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Beef Sparks Possible U.S. Trade Row

Posted November. 30, 2006 06:49,   


The head of the U.S. Agriculture Department (USDA) strongly criticized the Korean government’s rejection of the U.S. beef imported late last month, saying Washington cannot trade with Seoul in this situation.

On October 30, Korean inspectors discovered a bone fragment the size of a fingernail in a nine-ton shipment of U.S. beef at Incheon International Airport. The beef failed to make it through the customs.

Some have raised concerns that a bilateral trade conflict could arise, threatening the fifth round of the Korea-U.S. FTA negotiations.

“We are very disappointed. It was just a small piece of cartilage in nine tons of beef. I’m not sure whether the inspection should be that stringent,” said Chuck Lambert, USDA deputy undersecretary. After his remarks expressing disappointment to the Korean government, USDA Secretary Mike Johanns also expressed his agreement to Lambert.

“The Korean government invented a standard that the US hasn’t agreed to. A small bone was found and they knew that it posed no harm for anyone. The government refused to let in the entire shipment even though the beef’s safety was acknowledged. Besides, the inspection took as long as three weeks. We cannot continue to trade with Korea in this situation,” Johanns said to reporters.

Korea used to be the second largest market ($1.2 billion per annum) for U.S. beef after Japan ($1.4 billion per annum) before Bovine Spongiform Encephalopathy cases were found in the U.S.

Some say that the strong criticism from the U.S. reflects complaints from U.S. beef exporters and lawmakers representing them. However, underneath is a strong dissatisfaction over the rigorous inspections of U.S. beef despite the international practice of sample testing.

“From the U.S. point of view, Korea promised to import beef and then changed the rules,” said USTR Deputy Assistant Amy Jackson at a discussion meeting on November 28.

Some U.S. media reports that some Asian countries including South Korea allows only de-boned beef imports, and that is more stringent than the international safety standard.

In a nutshell, the US government and the beef exporters are saying that Korea’s inspection standard is outrageously rigorous.

This January, Seoul agreed to import “less than 30 month-old de-boned beef.” Washington is saying that it was far-fetched to conduct X-ray inspections on every single pieces of the tons of meat and then refused to accept all of them because of a nail-size bone.

The Korean government acknowledges that only the skull and spinal cord of cow cause mad cow disease. But all beef bones were excluded from the import, as several scholars said spinal cord could be included in some bones.

This condition could reduce the sheer amount of imports. Before 2003 when a ban was imposed on U.S. beef, 66 percent of beef shipped from the U.S. were beef ribs. Allowing only de-boned beef naturally means less imports.

“When we separate the flesh from 40kg ribs, 8 to 10kg of beef remains,” says one official from the Ministry of Agriculture and Fisheries (MOAF).

After a bone was discovered in the imported beef, the MOAF has contemplated what to do about it. Later, the customs service decided to reject the beef according to its principle for fear of a strong domestic outcry.

Free trade impact-

It is too early to tell how the U.S. government’s criticism will change its trade policy. Chances are high, however, that it will adversely affect bilateral trade.

“A huge trade dispute is likely to occur if Washington starts to conduct a detailed inspection on all Korean goods entering the U.S.,” said one trade expert.

The issue of beef inspections will be also discussed in the fifth round of KOR-U.S. FTA negotiations, which will be held in Montana early next month.

In the discussion on sanitary and inspection matters, Washington is likely to demand less stringent inspections, while putting pressure to scrap the 40 percent tariff on U.S. beef.

If things get worse, Korean companies can experience disadvantages in exporting goods to the U.S. market. Currently, some exporters are worried about it, but not saying it publicly.