Canada claimed a victory on Wednesday in a dispute with the United States over softwood lumber, after a tribunal ruled it had not violated a trade accord by selling beetle-blemished logs at low prices.

"We applaud the tribunal's decision in favour of our lumber industry," Trade Minister Ed Fast said in a statement.

An international arbitrator earlier dismissed a US complaint that Canada sold softwood timber from public lands to Canadian lumber exporters for prices below those agreed in a 2006 pact.

The panel heard testimony that an increased harvest and sale of low-value logs from westernmost British Columbia province was due to the devastating impacts of a mountain pine beetle infestation.

The bug (Dendroctonus ponderosae), which is about the size of a grain of rice, has attacked more than 155,000 square kilometers (60,000 square miles) of forests in British Columbia and killed 675 million cubic meters (23.8 billion cubic feet) of timber.

Canada gave a nod to forestry companies to cut down the trees before they rotted and to sell the wood, which is stained blue from a fungus introduced in the sap by the beetles but remains as strong as regular timber.

The trade dispute was the third between the two countries over the 2006 agreement, which was designed to regulate the multi-billion-dollar trade.

In the first case, Canada was ordered to pay tens of millions of dollars in export duties after failing to correctly calculate quotas.

The second case, involving provincial subsidies, resulted in Canada last year increasing export charges on softwood lumber to the United States after an arbitration court ruled it had wrongly subsidized exports.