Lawmakers in Ottawa are threatening to impose punitive measures against the U.S. after winning a contentious trade dispute at the World Trade Organization over U.S. meat labelling laws that Canada says have cost the industry as much as $1 billion in lost sales each year.

Agriculture Minister Gerry Ritz and Trade Minister Ed Fast addressed reporters on Tuesday a day after a WTO panel ruled in Canada's favour over a dispute with the U.S. about country-of-origin labeling on meat products dating back to 2008.

The WTO panel deemed the U.S. law discriminatory and protectionist for the fourth and final time.

"The United States has used and exhausted all possible means to avoid their international obligations, damaging our highly integrated North American supply chain, hurting producers and processors on both sides of the border," the government of Canada said in a release.

Under WTO rules, Canada and Mexico — another country that had opposed the measures — are allowed to move swiftly to impose punishments, which could likely take the form of retaliatory tariffs on U.S. food products like wine, chocolate, cereal, furniture, mattresses, fruit and juice.

Canada estimates a U.S. law that mandates country of origin labelling on meat has reduced sales by about $1 billion per year. (Charlie Neibergal/Associated Press)

"In light of the final ruling, and due to the fact that the United States has continued to discriminate against Canadian livestock products, Canada will be seeking authority from the WTO to use retaliatory measures on U.S. agricultural and non-agricultural products," a statement from the two ministries said.

Some U.S. lawmakers are taking that possibility seriously, and are already taking steps to introduce a bill that

would repeal the law currently on the books ahead of any retaliatory sanctions.

The measure was blamed for a drastic decline in meat exports from Canada and Mexico.

Ottawa reckons the labeling requirements have cost Canadian meat producers about $1 billion annually since being implemented in 2008. The impact on Mexico has been about the same.

It's the fourth similar ruling from the WTO against the U.S. in the issue, and long past time to move on, the chair of the Canadian Pork Council says.

"The U.S. has now lost four times at the WTO and has no other appeal options," Rick Bergmann said. "It is time that the negative impact … is recognized by Congress and that they fix the legislation."