Washington (AFP) - US congressional leaders have moved to repeal mandatory country-of-origin meat labeling rules that the WTO said violated trade agreements and permitted Canada and Mexico to levy $1 billion in retaliatory tariffs.

US manufacturers and trade groups hailed the provision in the "omnibus" $1.15 trillion spending bill agreed late Tuesday that is expected to pass Congress by the end of the week.

On December 7 Canada and Mexico, the second- and third-largest US trade partners, won World Trade Organization approval to impose up to $1 billion a year in trade sanctions against the United States over its Country of Origin Labeling (COOL) law requirement on beef and pork.

The policy requires labeling on meat that states where livestock animals are born, where they are raised, and where they are slaughtered.

The labeling law, popular with US consumers for giving greater transparency to their food purchase, was enshrined in the 2002 Farm Bill. Congress strengthened it in 2013, even as Canada and Mexico were challenging the policy at the WTO.

But Ottawa and Mexico City, as well as the US meat industry, have campaigned against COOL as an unfair and costly burden on producers.

The spending bill, according to Senator Barbara Mikulski, vice chairwoman of the Senate Appropriations Committee, will repeal the parts of the COOL law that were ruled discriminatory by the WTO.

Manufacturers, many of whom were concerned about the impact of the punitive tariffs, welcomed the move Wednesday.

"Repeal of these COOL provisions is the only solution remaining that will protect US manufacturing jobs, and we are relieved that this spending deal includes this essential provision," Linda Dempsey of the National Association of Manufacturers said in a statement.

"Manufacturers need to see congressional action quickly to prevent Canadian and Mexican retaliation from being imposed later this month."

The Wine Institute urged Congress to "immediately" approve the bill.

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"At this late date, passage of the omnibus is the only way to guarantee US exports do not suffer devastating losses" from retaliation by Canada and Mexico, it said.

But opponents condemned the repeal as a rollback in consumer protection.

"Unfortunately, Congress bowed to pressure from the meatpackers... in order to obey the dictates of a World Trade Organization ruling," said Food & Water Watch, a Washington-based nongovernmental organization.

"Congress willingly kowtowed to international trade tribunals to gut COOL and even tossed out the labels for ground meats that the WTO ruled were totally trade-legal -- a holiday gift to the meatpacking industry from Congress."