VANCOUVER, British Columbia (AP) - British Columbia is prepared to cut a separate deal with the United States on softwood lumber if no national settlement is on the horizon, the province's forests minister says.

Mike de Jong said the B.C. Liberal government is still hoping for a national deal to end the longstanding trade dispute.

But asked Friday whether the province was prepared to go it alone, de Jong answered "yes."

U.S. duties have been levied on Canadian lumber exports since 2002.

On Thursday, U.S. Department of Commerce Undersecretary Grant Aldonas said the province and the United States were trying to negotiate a separate softwood lumber agreement.

Aldonas told the Vancouver Sun that negotiations have already begun on a separate agreement but de Jong played down that assertion on Friday.

"It's a bit premature to talk about separate negotiations," de Jong said.

He called the meetings with Aldonas a good exchange designed to show British Columbia is committed to market-based reforms.

"At the same time we're going to be very cautious," de Jong said.

Aldonas made his comments after endorsing the forest policy changes undertaken by the provincial government. He made a field trip to remote forestry operations on Vancouver Island, where British Columbia officials walked him through the details of the province's timber sales program.

Under the new program, data from timber auction prices are used to set stumpage rates on government timber sales, a drastic departure from the old system, where the province set revenue targets.

Aldonas brought Commerce Department officials with him, including a member of the U.S. negotiating team.

Canadian International Trade Minister Jim Peterson has been informed of the British Columbia developments. While he was in Vancouver on Wednesday, Aldonas met privately with B.C. Premier Gordon Campbell and de Jong.

Aldonas said this week he was impressed with how much B.C. reforms have moved to address American concerns and hoped it would be a catalyst to other provinces that have not moved as quickly.

De Jong said he was pleased B.C. market-based initiatives were being recognized. If that put the province in the position of leading the way to a settlement, "then so be it," he said.

British Columbia accounts for 53 percent of Canadian softwood exports to the United States.

While most U.S. timber is harvested from private land at market prices, in Canada the government owns 90 percent of timberlands and charges fees - called stumpage - for logging. The fee is based on the cost of maintaining and restoring the forest.

U.S. timber companies contend that Canada's stumpage fees are artificially low and amount to subsidies that allow Canadian mills to sell wood below market value.

In 2002, the United States imported nearly $6 billion of softwood lumber from Canada - about a third of the American market. Softwood lumber, from pine, spruce and other trees, is a key product in home construction.

Last month, the World Trade Organization sided with Canada, ruling that some of the U.S. duties on Canadian lumber were illegal under international rules. The U.S. government has the right to appeal.