The U.S. ambassador wants Canada to reconsider its decision to cancel talks aimed at settling the softwood lumber trade dispute.

"We want finality to it," Ambassador David Wilkins said in an interview from Toronto on Thursday.

"Unfortunately, Canada decided to discontinue those talks at least temporarily. We hope to have those renewed and we hope to continue to work on a negotiated settlement."

The two sides had been planning to meet Monday, in the hopes of settling the ongoing dispute over softwood lumber.

But, bristling from the U.S. refusal to abide by last week's pro-Canada NAFTA ruling, on Wednesday federal Trade Minister Jim Peterson said the meeting would be put on hold.

While Ottawa claims the U.S. is exploiting legal loopholes to avoid cancelling tariffs on imported wood -- not to mention the rebate of $5 billion in duties collected since 2002 -- the Americans are standing firm.

According to U.S. trade officials, when they moved last fall to comply with a World Trade Organization ruling on softwood duties, the recent NAFTA challenge was rendered redundant.

"The ruling that came out last week was only (based on) 2002 rules," Wilkins told CTV's Canada AM early Thursday.

"We have been operating under 2004 NAFTA ruling for over a year now, and we will continue to operate and follow those rules."

Canadian exports, totalling about $10 billion a year, comprise approximately one-third of the U.S. lumber market.

In the U.S., producers have long complained that government policy effectively subsidizes the cost of Canadian wood.

Ottawa has steadfastly disagreed, and in the face of a series of favourable trade panel rulings -- all of which have gone unheeded by the U.S. -- it has threatened to escalate reaction.

Among the options being weighed are a new export tax on oil and gas exports or retaliatory duties on a range of U.S. imports.