U.S. confirms new beef trade pact with South Korea

WASHINGTON (Reuters) - The Bush administration confirmed on Saturday that U.S. beef exporters are set to resume shipments, under certain restrictions, to South Korea, a step officials hope will provide resolution to a trade impasse that has become a major headache for both nations.

"Korean beef importers and U.S. exporters have reached a commercial understanding that only U.S. beef from cattle under 30 months of age will be shipped to Korea, as a transitional measure, to improve Korean consumer confidence in U.S. beef," U.S. Trade Representative Susan Schwab said in a statement.

On Friday, the U.S. beef industry announced it would be willing to limit beef shipments to those from younger cattle, generally believed to be at lower risk for mad cow disease.

The announcement came after almost a week of closed-door negotiations in Washington surrounding a deal the governments struck two months ago to resume U.S. beef exports to South Korea, which essentially have been halted since the discovery of mad cow disease in the United States in 2003.

The April agreement was supposed to include all cuts of U.S. beef, from cattle of any age, but after a massive public backlash in Korea caught the young presidency of Lee Myung-bank by surprise, exporters sought to provide South Korean consumers assurances with the age restriction.

"At the request of U.S. exporters, once the protocol goes into effect, the U.S. government will facilitate this transitional private sector arrangement," Schwab said.

The U.S. Agriculture Department will set up a monitoring system, Schwab's office said, as part of the arrangement.

Limiting U.S. exports to beef from animals under 30 months of age would probably not be a major hindrance for the U.S. beef industry, at least initially, since all the processing plants already approved for export to South Korea only ship that category of beef.

The arrangement, which officials said would take effect shortly, will also allow Seoul to block exports of any specific product or from any plant if it finds "serious" violation of trade rules.

The question of beef exports is tied into a major bilateral trade deal with South Korea, which the Bush administration signed last year.

Many members of Congress vowed to block approval of the agreement until a full range of U.S. beef products were accepted by Seoul.

The new arrangement "effectively changes the April 18 accord struck between Korea and the United States," the office of Sen. Max Baucus, who heads the powerful finance committee, said in a statement.

"The implications of this agreement set an unfortunate precedent for U.S. beef trade with Korea and other countries," the Montana Democrat said.

(Reporting by Missy Ryan, Editing by Jackie Frank)