* Government panel of medical, food experts approve step
* Move to allow imports from cattle older than 20 months
* US beef exports to Japan dropped by 60 pct past decade
* CME live cattle futures traders welcome Japan's steps
By Risa Maeda and Theopolis Waters
TOKYO/CHICAGO, Jan 28 Japan on Monday agreed to allow U.S., Canadian and French beef imports from cattle up to 30 months old beginning on Feb. 1, relaxing a safeguard against mad cow disease that has frustrated North American producers for a decade.
"This is great news for American ranchers and beef companies," U.S. Trade Representative Ron Kirk said in a statement which estimated the move could boost U.S. beef exports to Japan by "hundreds of millions of dollars" in coming years.
Canada and France also welcomed Tokyo's move, which reflects ebbing public concern in the world's third-largest economy about mad cow disease, or bovine bovine spongiform encephalopathy (BSE), almost 20 years after it shook the British beef industry and then was found in North America in 2003.
Japan's decision, which has been under consideration since 2011, addresses a long-time irritant in U.S.-Japan relations ahead of new Prime Minister Shinzo Abe's expected visit to Washington in February. It also clears a major obstacle to Japan's potential participation in a U.S.-led regional free trade pact called the Trans-Pacific Partnership.
The news helped boost live cattle futures in trading on Monday at the Chicago Mercantile Exchange. At 10:25 a.m. CST (1625 GMT) CME spot February live cattle was 2.025 cents per lb higher, or up 1.6 percent, at 128.325 cents.
But many traders and industry analysts had expected the move for some time, limiting its immediate price impact, said Joe Ocrant, president of Oak Investment Group.
JAPAN CURBS ON U.S. BEEF DATE BACK TO 2003
Japan initially banned all U.S. beef imports when the first case of mad cow disease was found in the United States in 2003, shutting down the U.S. industry's largest export market and handing Australian producers a prized new opportunity.
It partially reopened its market in July 2006 to allow imports of some U.S. beef from animals aged 20 months or younger produced under a special program for Japan. The age of the cow is considered a risk factor for mad cow disease.
But U.S. beef exports to Japan totaled only about 120,000 tonnes in 2011, 60 percent below the 2001 level
"This move is an important step forward in paving the way toward greater export opportunities to one of our largest export markets," J.D. Alexander, president of the National Cattlemen's Beef Association, said in a statement.
Still, over the past decade, the U.S. beef industry has found new markets for many of the products that Japan traditionally bought from the United States.
Given that situation, "it's too early to say how quickly business (to Japan) will increase," said Gary Mickelson, a spokesman for Tyson Food Inc.
Recession in Japan and a drop in the value in the yen due to that country's new fiscal policy also could limit any growth in U.S. exports, said Jim Robb, director of Colorado-based Livestock Marketing Information Center.
"Furthermore, wholesale beef prices will be record high in 2013 because the U.S. cattle supply is still shrinking, and those higher prices tend to reduce sales. Still, it could be a net positive in terms of U.S. beef exports to Japan in the months ahead," Robb said.
BANS ON FRENCH BEEF, DUTCH VEAL ALSO DROPPED
Canada said it expected the move to double the potential market value of its beef exports to Japan to about C$150 million ($149 million) annually.
Canadian Agriculture Minister Gerry Ritz said Ottawa could continue to press for Japan to open its market to the full menu of Canadian beef products, but in a staged manner.
"It helps us to build and manage the growth of our industry over the next few years too as we spool up to be ready for these exciting new opportunities," he told reporters on a call.
Japan also said it would allow beef imports from French cattle up to 30 months old, dropping a complete ban. Beef from Dutch cattle less than 12 months old was also cleared for imports beginning Feb 1, the officials said.
"Japan's decision, which was long awaited, is a recognition of the guarantees given by the French and European sanitary systems," France's agriculture, food and trade ministers said in a joint statement. "It is now up to our producers to seize the opportunity and organise themselves accordingly."
France exported 94 tonnes of beef for a total of 1 million euros ($1.35 million) to Japan in 2000, the year before Japan imposed its embargo.
The Consumers Union of Japan said on Monday that it opposed the government's move due to concerns over lax checks on animal feed and product shipments in the United States, adding that Japan's government had underestimated the risks involved.
A government panel of medical and food experts agreed to relax the restriction after Health Minister Norihisa Tamura left the decision to the panel. Tamura has said it would become effective on Feb. 1 upon the panel's approval.
A health ministry official said Japan and the United States had agreed to keep talking about further loosening regulations longer term.
Mad cow is caused by a protein particle that typically does not show up in the brain tissue of cattle younger than 30 months. Most cattle are slaughtered between the ages of 18 and 24 months.
The United States had said Japan's refusal to accept beef from cattle older than 20 months was more cautious than necessary, given the United States' designation as a "controlled risk" country for mad cow by the World Organization for Animal Health