WASHINGTON — The United States and Canada announced an agreement yesterday to settle a drawn-out and heated trade battle over softwood lumber, a major home-building component.

The U.S. timber industry said it could support the accord, but Americans should not expect a price break from the deal when they pay for their new houses.

The agreement was announced at a joint U.S.-Canada news conference at the Canadian Embassy.

"This agreement is an historic opportunity to resolve a dispute that has lasted for more than two decades," U.S. Trade Representative Rob Portman said.

Canadian Trade Minister David Emerson called the deal "a watershed moment" in trade relations between the two nations.

"Today is a great day for Canada," Canadian Prime Minister Stephen Harper declared in the House of Commons, where he received a standing ovation when he announced the agreement.

Harper, who took office in February as the Conservative Party returned to power for the first time in more than 12 years, has sought to resolve the bitter dispute that has strained U.S.-Canadian relations for at least two decades. Harper and President Bush discussed the matter in a telephone call last weekend.

Aboard Air Force One, en route back to Washington from the Gulf Coast, Bush spoke with Harper, according to White House spokesman Scott McClellan. The two leaders congratulated each other on bringing the long-running dispute to an end, he said.

U.S. tariffs on Canadian lumber started at an average of 27 percent in 2002, but now average 11 percent because of various reviews and trade panel rulings.

The U.S. goal is to keep Canada's share of the U.S. softwood lumber market from exceeding the current level of around 34 percent. However, the deal does not impose any specific cap.

Instead, Canada agreed to impose taxes on its lumber exports to the United States if the price of lumber falls below a specified level. Softwood lumber is currently averaging $370 per 1,000 board feet.

The trigger point for Canadian taxes to be imposed would be about $10 below the current sales price. The tax would start at 5 percent and then go to 10 percent and as high as 15 percent, depending on how low lumber prices fell. The aim of this system would be to protect U.S. producers by boosting the price of Canadian lumber.

Analysts said the sliding scale of Canadian taxes will mean that Americans buying new homes will not get a price break from the deal.

"This is all organized to keep competition down and prices high for U.S. producers," said Gary Hufbauer, an economist at the Institute for International Economics, a Washington think tank.

Said Jerry Howard, executive vice president of the National Association of Home Builders: "For an administration that espouses free trade, there is no logical reason to ... engage in one-sided negotiations that would provide a massive subsidy to the U.S. timber industry at the expense of millions of American consumers."

But lawmakers from timber-producing states praised the agreement.