South Korea's Lee could bring U.S. good news on beef

By Doug Palmer and Arshad Mohammed

WASHINGTON (Reuters) - South Korean President Lee Myung-bak could bring President George W. Bush good news this week about a long-running beef spat that has held up a free trade pact between the two countries, a U.S. business leader and senior Bush administration official said on Tuesday.

"I fully expect they're going to come with an announcement that shows positive direction on the beef issue," said Myron Brilliant, president of the U.S.-Korea Business Council and the U.S. Chamber of Commerce's vice president for Asia.

A senior Bush administration official, who asked not to be named because of the sensitivity of the negotiations, said he hoped, and had reason to believe, that Lee could deliver a long-awaited solution to the beef spat.

"I do. I mean, we are in very serious negotiations this week. ... We have our fingers crossed," the official said.

An agreement would remove a major obstacle to congressional approval of the trade deal, the biggest since the North American Free Trade Agreement went into force in 1994.

An official in Seoul said the two sides were still at odds but that negotiations were continuing.

"They had a meeting until late Tuesday night and are scheduled to meet again today, but it's very unclear whether an agreement can be reached, as their differences are so wide," a spokesman at South Korea's farm ministry told Reuters.

South Korea, once the third-largest importer of U.S. beef, currently refuses to admit anything but U.S. boneless beef from cattle younger than 30 months following the first case of U.S. mad cow disease more than four years ago.