01/23/2012 09:45 EST | Updated 03/24/2012 05:12 EDT

Softwood lumber agreement with U.S. extended

A softwood lumber agreement that settled a long-running dispute between Canada and the U.S. is being extended by two years, the governments said jointly Monday.

Trade Minister Ed Fast and U.S. Trade Representative Ron Kirk made the announcement at a ceremony in Washington, D.C., assuring some level of peace in what has been the most serious irritant in the generally good relationship between the two countries.

The countries decided in December that an extension of the current seven-year agreement would be preferable to new negotiations, but they delayed the formal announcement until the two ministers could meet.

The agreement, which ended years of trade battles over duties and other barriers to selling the wood, was due to expire in 2013, but will be extended until 2015.

The agreement was signed in 2006 and revoked U.S. countervailing measures. The deal returned to Canadian exporters more than $4.5 billion in tariffs collected by the U.S. It also set export charges for Canadian companies when the lumber price dropped below a certain amount.

Fast said the government wants to expand the forestry market, particularly in Asia.

"Already, Canadian lumber exports are arriving in China in record numbers, thanks in part to our government's support for building the Asia-Pacific Gateway, and our ambitious plan to diversify our markets," Fast said.

"However, the U.S. will always be Canada’s No. 1 trading partner."

Not all disputes were resolved under the agreement, with American companies taking Canadian companies to international arbitration in London in 2011. The three-member European panel is expected to rule in the fall of 2012.

Fast said he's confident Canada will win that dispute.