Unresolved beef issue threatens free-trade deal with S. Korea

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By The Associated Press

SEOUL, South Korea — The free trade deal between the United States and South Korea is being jeopardized by its failure to reopen the Korean market to U.S. beef exports.

In Washington, two key senators warned though that the agreement will not win congressional approval unless South Korea drops a ban on the import of U.S. beef that it imposed in December 2003 after the first reported US. case of mad cow disease. Negotiators were unable to resolve the issue as part of the free trade talks.

“I will oppose the Korea Free Trade Agreement, and in fact I will not allow it to move through the Senate, unless and until Korea completely lifts its ban on U.S. beef,” said Sen. Max Baucus, D-Mont. and the chairman of the Senate Finance Committee, which handles trade issues.

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South Korean environmental activists, including one wearing a costume symbolizing imported U.S. beef infected with mad cow disease, perform during a rally against imports of American beef near the U.S. embassy in Seoul, Sunday, April 1, 2007. The United States and South Korea reached a free trade agreement, but it is jeopardized by the agreements failure to reopen Korea's market to U.S. beef. (AP Photo/Ahn Young-joon)

South Korean environmental activists, including one wearing a costume symbolizing imported U.S. beef infected with mad cow disease, perform during a rally against imports of American beef near the U.S. embassy in Seoul, Sunday, April 1, 2007. The United States and South Korea reached a free trade agreement, but it is jeopardized by the agreements failure to reopen Korea's market to U.S. beef. (AP Photo/Ahn Young-joon)

“This agreement is dead on arrival until the beef issue gets resolved,” said Sen. Chuck Grassley of Iowa, the top Republican on the Finance Committee. He said while U.S. pork and soybean producers stand to benefit he was disappointed that South Korea refused to open its rice market.

While many business groups from high-tech to music voiced support for the deal, auto executives at Ford Motor Co. and Daimler Chrysler AG’s U.S. unit Chrysler Group said they would urge rejection because negotiators failed to do enough to lift Korea’s high barriers to U.S.-made cars.

“This agreement as we understand it will not open the Korean market to free trade in automobiles,” said Steve Biegun, a Ford vice president.

It is the biggest trade deal ever for South Korea, which in nearly 50 years has grown from one of the world’s poorest countries to become its 10th-largest economy.

It is also the biggest U.S. trade deal since the North American Free Trade Agreement with Canada and Mexico.

South Korea, under pressure from farmers who were worried that eliminating protections for rice would destroy the domestic industry, succeeded in keeping the staple food out of the deal. But Seoul agreed to lower tariffs on other agricultural goods, including U.S. oranges.

“We kept our promise that rice will be excluded from the market opening,” South Korean Trade Minister Kim Hyun-chong told reporters.

South Korean labor and farm groups have denounced the free trade deal, demonstrating in Seoul and other cities, saying an influx of U.S. imports will cost jobs and harm livelihoods.