American lumber producers are appealing the U.S. Commerce Department's decision to chop duties on Canadian softwood lumber by almost 50 per cent.

Earlier this month, the department announced it would reduce average duties on Canadian softwood lumber to 10.81 per cent, cutting them almost in half.

Now the U.S. Lumber Coalition is fighting that decision.

The panel under the North American Free Trade Agreement has until Feb. 20 to decide whether it will agree to the coalition's appeal.

Canada has argued the U.S. isn't following proper procedures to determine whether Canadian softwood products are unfairly subsidized and dumped on the U.S. market.

Since 2002, the U.S. has collected $5 billion in penalties from Canadian softwood producers.

Earlier this month, the World Trade Organization issued a ruling that supported Canada's position, saying U.S. methods are inconsistent with international rules.

That ruling allows Canada to retaliate against U.S. goods if it chooses.

The bitter battle over softwood lumber has recently become a fixture in Canada's election campaign.

Last weekend, Conservative Leader Stephen Harper promised to use U.S. tariffs collected as a result of the softwood lumber dispute as security for loans for struggling Canadian producers.

In the days that preceded Harper's announcement, Paul Martin shrugged off a public rebuke from the U.S. Ambassador to Canada David Wilkins over the Liberal leader's criticism of American policy.

"I have been raising the softwood lumber issue ever since I became prime minister, I have been raising the climate change issue ever since I became prime minister," Martin said last week.

"These issues pre-date the election campaign, but if those issues arise, then I will deal with them as they arise. And I am going to call it as I see it."