A 'Landmark Deal' or Half a Deal? Where's the Beef?

WASHINGTON, Dec. 4, 2010— -- "A win for American workers" is how President Obama today described the new free trade agreement his administration has worked out with South Korea.

But of the two big stumbling blocks -- automobiles and beef exports -- only autos was completely addressed. And already, a Democratic senator is signaling he may oppose the agreement if his concerns about U.S. beef exports aren't addressed.

The wide ranging free trade agreement (FTA) will boost U.S. exports by $11 billion and support 70,000 American jobs, the president said.

The big breakthrough was on cars. Both Ford and Chrysler had opposed an earlier version of the deal, which was one of the reasons the president couldn't reach an agreement while he was in South Korea last month for the G-20 summit.

But serious problems remain with U.S. beef exports. Officials point out that the FTA calls for all tariffs on U.S. beef to be eliminated.

The problem is, the South Koreans still won't let any U.S. beef products into their country from an animal older than 30 months. Why? It can all be traced back to the "mad cow" outbreak of 2003. South Korea shut down imports then and when they resumed in 2008 political protestors took to the streets.

The United States insists beef products from any age animal are safe and that the science proves as much. But the U.S. beef industry, looking to get back into the Korean market, agreed in a side letter in 2008 to only export beef from animals younger than 30 months.

The widely held view is that cattle younger than 30 months are less susceptible to mad cow disease.

So, while the White House is highlighting the FTA, there is still much more work to do on beef imports.

So much work, that the office of Montana Sen. Max Baucus is signaling that unless his concerns are answered he may opposed passage of the agreement. One of those concerns is the ban on beef over the age of 30 months.

The White House admits it has a problem.

"We are committed to working with Senator Baucus and the Koreans under the protocol that we have ... that would allow all beef to get in," a senior administration official said Friday.

When might that happen?

"It's a pending issue, and we're committed to continuing to work on that issue with the Koreans," is all the official would say.

Already U.S. beef producers have regained market share in Korea.

Industry officials say cattlemen will sell $450-500 million worth of beef products in South Korea this year. That's about equal to the total sales to Korea in 2003, before the mad cow scare.