The B.C. government is claiming what it calls a "total victory" in the latest softwood lumber skirmish with the U.S. after an international court completely dismissed a U.S. complaint.

The United States launched the dispute last year, arguing that B.C. was subsidizing wood damaged by the mountain pine beetle and was selling timber below market value, violating the terms of the Softwood Lumber Agreement..

B.C. argued it had a huge amount of low-grade lumber because of the mountain pine beetle epidemic and denied the province was cheating, saying U.S. producers should have known there would be an effort to clear dead, beetle-infested timber.

On Wednesday the London-based Court of International Arbitration sided with B.C., completely dismissing the American complaint.

B.C. Jobs Minister Pat Bell said the ruling upholds the province's timber-pricing policies and shows the American complaints were unwarranted and groundless.

"This is a total victory for British Columbia and Canada and is great news for B.C.'s lumber workers and their families," said Bell

The federal Minister of International Trade Ed Fast also called the decision "good news for forestry workers in British Columbia."

“We applaud the tribunal’s decision in favour of our lumber industry. This positive outcome is the result of our close collaboration with provincial and industry partners and proof that the SLA is good for Canada’s forestry sector,” said Fast.

The U.S. Lumber Coalition expressed bitter disappointment in the ruling by the London Court of International Arbitration.

"The coalition is very disappointed that the LCIA did not find that compensatory export taxes were justified to collect the export taxes imposed under the SLA that B.C. producers have been effectively evading since 2007," said coalition chairman Steve Swanson, who also runs the family-owned Swanson Group in Oregon.

"While the coalition vehemently disagrees with the LCIA panel conclusion, we respect and appreciate the efforts of this panel and the U.S. government to grapple with the complex issues involved in this case."

Industry observers said the dispute was the most serious to date under the softwood lumber agreement, which is set to expire in October 2015, because it struck at the core of forestry policy and timber pricing.