June 5, 2007 / 2:20 AM / in 11 years

Errors, unapproved firm blamed for Korea beef ban: USDA

WASHINGTON (Reuters) - U.S. inspectors wrongly allowed an unauthorized company to ship beef to South Korea that now has triggered a wider ban on two major U.S. processors, the Agriculture Department said on Monday.

The ban punctuated long-running efforts by USDA to restore sales to South Korea, the long-time No. 3 customer for U.S. beef.

USDA spokesman Keith Williams said that while Seoul hasn’t officially issued a ban on all U.S. beef shipments, the incident negatively impacted exports in the short term.

“The mere fact is if you tried to get beef in there right now, it probably wouldn’t get in,” said Williams.

At present, Seoul allows imports of boneless U.S. beef from cattle less than 30 months of age. It says it will return 66.4 metric tons of beef that violated the rules and wants an explanation from USDA.

Williams said a company that deals mostly with Mexico, Am-Mex, assembled and shipped the beef products that were rejected by South Korea. “There were not any other companies involved,” he said.

He also said USDA inspectors “did not follow procedures that were established for verifying requirements and for the product certification of the export certificate. This comes down to human error.”

At the same time, U.S. Trade Representative Susan Schwab warned that Congress would not approve a proposed free trade agreement with South Korea until Seoul completely opened its market to all U.S. beef.

“That includes boneless, bone-in, offals and variety meats,” Schwab said, referring to a recent international ruling that U.S. beef is safe and pledges by South Korean leaders to abide by that decision.

Earlier in the day, South Korea said it banned beef from two plants owned by Cargill Inc. and two owned by Tyson Foods Inc. The companies said they produced beef for domestic consumption and it apparently was exported by customers.

“America’s cattlemen are disappointed by this setback in our ongoing efforts to normalize beef trade with South Korea,” said the National Cattlemen’s Beef Association.

A trade group for U.S. meatpackers, the American Meat Institute, said South Korea should reinstate the Cargill and Tyson plants. It said “the products were shipped by brokers and were eligible for export to most nations, but not Korea.”

Agriculture Secretary Mike Johanns told reporters he was confident that obstacles to beef trade with South Korea will be removed in the end.

“Much like Japan, there are going to be some start-up speed bumps,” he said. Japan allows beef from U.S. cattle less than 20 months old.

Japan and South Korea banned U.S. beef following discovery of the first U.S. case of mad cow disease in December 2003. U.S. officials have worked for years to reopen both markets.

“We are going to encourage (Japan) on moving to the OIE standard,” said Johanns, referring to the World Organization for Animal Health. It assigned a favorable rating in May to U.S. safeguards against mad cow disease, which U.S. officials use as leverage for unencumbered beef trade.

Sen. Max Baucus, a Montana Democrat, said the latest import flap, no matter how it arose, only confirmed his doubts about Korea’s import policies.

Baucus, who chairs the influential Senate Finance Committee, has threatened to torpedo a lucrative bilateral trade deal with South Korea, which still needs congressional approval, if beef trade doesn’t pick up.

“All American beef is safe — whether it has bones or does not. The time is long past for Korea to follow international standards,” Baucus said in a statement. “My patience is running out.”

Additional reporting by Christopher Doering and Missy Ryan

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