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S. Korea, US Wrestle Over Unresolved Beef Issues



WASHINGTON (Dow Jones)--Contentious issues must still be be worked out before the U.S. will be able to begin exporting beef to South Korea, despite substantial progress made recently by both countries toward trade resumption, according to U.S. government and industry officials.



South Korea still has not publicly released the results of a two-week audit of 37 U.S. beef processing plants, but U.S. Department of Agriculture and U.S. industry officials say there are some "sticky issues" in it.



The primary "sticky issue," one USDA official said, is that South Korea does not want to agree with a "systems approach" to allow in U.S. beef, but rather wants to pick and choose individual U.S. plants that it will accept beef from.



"I don't see this as a done deal," the official said, expressing some concern over widespread expectations that South Korea will make some form of official announcement about U.S. beef exports on June 7.



The U.S. government and industry officials spoke on condition of anonymity because of the delicate nature of ongoing trade talks.



South Korea, U.S. officials said, want to be able to ban specific beef processors that have been shut out of trade with other countries for problems such a the discovery of bone fragments in shipments.



"It's not a science-based approach," a USDA official said.



USDA spokesman Ed Loyd did not comment on specifics of the trade talks, but did stress that these kinds of deals are always very complicated with uncertain outcomes.



Lynn Heinze, a spokesman for the U.S. Meat Export Federation, said that "beef exporters would like a clear understanding of how South Korea plans to deal with the bone-chip issue before trade resumes." He also stressed that U.S. companies are concerned about the difficulties of getting plants back on the list of eligible exporters after an importer such as Hong Kong "de-lists" them because of a problem.



Hong Kong has stopped accepting imports from three U.S. beef plants since it eased its ban in December 2005. All three of those actions were due to the discovery of bone fragments.



Swift & Company (SWT.Xx), Cargill Inc. (CRG.Xx) and Harris Ranch Beef Co. have all had plants taken off the list of producers that can ship beef to Honk Kong.



South Korea, like Hong Kong did months ago, has agreed to lift its ban only on boneless cuts of U.S. beef.



Most major foreign markets banned U.S. beef in December 2003 after the first case of mad-cow disease, or bovine spongiform encephalopathy, was discovered here. Some - like Hong Kong, Singapore and South Korea - only want to buy boneless beef as a condition for lifting those bans.



But USDA and U.S. industry officials say they are taking the term "boneless" too literally. USMEF's Heinze said "zero tolerance" is not possible.



The U.S., Mexico and Canada agreed years ago under the North American Free Trade Agreement on tolerances for minimal amounts of bone fragments in meat shipments and now some are calling for similar agreements with South Korea, Hong Kong and other trade partners.



USDA officials said they have already begun specific talks on bone fragment standards with Hong Kong and others.



Source: Bill Tomson, Dow Jones Newswires; 202-646-0088; [email protected]
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