.

The United States had suffered a string of defeats at the WTO over zeroing, a calculation method that was ruled to have unfairly increased the level of U.S. anti-dumping duties.

The U.S. Commerce Department had accused Canada of unfairly subsidizing and dumping softwood lumber, which is commonly used in home construction. Its duties affected about $5.66 billion worth of imports.

Trade tensions between the United States and Canada are heating up again after the two countries together with Mexico signed a free-trade agreement to replace NAFTA last year.

Last week, Canada said it was looking at ways to boost the effectiveness of its retaliatory tariffs against the United States.

Canada imposed tariffs on C$16.6 billion ($12.5 billion)worth of U.S. exports in May 2018 after Washington slapped punitive measures on exports of Canadian steel and aluminum. The initial Canadian list included orange juice, maple syrup, whiskey, toilet paper and a wide variety of other products. (Reporting by Steve Scherer; Editing by Chizu Nomiyama and Jeffrey Benkoe)

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