NEW YORK (CNNMoney) -- The World Trade Organization (WTO) flipped its stance in the longstanding lumber dispute between the United States and Canada and ruled that the U.S. violated international free trade laws by imposing "anti-dumping" duties on Canadian lumber imports.

In April, a WTO panel let stand the United States International Trade Commission's (ITC) claim that dumped and subsidized Canadian lumber threatened the U.S. lumber industry.

Canada has opposed the tariffs and accused the United States of breaching fair trade agreement.

According to the ITC, the U.S. has collected about $5 billion in duties on softwood lumber imports from Canada since 2002. Total Canadian lumber imports to the United States totaled more than $7 billion in 2005, representing two percent of Canada's total exports to the United States.

In its latest ruling Tuesday, a WTO panel determined that the U.S. practice of using so-called "zeroing" methodology to calculate dumping margins to determine tariffs is unfair and "inconsistent" with WTO's anti-dumping agreement.

However, the WTO's ruling comes after the United Stated and Canada last month agreed to end their decades-long trade dispute. According to the U.S. Trade Representative's (USTR) office, U.S. and Canadian officials are expected to sign the trade accord later this month.

The USTR and the Canadian Department of International trade could not immediately be reached for comment.

U.S. lumber industry trade group, the Coalition of Free Lumber Imports, did not immediately return calls for comments.

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