The World Trade Organization ruled against the U.S. on Monday in a yearslong battle over the information on meat packages, saying country-of-origin labels required by the U.S. discriminate against livestock from Canada and Mexico.

The ruling paves the way for Canada and Mexico to seek retaliatory action against the U.S., which has required country-of-origin labels on its beef, pork and other meat items since 2009.

The...