Restrictions On U.S. Beef May Be Deal-Breaker For South Korea Free Trade

While negotiators for both countries were somewhat optimistic that a deal could be reached, restrictions on U.S. beef imports remain a key problem.

Seoul, South Korea (AP)- The chief U.S. negotiator in free trade talks with South Korea expressed optimism Thursday that a deal can soon be reached, but warned that the U.S. Congress will never ratify it unless existing restrictions on American beef imports are completely removed.

''We enter what will be a decisive week in the negotiations with optimism, determination and focus,'' Assistant U.S. Trade Representative Wendy Cutler told reporters. ''And with this mindset I continue to remain optimistic that this deal can be done by the end of the month.''

Cutler spoke as negotiators began five days of talks _ their eighth round since June _ aimed at concluding the ambitious agreement amid a tight deadline just a little over three weeks away.

The stakes are high. A deal, if successful, would be the biggest for the United States since the North American Free Trade Agreement in 1993. South Korea is the seventh largest trading partner for the U.S. Bilateral trade totaled $72 billion in 2005.

The two sides need to reach an accord by the end of March to be able to take advantage of U.S. President George W. Bush's expiring special Trade Promotion Authority, which makes getting trade deals through Congress easier.

The ''fast track'' power _ which allows him to submit agreements to lawmakers for a straight yes-or-no vote without amendments _ runs out on July 1. Various legal requirements, however, mean an agreement has to be submitted 90 days before that.

Cutler's counterpart, veteran South Korean trade diplomat Ambassador Kim Jong-hoon, said he was ''cautiously optimistic,'' but suggested the road ahead will not be easy.

''Painful negotiations will be needed up to the last minute to conclude a deal,'' he told reporters.

The two sides aimed wrap up by the end of last year, but the inability to significantly narrow differences in key sectors including automobiles, pharmaceuticals and U.S. antidumping laws has slowed progress.
''We will make every effort to resolve all outstanding issues,'' Cutler said, emphasizing that the current round would be the last.

Kim cited progress in the area of trade remedies, which include anti-dumping measures, and said the two sides had reached agreement in the competition sector and in customs affairs.

Cutler, however, cautioned that a long-running dispute over imports of U.S. beef into South Korea remained a potential deal-breaker.

The beef issue is not formally part of the free trade talks, but has cast a long shadow over them.

''Our Congress continues to make it abundantly clear to us that there will be no FTA without a full reopening of the (South) Korea beef market,'' Cutler said.

South Korea suspended U.S. beef imports for almost three years after mad cow disease was found in the United States in 2003.

It allowed a partial resumption late last year, letting in boneless meat from cows under 30 months of age. But the first three shipments were rejected for containing banned bone fragments and no American beef has reached South Korean store shelves.

Washington has complained bitterly, saying the beef is safe and that the bone chips posed no danger.

Authorities in South Korea, formerly the third-largest export market for U.S. beef, say the bone fragments, which they believe could harbor mad cow disease, constitute a threat to consumer safety.

U.S. lawmakers, including Max Baucus, a pro-trade senator from Montana, have blasted South Korea over the beef issue and say it threatens the free trade deal.

In an apparent concession, South Korea's Ministry of Agriculture and Forestry said Thursday in a statement that it will adjust quarantine standards this month for bone fragments.

South Korea notified U.S. agriculture officials of the plan during talks on the issue in Washington on Tuesday, and the U.S. did not oppose it, the ministry said.

Under the lowered standards, bone fragments will still be unacceptable, but Seoul will return only containers of meat containing bones, instead of rejecting the entire shipment, the statement said.

USTR's Cutler appeared cool to the idea, calling it, among other things, ''commercially unfeasible.''
Kim, for his part, appeared to shrug off Cutler's remarks on beef, repeating his past statements that he is not in charge of the beef issue and that it is not part of the free trade negotiations.