The World Trade Organization appeals body has ruled that a United States law that requires Canadian livestock to country-of-origin labelling is discriminatory.
Agriculture Minister Gerry Ritz made the announcement on Friday on the Bryan Willms cattle farm near Dundurn, calling the decision a "key victory."
"We're talking about a simple fix, which eliminates the discrimination and the effects that it has on Canadian cattle and hogs," said Ritz. "I'm confident we can resolve this dispute between friends."
Since 2008 Canadian hogs and cattle have been segregated in the U.S., to make sure they couldn't get mixed up with the American animals.
Major U.S. meatpackers have even stopped buying Canadian livestock, costing producers in Canada hundred of millions of dollars.
The WTO said Americans have the right to know where their food comes from, however, their laws should not cause undue hardship on Canadian exporters.
"When we can be sending beef across the border without all these restrictions that have been put in place then it makes things flow just a lot simpler," said Willms, a cattle farmer near Dundurn.
But Brad Wildeman with the Canadian Cattlemen's Association said after years of disputes over the issue there are fewer farmers left in the Canadian livestock industry.
"This has really hampered that," said Wildman. "It's cost us a lot of money and, quite frankly, it's probably one of the major contributing factors in the reason why we have less cows in this country."
Ritz said the U.S. could take up to 15 months to make a changes to the law, but added that he hoped change would come sooner.